Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
Speaker 1: This week on the podcast, I have an extra special guest.
Speaker 1: Penny Pennington is the head of investment Giant ed Jones.
Speaker 1: Technically her title is managing partner. She is the sixth
Speaker 1: such partner in the eight year old firm, and the
Speaker 1: first one not to be part of the founding family.
Speaker 1: She was originally a financial advisor who just came up
Speaker 1: through the ranks. If you are at all interested in
Speaker 1: things like asset management, financial planning, what it's like to
Speaker 1: run a giant firm with fifty employees and seventeen thousand
Speaker 1: financial advisors, who better than Penny Pennington. This is really
Speaker 1: just an absolutely fascinating conversation. There's a little bit of
Speaker 1: it that's kind of inside baseball, and and I'll let
Speaker 1: you guys in a secret. I treat these conversations as
Speaker 1: if it's a one on one and I just asked
Speaker 1: the questions that I'm genuinely interested in. I learned a
Speaker 1: lot and I think you will too. So, with no
Speaker 1: further ado, my conversation with Edward Jones, Penny Pennington's This
Speaker 1: is Master's in Business with Barry Ridholts on Bloomberg Radio.
Speaker 1: My extra special guest this week is Penny Pennington. She
Speaker 1: is the managing partner of Edward Jones, a year old
Speaker 1: Fortune five hundred company. They have seven million clients and
Speaker 1: about one point three trillion in assets managed by forty
Speaker 1: nine thousand associates. She is the first non family member
Speaker 1: to manage the firm, and she was ranked number thirty
Speaker 1: three in Fortune's Most Powerful Women in Business list. Penny Pennington,
Speaker 1: Welcome to Master's in Business. Thank you, Barry. It's great
Speaker 1: to be with you. Great to be with your listeners today,
Speaker 1: Really nice having you. You have both an interesting back
Speaker 1: round and an interesting career path. But I'm gonna jump
Speaker 1: a little bit towards the ends. Tell us what was
Speaker 1: going on, oh eight oh nine, What was happening in
Speaker 1: the firm? How did you respond, How did clients react
Speaker 1: to suddenly you know, lots of people were pooh poohing
Speaker 1: the oh, it's no big deal, it's contained until it
Speaker 1: wasn't tell us what the great financial crisis was like,
Speaker 1: what were clients calling and worrying about? And then how
Speaker 1: does this version compare? It seemed people sort of learn
Speaker 1: their lesson not to panic in O eight oh nine. Uh,
Speaker 1: that's that seems to be what at least the lesson
Speaker 1: was in. But what was your experience. Yeah, well, as
Speaker 1: it relates to clients and what they were experiencing. If
Speaker 1: you go back to eight oh nine, UM, the catalyst
Speaker 1: for the ignission switch, for that market volatility, what happened
Speaker 1: in the global markets was a financial ignition switch. It
Speaker 1: was a meltdown in certain aspects of the financial markets,
Speaker 1: and as a result, the stock market, as we certainly
Speaker 1: remember UM did a deep dive and remained deep and
Speaker 1: volatile for some period of time. While the financial markets
Speaker 1: UM were to some degree rebuilt. Regulation was a part
Speaker 1: of that. UM new entrance and new new partnerships among
Speaker 1: financial services companies were part of that. But the investing
Speaker 1: public UM got a got got UM a reminder of
Speaker 1: what significant volatility and a deep um reduction in the
Speaker 1: stock market felt like. And uh it took ten years
Speaker 1: to rebuild from that. The difference with the the effects
Speaker 1: of what I've called a triple pandemic over the past
Speaker 1: eight months or so is that the ignition switch had
Speaker 1: nothing to do with the economy or the financial markets.
Speaker 1: It was a health crisis that was the ignition switch
Speaker 1: for a period of market volatility that was actually pretty
Speaker 1: short in February and March. We have had some more
Speaker 1: recent market volatility and we expect that that will continue.
Speaker 1: But the markets because for for a lot of reasons
Speaker 1: that we could talk about, the markets actually recovered pretty significantly. However,
Speaker 1: the anxiety in the marketplace is still there, and anxiety
Speaker 1: for investors sometimes means that they question, uh, the way
Speaker 1: their portfolios are built, um, they become more risk averse,
Speaker 1: and very importantly, they turned to a financial advisor to
Speaker 1: help them make sense of all of that. So that
Speaker 1: was a common feature of oh eight oh nine for
Speaker 1: for investors and how they responded. The common feature for
Speaker 1: us and our financial advisors and how we respond is
Speaker 1: to keep people focused on their long term goals and
Speaker 1: help relieve as much as we can um the anxiety
Speaker 1: that people are facing with market volatility, but this time
Speaker 1: with things like health crisis, loss of jobs, their kids
Speaker 1: and grandkids who are going through through significant changes in
Speaker 1: their lives. So sometimes I asked questions that I just
Speaker 1: want to know the answer to, Hey, how do you
Speaker 1: create a consistent experience from advisor? Advisor even if they're
Speaker 1: in different offices. The portfolios might look similar, but how
Speaker 1: do you maintain that corporate culture. It's a really challenging
Speaker 1: question because it's you know, it's not an easy thing
Speaker 1: to do, especially during working from home. Our financial advisors
Speaker 1: and our branch office administrators are client service professionals. They
Speaker 1: have been in the branch the whole town on. Our
Speaker 1: branches are very safe and we closed them to the public.
Speaker 1: So we've been meeting with clients, investors, and prospects by
Speaker 1: zoom and virtual means. But the financial advisors are in
Speaker 1: our branches and that really has helped. It's been a
Speaker 1: centering mechanism for them in a way. That's that's kept
Speaker 1: us all together. So that raises a really interesting question
Speaker 1: which I was going to ask later, but let me
Speaker 1: ask now. Edward Jones has something like thirteen thousand branches,
Speaker 1: Is that right? They were all branches fifteen thousand, so
Speaker 1: I'm looking at old data. So all fifteen thousand branches
Speaker 1: were open and actually operating lights on during during the
Speaker 1: entire m during work from home during pandemic lockdowns. It
Speaker 1: wasn't open to the public, but you had people going
Speaker 1: into those offices and turning on the lights. Absolutely. Most
Speaker 1: of our branches we have two to three people in
Speaker 1: the branch, so they are by their nature safe places.
Speaker 1: We could differ o our colleagues could be distanced from
Speaker 1: each other UM and we were deemed in essential services.
Speaker 1: So because of that, even during state by state lockdown,
Speaker 1: and boy, I remember the night that we got the
Speaker 1: news that Pennsylvania was locking down. That was the first state.
Speaker 1: You know, just just a wave of emotion and a
Speaker 1: bit of oh my gosh, this is really happening, and
Speaker 1: this is going to happen across the entire country. And
Speaker 1: so we got set up very quickly, within a matter
Speaker 1: of hours and days UM to ensure that our branches
Speaker 1: could remain open, but also to ensure that our financial
Speaker 1: advisors and our b O as branch office administrator, the
Speaker 1: client service professional in each of our branches could work
Speaker 1: remotely if they needed to or wanted to. So within
Speaker 1: a matter of about ten days days, we went from
Speaker 1: fifteen thousand remote connections available across our firm to fifty
Speaker 1: thousand remote connections. So while every single one of our
Speaker 1: branches has remained open, our colleagues can work flexibly and
Speaker 1: through through all kinds of virtual means like Zoom and
Speaker 1: Skype and webbex with with clients, investors, in prospects, and
Speaker 1: with each other. So what do you think the impact
Speaker 1: of keeping fifteen thousand branches open has been, and let's
Speaker 1: talk about all of your essential communities. What do you
Speaker 1: think it's been on the local community, the employees, the clients,
Speaker 1: and and any perspective clients of seeing the lights on? Yeah, um, well,
Speaker 1: I believe and I've got evidence that proves um that
Speaker 1: that our clients and our perspective clients have seen those
Speaker 1: lights on and recognize that we are purpose riven to
Speaker 1: be there for their well being. You know what what
Speaker 1: has been going on with clients and investors, the anxiety
Speaker 1: that that this pandemic, the economic downturn, and the social
Speaker 1: unrest have caused across our communities. That anxiety has impacted
Speaker 1: clients and investors. It's also impacted every single one of
Speaker 1: us who serves them. And so we've been going through
Speaker 1: the same things that they have. But what being in
Speaker 1: the branch is, what being on the job at work
Speaker 1: for their benefit, for their well being has meant to us,
Speaker 1: is that we're doing something bigger than ourselves, despite our
Speaker 1: own personal anxiety. All of us have had to deal
Speaker 1: with all kinds of disruptions in our own lives, but
Speaker 1: we get out of bed every morning thinking about our
Speaker 1: clients and helping them reduce the anxiety in their lives.
Speaker 1: I'll tell you a real quick story, um and and
Speaker 1: it's and it really is. An image it was sent
Speaker 1: to sent to me back the beginning of April from
Speaker 1: a branch in Florida where the branches were closed to
Speaker 1: the public, but our financial advisors and boas are in
Speaker 1: the branch. And the image that was sent to me
Speaker 1: was a client standing outside the branch with their hand
Speaker 1: pressed up against the window of the branch and one
Speaker 1: of our Edward Jones colleagues on the other side of
Speaker 1: that window, hand to hand with their client, just passing
Speaker 1: back and forth. Good energy, Thank you for being there.
Speaker 1: We know you're there for us. And words didn't have
Speaker 1: to have to go back and forth, papers didn't have
Speaker 1: to go back and forth. That that was not the
Speaker 1: ethos that was being expressed. It was this, Uh. It
Speaker 1: was a convergence of love, of taking care of each other,
Speaker 1: of being in it together, of knowing why we're here,
Speaker 1: and that is to relieve the anxiety of our clients
Speaker 1: and keep them focused on the long term. It sounds
Speaker 1: as if there are certain key values and certain key
Speaker 1: ideas you want to make sure every Edward Jones customer
Speaker 1: experiences or or am I putting words in your mouth? Should?
Speaker 1: Is it more variable from office to office, advisor to advisor? Yeah?
Speaker 1: I like the way that you said that, UM, the
Speaker 1: experience they have UM may be different in terms of
Speaker 1: the products, the services, the tools UM that they are
Speaker 1: exposed to or that they're utilizing. That what is common
Speaker 1: is the outcome UM, that they achieve financially, whatever it
Speaker 1: is that's most important to them, and that they have
Speaker 1: the have this sense of well being as as we
Speaker 1: are helping them achieve that. So you raised a number
Speaker 1: of interesting points that I want to unpack one by one.
Speaker 1: Let's start with why you believe this particular cycle was
Speaker 1: so tight. Why was the downturn in February and March
Speaker 1: six weeks as opposed to oh eight or nine where
Speaker 1: it was eighteen months, which by itself was relatively short. Yeah. Well,
Speaker 1: in large part it has to do with what the
Speaker 1: ignition switch was. UM. The the economy before the pandemic
Speaker 1: was fundamentally quite strong, a period of low interest rates,
Speaker 1: a period of very high employment, a period that fundamentally,
Speaker 1: UM was very healthy for the economy. Lots of people working,
Speaker 1: and in our country, lots of people spending money. And
Speaker 1: since two thirds of our economy as driven by consumer
Speaker 1: spending in demand, when people spend money, UM, stocks are
Speaker 1: doing well and UH, and the market is fairly sanguine.
Speaker 1: That was the environment that we had before the pandemic.
Speaker 1: The environment that we had an O eight oh nine UH,
Speaker 1: we discovered was a little more fragile in terms of
Speaker 1: the fundamentals of the economy as well as the fundamentals
Speaker 1: of the financial services industry. UM that caused a ripple
Speaker 1: when when it began to come apart, caused a ripple
Speaker 1: effect that we know now is global. So that really
Speaker 1: is the distinguishing difference. Now, UM, why UM, why we
Speaker 1: had relatively little volatility. Then at the beginning of the pandemic,
Speaker 1: we do have to look at the broad stock market
Speaker 1: indexes and realize that a few growth companies have performed
Speaker 1: exceedingly well, in large part because of the way that
Speaker 1: they have served the consuming public and businesses during the pandemic. UM.
Speaker 1: I think the five or six highest growth stocks are up,
Speaker 1: you know, over the past six months or so, and
Speaker 1: the rest of the S and P five hundred is
Speaker 1: up far less and in some and on some weeks
Speaker 1: is down. So it's a pretty narrow market that is
Speaker 1: driving those, uh, those those broad benchmarks. So a lot
Speaker 1: of moving parts with how the contraction came about, how
Speaker 1: the economy recovered, what sectors are doing well. But I
Speaker 1: want to focus on what you brought up earlier. You
Speaker 1: have over sevent financial advisors. How do you make sure
Speaker 1: everybody has the same client experience, whether it's portfolio management
Speaker 1: or customer service. How do you translate that army of
Speaker 1: advisors into one I don't want to call it uniform warm,
Speaker 1: but a consistent experience, a consistent interaction with Edward Jones,
Speaker 1: no matter where your office is, where your advisor is. Yeah, um,
Speaker 1: what what a what a great conversation that we can
Speaker 1: have about that. So um, we have nineteen and a
Speaker 1: half thousand financial advisors. We were the largest firm in
Speaker 1: terms of number of financial advisors in our industry. Those
Speaker 1: financial advisors are spread across the United States and in Canada.
Speaker 1: We have forty nine thousand colleagues all together Um, so
Speaker 1: we are all pulling in the same direction in terms
Speaker 1: of what drives us Barry, our purpose, what gets us
Speaker 1: up in the morning is making a meaningful difference in
Speaker 1: the lives of the clients that we serve, the seven
Speaker 1: million that we serve today and the tens of millions
Speaker 1: of more that that look like serious, long term individual
Speaker 1: investors that we would like to serve. Now, you said,
Speaker 1: how do we ensure that every client is having the
Speaker 1: same experience, Well, actually we don't, because we we really
Speaker 1: focus on the humanity of each of our clients and
Speaker 1: discovering what it is that's most important to them, tailoring
Speaker 1: the experience to what they need, um providing to them
Speaker 1: as completely as we can a an experience that improves
Speaker 1: their financial well being, thereby their entire well being, and
Speaker 1: the experiences that that that is rooted in that the
Speaker 1: emotions that that those experience are rooted in is a
Speaker 1: common factor in terms of what we're seeking to deliver.
Speaker 1: We know that our clients want to feel understood about
Speaker 1: what's most important to them, in full about how to
Speaker 1: achieve that financially uh and how they're progressing toward that
Speaker 1: in control. They want to feel like they've got some agency.
Speaker 1: Albeit no one's got control over the market, but some
Speaker 1: some control and agency in their own lives. And we
Speaker 1: know when they feel those things that there's a sense
Speaker 1: of security and confidence about their long term path. So
Speaker 1: the experiences that we seek to deliver, family by family,
Speaker 1: individual by individual are all focused on helping individual clients
Speaker 1: and investors feel those emotions and and how that's achieved
Speaker 1: is through a deep trusted personal relationship with a financial advisor.
Speaker 1: We don't have call centers, Um, we have financial advisors
Speaker 1: in in communities, working face to face, one on one
Speaker 1: with clients and their families. Huh. Quite interesting. So Penny,
Speaker 1: let's talk a little little bit about financial advisors. What
Speaker 1: what makes for a good financial advisor? And is that
Speaker 1: something that can be taught or is it you know
Speaker 1: you either are or aren't. What makes for a good
Speaker 1: financial advisor is someone who recognizes that what we do
Speaker 1: is a balance of e Q emotional quotient emotional intelligence
Speaker 1: and i Q so knowledge that can be learned, expertise
Speaker 1: around the financial markets, around building a portfolio, around balancing
Speaker 1: complex trade offs between among a client's goals. That's the
Speaker 1: EQ part of what we do, and there is Boy,
Speaker 1: there's lifelong learning associated with with the I'm sorry, with
Speaker 1: the i Q part, with the intelligence quota, there is
Speaker 1: lifelong learning a sciating with that, and UM bear your
Speaker 1: organization helps financial advisors and and folks in the financial
Speaker 1: marketplace with that lifelong learning and insight and perspective. The
Speaker 1: EQ part is now more than ever and will continue
Speaker 1: to be a hallmark of what really great financial advisors do.
Speaker 1: The EQ part is being empathetic, recognizing that listening to
Speaker 1: another human being about what their hopes are, about what
Speaker 1: their fears are, and how those are changing over time,
Speaker 1: how they're impacted, especially now by current events. Really generously
Speaker 1: listening UM to that on the part of another human being,
Speaker 1: and UM with with with that kind of empathy and
Speaker 1: with that sort of expertise, building up not only a plan,
Speaker 1: a financial plan, but building a plan based on relationship
Speaker 1: to keep people focused on their long term goals, notwithstanding
Speaker 1: the short term ups and downs that are part of
Speaker 1: that UM to keep people focused on the long term.
Speaker 1: So empathy, generous listening, UM the process of of of
Speaker 1: thinking a short term to long term, All of those
Speaker 1: things make for make for the strength of a financial
Speaker 1: advisor and back to my earlier point about the i
Speaker 1: Q part of this, A lifelong learner someone who is
Speaker 1: really interested in continuing to dial up their own skills
Speaker 1: from an expertise standpoint, but also from from from an
Speaker 1: empathy and EQ standpoint. So let's stick with the concept
Speaker 1: of advisors. You guys are coming up on your hun
Speaker 1: birthday not too far off in the future. You began
Speaker 1: as a brokerage firm, and in the early days most
Speaker 1: of your employees who were client facing were brokers. How
Speaker 1: has over the past century, how has that changed to
Speaker 1: what Edward Jones is today. Yeah, Well, it's a fascinating
Speaker 1: history and it's really one that's rooted in um recognizing
Speaker 1: what was scarce in the marketplace and boldly and sometimes
Speaker 1: of admittedly in a in a very unusual way, going
Speaker 1: after serving that underserved market. So back in the fifties
Speaker 1: and sixties when Ted Jones are founder's son, recognized that
Speaker 1: the brokerage companies were all congregated in the large cities,
Speaker 1: but there was there were significant numbers of both with
Speaker 1: wealth and uh with with businesses and jobs where they
Speaker 1: were creating wealth who really deserved access to financial information,
Speaker 1: to products and services, to the ability to open an
Speaker 1: account and do a transaction in the financial markets, uh,
Speaker 1: in a really seamless and person to person way. Ted
Speaker 1: Jones recognized that that was scarce. It was scarce in
Speaker 1: more rural communities, and so he went about building a
Speaker 1: distribution system that spoke to to those clients. Now fast
Speaker 1: forward to today. You know, as I say opening an
Speaker 1: account and doing a transaction with scarce, then it certainly
Speaker 1: is not. Today. That's not what's scarce, and that is
Speaker 1: not what what is is the definition of value today.
Speaker 1: In fact, the ability to do a transaction in the
Speaker 1: financial markets is nearly a free good today, um, with
Speaker 1: zero commissions on trading and that sort of thing. Today,
Speaker 1: what is scarce is that hyper personalized, human centered relationship
Speaker 1: for tens of millions of people whereby they can get
Speaker 1: good advice in achieving what's most important to them. And
Speaker 1: that is across the arc of generations as well as
Speaker 1: across the arc of complexity of needs. And so we
Speaker 1: don't have account minimums and we don't have account maximums. Um.
Speaker 1: We work with clients who are serious long term individual investors.
Speaker 1: That means UM, they value relationship, they want advice, and
Speaker 1: they're focused on the long term in their lives. Quite interesting.
Speaker 1: You followed Jim Wettle, who was the managing partner at
Speaker 1: ed Jones for thirteen years. He oversaw a giant rise
Speaker 1: in both clients and assets. Edward Jones is now one
Speaker 1: of the nation's biggest wealth management company. Those are some
Speaker 1: pretty big shoes to fill. Yes, they are, and I
Speaker 1: feel it every day. If if you were in my office,
Speaker 1: uh and on the floor where where a number of
Speaker 1: our offices are there, there's some paintings down the hall
Speaker 1: and there are five paintings of our former managing partners.
Speaker 1: Are five former managing partners, including two whose last names
Speaker 1: were Jones uh then Doug Hill, John Bachman, Jim Wettle
Speaker 1: and um. Right across the hallway from those those paintings
Speaker 1: is a picture of Ted Jones, who was our founder's son,
Speaker 1: our second managing partner, And it's a picture of Ted
Speaker 1: with his horse and a couple of dogs out on
Speaker 1: his farm and he's talking about what he loves and
Speaker 1: what he's grateful for. And those those uh, those paintings
Speaker 1: and that picture of Ted remind me every day that
Speaker 1: I'm in the office of what our roots are, what
Speaker 1: our values are, who we came from. Importantly, all of
Speaker 1: our former managing partners were financial advisors. They sat with clients,
Speaker 1: building trust with clients. Albeit all the way back to
Speaker 1: nineteen two, there's a lot that changed about that, but
Speaker 1: what's fundamentally the same is building trust with clients. And
Speaker 1: as you said, UM, my immediate predecessor, Jim wettele Um
Speaker 1: was the leader of tremendous growth and growth and impact
Speaker 1: and our firm that took us from a few thousand
Speaker 1: financial advisors to today, um, nineteen thousand financial advisors in
Speaker 1: every nook and cranny, every large city and suburb in
Speaker 1: North America, in Canada and the United States. So following
Speaker 1: in those footsteps is it is an incredible responsibility, a
Speaker 1: great opportunity because what I learned from studying those former
Speaker 1: managing partners, they all looked forward boldly to the needs
Speaker 1: of millions of investors who we weren't serving yet, uh
Speaker 1: and took some some some pretty distinctive steps in order
Speaker 1: to serve them differentially. And perhaps we'll we'll talk some
Speaker 1: about some of that as week as we go along today.
Speaker 1: That is definitely on my list to get to. Did
Speaker 1: you get to work directly with Wettell. Did you pick
Speaker 1: up anything from him? Oh? Yeah, but well picked up
Speaker 1: tons from him. So I was part of the management
Speaker 1: committee and executive committee while Jim was managing partner. Interesting story.
Speaker 1: I was a financial advisor in Michigan from two thousand
Speaker 1: to two thousand and six. Jim was the managing partner
Speaker 1: who came in in two thousand and six and that
Speaker 1: year invited me to become a general partner in our
Speaker 1: firm and moved to St. Louis UH into home office leadership.
Speaker 1: And so had a ring side seat UM too Jim's
Speaker 1: tenure as managing partner, how he made decisions, how he
Speaker 1: thought about opportunity. I also had a ringside seat to
Speaker 1: UH to our leadership team working through the Great Recession
Speaker 1: and the impacts of two thousand eight two thousand and
Speaker 1: nine on clients, on our industry, and on our firm.
Speaker 1: And boy taught me a lot about about decision making
Speaker 1: during crisis. And I've while we haven't had a playbook
Speaker 1: for what has occurred over the last eight months, I
Speaker 1: have drawn on those experiences UH to know how to
Speaker 1: move forward. So full disclosure, we're recording this a few
Speaker 1: days after the election, but before the outcome is announced,
Speaker 1: so we have an inkling as to what might happens,
Speaker 1: but we really don't know for sure what the outcome
Speaker 1: is going to be. But let me ask you a
Speaker 1: couple of questions sort of in that in that area
Speaker 1: in my office before the election, that's all any client asked,
Speaker 1: what's going to happen? What does this mean for my portfolio?
Speaker 1: What does it mean for my taxes? On and on
Speaker 1: down the road. What what sort of questions have you
Speaker 1: been getting from clients about the election? Is it an
Speaker 1: issue they care about or is it, you know, just
Speaker 1: another element that occasionally comes up. Oh sure, our experience
Speaker 1: has been the same as yours bury. You know, we've
Speaker 1: we've been around for ninety eight years, so through the
Speaker 1: the change of many many many administrations during that period
Speaker 1: of time. And fundamentally, what's what's the same about those
Speaker 1: conversations is clients wondering, um, what what a potential change
Speaker 1: in and policy might mean for them, just as you describe,
Speaker 1: what we know over the long term is that very
Speaker 1: broadly White House policies are gonna help shape the economic terrain.
Speaker 1: History shows that the broader path has been pretty similar.
Speaker 1: Why is that because the nature of the US economy
Speaker 1: because it is broad based, it is diversified. It relies
Speaker 1: on consumer spending and business investment, and while White House
Speaker 1: policy is going to affect those things, it doesn't dramatically
Speaker 1: swing those things one direction or another every four years.
Speaker 1: So again, we keep focused on the long term, recognizing
Speaker 1: that um that that policies may change with a new president,
Speaker 1: and policies may change if we if we continue with
Speaker 1: the president that we've had for the past four years.
Speaker 1: Who knows what's going to happen in the in the
Speaker 1: coming days and weeks. Um, what we do expect is
Speaker 1: that the economy will continue to rebound. We have begun
Speaker 1: a rebound. We're not post pandemic. I'm not saying that,
Speaker 1: but we have begun a rebound in the economy, and
Speaker 1: we believe that that's going to continue. We do believe
Speaker 1: that we're not going to see a rapid snap back
Speaker 1: in to where the economy was pre pandemic. We do
Speaker 1: believe that we're going to see more fiscal stimulus. We'll
Speaker 1: see the size or or or focus of that, depending
Speaker 1: on the administration. And then finally, we we know that
Speaker 1: that monetary policy will continue to be exceptionally accommodative. That
Speaker 1: means interest rates are going to be very low for
Speaker 1: quite some sometime. The Federal Reserve has has not only
Speaker 1: telegraphed that, they've been very explicit about that. M quite interesting.
Speaker 1: One of the changes we did see with this administration
Speaker 1: was the possibility of the fiduciary rule being more aggressively
Speaker 1: imposed on things like qualified accounts for one case, and
Speaker 1: anything like that. If there is a change in administration,
Speaker 1: what are your thoughts as to what might change? What
Speaker 1: are your thoughts on the fugitial rule generally, well broadly,
Speaker 1: what I would say, Barry is that retirement security and
Speaker 1: helping investors have an experience that is that is more
Speaker 1: helpful to them is a nonpartisan topic. It is one
Speaker 1: where we have seen a great deal of reaching across
Speaker 1: the aisles in the past couple of administrations. So we
Speaker 1: welcome an environment where we are partnering with our regulators
Speaker 1: and policy makers to help Americans have more retirement security
Speaker 1: and so access to retirements, say evings, vehicles, um. Regulation
Speaker 1: that that helps clients have more confidence that our industry
Speaker 1: is operating in their best interests. All of those things,
Speaker 1: in one way or another, have been been dialed up
Speaker 1: over the past two administrations. I think that will continue
Speaker 1: to be a hallmark of the investing public's experience. There
Speaker 1: are different ways to get to that, and there are
Speaker 1: different types of regulations, UM, some much more specific, some
Speaker 1: much more prudential or principle based in nature. UM. But
Speaker 1: I have no doubt that our policymakers, legislators, and regulators
Speaker 1: are going to continue to be focused there. Huh. Quite
Speaker 1: quite interesting. I know you've been pretty involved in trying
Speaker 1: to recruit a greater degree of diversity in in the workforce.
Speaker 1: At Edward Jones, I am the median financial advisor. I'm
Speaker 1: a white in my fifties. That's the vast majority of
Speaker 1: the industry. What should we in the industry be doing
Speaker 1: to try and bring about more gender diversity, more people
Speaker 1: of color, just making less of of what's been dominating
Speaker 1: the industry, bringing a little diversity of thought and and
Speaker 1: a little bit of change. Yeah, well, UM, I think
Speaker 1: we've got to ask why is that important to do? UM?
Speaker 1: Let me let me share with you what our statistics
Speaker 1: are are. The average age of our financial advisors is
Speaker 1: forty five years old. Of our financial advisors are women.
Speaker 1: A couple of percentage points higher than on average in
Speaker 1: our industry, and about nine of our financial advisors are
Speaker 1: people of color. Again maybe a point or so higher
Speaker 1: than than the average in the industry. But the reason
Speaker 1: that I share that is really to say that, um,
Speaker 1: two things. We we have been focused on this and
Speaker 1: on a path toward greater diversity for for a couple
Speaker 1: of decades. Um, we are not where we want to be.
Speaker 1: There is so much more opportunity, and so that gets
Speaker 1: to the question of why is this important? Well, this
Speaker 1: is important because it is critical for the investing public
Speaker 1: to have choices about who who they are advised by,
Speaker 1: and to have a sense that the companies that that
Speaker 1: they are doing business with, reflect the environment around them,
Speaker 1: reflect who they are, that that investors and clients also
Speaker 1: have a sense of belonging belonging at that firm, with
Speaker 1: that group of financial advisors. Now I am not saying
Speaker 1: that if you're a woman investor you always want to
Speaker 1: be served by a woman financial advisor, or if you're
Speaker 1: a black investor or client, that you want a black
Speaker 1: financial advisor or a white financial advisor. What my point
Speaker 1: is that that you have a choice, uh that you
Speaker 1: look at the faith literally of the organization that you
Speaker 1: are working with and say, you know that that place
Speaker 1: is open to all. UM is eager to serve a
Speaker 1: diversified marketplace, and are the marketplace is becoming more and
Speaker 1: more diversified less homogeneous every single day. Uh. And so
Speaker 1: that's the big why why why diversity is such such
Speaker 1: a driver for our industry. And just as you said,
Speaker 1: our industry for too long has been more homogeneous in
Speaker 1: its makeup, and UM that that it will it will
Speaker 1: do us good. It is doing us good by looking
Speaker 1: at the marketplace we serve and reflecting the needs and
Speaker 1: desires of that marketplace. So let's talk about a couple
Speaker 1: of more recent investing sings that have come along. Obviously,
Speaker 1: robo advisors were a big thing. They made a big
Speaker 1: splash pretty much around the financial crisis era, and they've
Speaker 1: expanded pretty rapidly over the past decade. What are your
Speaker 1: thoughts on automated investing and those sort of software driven advisors. Yeah, well,
Speaker 1: you know, you could go back to nineteen night in
Speaker 1: the nineteen nineties and look at online trading and the
Speaker 1: advent of online trading during that period of time. As
Speaker 1: kind of the first robo advisor It wasn't exactly an
Speaker 1: advisor per se, but it was the ability UM to
Speaker 1: trade online. Goes back to Ted Jones saying, you know
Speaker 1: what what is where is the underserved market or what
Speaker 1: is the new innovation in the marketplace? And online trading
Speaker 1: came about, UM, it has proliferated and now UM you
Speaker 1: know through areas robot advisors includes more advice associated with
Speaker 1: that trading because that's what investors are demanding. As I
Speaker 1: said earlier, the trade itself. Executing a trade in the
Speaker 1: marketplaces is nearly a free good, UH, and there's much
Speaker 1: more value to be delivered in providing advice. So the
Speaker 1: robot advisor as a way to do that. We know
Speaker 1: UM is appropriate for some investors. We believe that fifteen
Speaker 1: of the marketplace is appropriately self advised, and so robo advisors, UH,
Speaker 1: those that that have very little human interaction associated with
Speaker 1: them are are appropriate for some clients. UM. Where where
Speaker 1: that begins to break down is when markets are sanguine,
Speaker 1: when things or seem easy, and when goals are straightforward
Speaker 1: in terms of the tradeoffs between and among goals, it's
Speaker 1: a little bit easier to take a hands off approach
Speaker 1: or to have that done in a in a mechanical way.
Speaker 1: It's when markets become volatile, which happens unexpectedly when folks
Speaker 1: are are dealing with emotional and complex tradeoffs amongst things
Speaker 1: like you know, how do I say for for college
Speaker 1: for my child or grandchild and have a comfortable retirement
Speaker 1: at the same time. That's not just a mathematical question equation. Actually,
Speaker 1: it's a very emotional conversation about where where values go,
Speaker 1: about what those tradeoffs are going to mean to a
Speaker 1: particular individual or a family. And that's where humanity is
Speaker 1: really important in terms of how we interact between financial
Speaker 1: advisor and client. H really interesting. So the nineties we
Speaker 1: had all that crazy online trading. You mentioned the transition
Speaker 1: to practically free. The modern era, we have apps like
Speaker 1: robin Hood, which supposedly millennials and other young people really
Speaker 1: are liking and engaging in a lot of active day trading.
Speaker 1: Given that everybody's board and stuck at home. Um, what
Speaker 1: do you do when you have a client who is
Speaker 1: enthusiastically swinging cash around because they're bored? How do you
Speaker 1: manage that from from the perspective of Hey, everything we've
Speaker 1: talked about is long term, but but you're in and
Speaker 1: out of stocks every other day. Let's isn't that a
Speaker 1: risky behavior? How do you, as the long term advisor
Speaker 1: manage that? Yeah, well, we go back to UM to
Speaker 1: what a serious long term individual investor is that someone
Speaker 1: who's values advice, who appreciates relationship, and who has a
Speaker 1: long term orientation. The valuing advice is Where that's going
Speaker 1: to come in is UM is sharing with clients and
Speaker 1: investors that beating the market. UM trading in a rapid
Speaker 1: way in order to time the market or time particular
Speaker 1: investment sectors. UM is not a not a particularly good
Speaker 1: way to build wealth reliably over time. That can be proven.
Speaker 1: Uh and in fact, here's here's here's part of that proof.
Speaker 1: Clients who are advised by financial advisors on average have
Speaker 1: more assets than those who are not advised, and financial
Speaker 1: advisors share this kind of investment philosophy with clients. Diversification
Speaker 1: is important. You can't beat and time the market on
Speaker 1: a on a daily or weekly basis, and you need
Speaker 1: to be focused on the long term putting money away,
Speaker 1: investing wisely and high quality investments, albeit rotating them and
Speaker 1: reallocating them as markets change. So UM, you know you
Speaker 1: know Verry you you probably have had this experience. Um,
Speaker 1: you have to say that over and over and over again.
Speaker 1: That is part of the relationship and is part of
Speaker 1: the goodness of having a financial advisor, is that as
Speaker 1: a as a client, you are going to hear that
Speaker 1: advice again and again and again. Take the emotion out
Speaker 1: of it, stick to quality and to the long term. Huh.
Speaker 1: Quite interesting. So we were talking earlier about robin hood
Speaker 1: and people trading at home. Most of the data I've
Speaker 1: seen about what happens when a client passes away and
Speaker 1: the next generation inherits the wealth is that they tend
Speaker 1: not to stick with the existing advisor. How do you
Speaker 1: manage that? What should advisors be doing so that when
Speaker 1: there is a generational wealth transfer, the next generation sticks
Speaker 1: with the company or the advisor they're working with. We
Speaker 1: have to be relevant to the next generation. We have
Speaker 1: to have built a relationship with them where mom and
Speaker 1: dad or grandma and grandpa have a particular set of values,
Speaker 1: a particular set of goals, a particular type of portfolio
Speaker 1: that we know from working with multiple generations of clients
Speaker 1: that what that generation, what that that grandmother, grandfather, mother,
Speaker 1: father are really interested in is passing on their values
Speaker 1: to their children and their grandchildren. Now those values can
Speaker 1: pass through the wealth. UM. But but it's it's more
Speaker 1: than that, isn't it. It's Uh, it's recognizing what that
Speaker 1: family desires to accomplish together and what that next generation
Speaker 1: is motivated by. And frankly, the millennials, that Gen xers
Speaker 1: are motivated differently than their parents and their grandparents. And
Speaker 1: the goodness of the human relationship financial advisor to client
Speaker 1: in perspective client is it's the financial advisor's job to
Speaker 1: understand that, to find out what's important to that next generation,
Speaker 1: what their values are, what motivates them, and UM to
Speaker 1: help form a bridge between the values of the of
Speaker 1: the previous generation and the next generation. There's some really
Speaker 1: important things happening. UH. And this this typically happens. Actually
Speaker 1: it's through research you can show it happens with the
Speaker 1: next generation quote unquote when there has been a significant
Speaker 1: and traumatic event in the marketplace, in the economy, uh,
Speaker 1: in society, and there's a significant impact on the risk
Speaker 1: appetite of of generations younger folks whose whose points of
Speaker 1: view about the world and society are being formed in
Speaker 1: in that crucible um, their risk appetite is affected, their
Speaker 1: trust and institutions is affected, and their reflection on what's
Speaker 1: going to be important to them and going to be
Speaker 1: driving them for the rest of their life is affected.
Speaker 1: You know, the really classic one is folks who grew
Speaker 1: up during the Great Depression and our parents and grandparents
Speaker 1: who who we know and can can see from them
Speaker 1: how they live the rest of their lives based on
Speaker 1: those experiences. Uh that that's really the one that many
Speaker 1: people point to. But people who are coming of age
Speaker 1: dur in the Great Recession and people who are who
Speaker 1: are being impacted today during their working lives, this is
Speaker 1: going to have a lasting impact on them, and so
Speaker 1: as financial advisors recognizing that digging deep into that with
Speaker 1: the next generation is going to help us help them
Speaker 1: be better investors and prepare for a very long life,
Speaker 1: probably much longer than their parents or grandparents had. Quite interesting,
Speaker 1: whenever we see surveys of millennials, there is a very
Speaker 1: enthusiastic embrace of E s G investing or impact investing
Speaker 1: or socially responsible investing. I'm not so sure I've seen
Speaker 1: the dollar flows match that investing enthusiasm just yet, but
Speaker 1: it certainly seems like it's a trend that's developing, a
Speaker 1: work in progress. What are your thoughts on environmental, social
Speaker 1: and governments investing E s G investing. Is this something
Speaker 1: that's going to have a lasting impact or the jury
Speaker 1: is still out? Yeah, it's such a rich topic of
Speaker 1: conversation in one that there's so much focus on in
Speaker 1: our industry and with investors right now. And fundamentally, what
Speaker 1: we're talking about is having our investment portfolios reflect our
Speaker 1: values as as individuals, whatever those maybe, UM, but lining
Speaker 1: up our our portfolios with our values UM. I think
Speaker 1: in individuals, consumers are doing this broadly, aren't we. I
Speaker 1: mean you you you read a lot and see a
Speaker 1: lot and maybe it's your own personal experience that you're
Speaker 1: buying today according to your values. What research says that
Speaker 1: UM consumers are focused on brands that they see as
Speaker 1: being helpful during this pandemic UM, where they see local helpfulness,
Speaker 1: where they seem organizations that are are trying to be
Speaker 1: part of solutions that that is driving consumers to buy differently.
Speaker 1: So you can expect that that's going to happen in
Speaker 1: the investment markets as well. When when you talk about
Speaker 1: E s G Investing. I do. I do want to
Speaker 1: note that sound Investing has always focused on companies and
Speaker 1: management teams that were uh there, that we're focused on
Speaker 1: the durability of their firms, that we're focused on on
Speaker 1: a wide array of stakeholders. Because if you don't do
Speaker 1: that as a company, um, you're probably not going to
Speaker 1: be around for a long, long time. And so there
Speaker 1: are new labels that are put on at E. S. G.
Speaker 1: Green Investing, all kinds of things, UM that label this
Speaker 1: this type of fundamental orientation to multiple stakeholders and to
Speaker 1: the long term. But it is, I believe Mary, to
Speaker 1: your point, it is going to become an ever greater
Speaker 1: h point of emphasis for for younger generations as they
Speaker 1: as they grow into their investing lives. You mentioned earlier
Speaker 1: that we're in a low yield environment and probably lower
Speaker 1: for longer. What does that do to people who are
Speaker 1: looking for income from bonds? What does that mean for
Speaker 1: the traditional sixty forty portfolio? Yeah, um, well, what it
Speaker 1: means is that a bond that you that you bought
Speaker 1: a decade ago in a very different interest rate environment
Speaker 1: was yielding to you a higher rate of income and
Speaker 1: very classically the sixty forty portfolio UM enabled you to
Speaker 1: live off of that income from that fixed income differently
Speaker 1: a few years ago than you would be able to today.
Speaker 1: And so while the split of the portfolio may still
Speaker 1: be seventy thirty or sixty forty, and I don't want
Speaker 1: to get hung up on that split, those rules of
Speaker 1: thumb can sometimes be dangerous. The point is that fixed
Speaker 1: income and stocks, equities and bonds um form the basis
Speaker 1: of a diversified portfolio, and nobody has repealed the the
Speaker 1: fact that where you invest in non correlated assets, you
Speaker 1: are likelier to have a smoother ride during a volatile market.
Speaker 1: And so fixed income or bonds and equities or stocks
Speaker 1: in the right measure for your risk appetite and your
Speaker 1: time horizon continues to be very important. However, living off
Speaker 1: the income of those bond onnes is gonna be a
Speaker 1: little more challenging than it was several years ago. Diversification
Speaker 1: remains very very important now. The flip side of a
Speaker 1: low interest rate environment is that a low interest rate
Speaker 1: environment generally correlates with a fundamentally strong stock market. Uh
Speaker 1: and and we we've seen that over the past ten years. UM,
Speaker 1: So you don't don't don't despair completely in a low
Speaker 1: interest rate environment. There's some counter veiling benefits to that
Speaker 1: that kind of environment. So let's talk about some other
Speaker 1: non correlated assets. What do you think about alternatives such
Speaker 1: as private equity or venture capital. Well, that's getting a
Speaker 1: lot of press these days because there is a significant portion,
Speaker 1: of a more significant portion of of businesses and capital
Speaker 1: formation that is happening outside of the public Mark our
Speaker 1: get and public companies um for the vitality of our economy,
Speaker 1: for the different ways that capital can be created and
Speaker 1: companies can be formed and scaled and grown. I think
Speaker 1: that that's a very healthy thing. Um. What I think
Speaker 1: we have to be really thoughtful about is long term investors,
Speaker 1: is that the public market affords a kind of transparency
Speaker 1: into companies and access to to those companies and owning
Speaker 1: shares in those companies. That results in liquidity, that results
Speaker 1: in ways to verify the financials of those companies. That
Speaker 1: all results in a kind of transparency and reliability. That
Speaker 1: is a really important part of capitalism and about the
Speaker 1: public nature of our stock markets. So flip that over
Speaker 1: and say that venture capital and private equity UM, while
Speaker 1: a really important part of capital formation, and our economy.
Speaker 1: When when an investor gets all whipped up about returns
Speaker 1: that they see or read about or hear about in
Speaker 1: those markets, they have to recognize that that comes with
Speaker 1: a tradeoff, tradeoff of risk, a tradeoff of less transparency,
Speaker 1: different kinds of risks I liquidity, uh, different kind of
Speaker 1: risks than they see in the public markets, and so
Speaker 1: everything in moderation um and recognizing that broad diversification, asset
Speaker 1: allocation across a number of asset classes is what has
Speaker 1: reliably grown wealth over time. So I know the data
Speaker 1: I'm about, the reference is old, but let me uh,
Speaker 1: let me play with it a little bit and tell
Speaker 1: me how far off I am. Your revenue has more
Speaker 1: than doubled from three point five billion to over seven
Speaker 1: point five billion not too long ago. It raises the question,
Speaker 1: what sort of practice areas are there left for you
Speaker 1: to expand into. Where is the room for growth at
Speaker 1: Edward Jones. Yeah, we talk about growth very in terms
Speaker 1: of growth of impact. The impact that we want to
Speaker 1: have is driven by our purpose. Our purpose is to
Speaker 1: make a meaningful difference in the lives of more people
Speaker 1: in North America and the part of the marketplace that
Speaker 1: we serve our serious long term individual investors um and
Speaker 1: I've said a couple of times what that means is
Speaker 1: folks who value relationship, who want advice, and who have
Speaker 1: a long term orientation. Today we work with about seven
Speaker 1: million clients. Our research shows that there are forty million
Speaker 1: investors in North America who look like serious long term
Speaker 1: individual investors. Now they are across multiple generations, across various demographics,
Speaker 1: and spread all over North America. So our addressable market
Speaker 1: is is significantly larger than the marketplace that we serve today.
Speaker 1: So we believe our opportunity remains rooted in what makes
Speaker 1: us unique, the human settered nous of what we do
Speaker 1: and the locality of what we do. And so we
Speaker 1: intend to to continue to focus there, focus on on
Speaker 1: the relationship that we have with clients, focus on a
Speaker 1: kind of smart consistency and serving them, but also the
Speaker 1: ability to hyper personalize to them. That takes greater technology,
Speaker 1: It takes frankly, being more relevant to younger generations, because
Speaker 1: it really suits our purpose to make a meaningful difference
Speaker 1: in more lives. If we get emerging investors started as
Speaker 1: serious long term investors, if we get them started towards
Speaker 1: their goals sooner. Frankly, they're going to live a whole
Speaker 1: lot longer than their parents or grandparents. They got to
Speaker 1: build up more investment over time in order to achieve
Speaker 1: what's most important to them. So let's talk a little
Speaker 1: bit about practice areas. I know you guys do financial
Speaker 1: planning as well as asset management. Do you also have
Speaker 1: other practice areas like trust in the States, tax planning, insurance,
Speaker 1: anything along those lines. Yeah, you bet so. Our financial
Speaker 1: advisors are licensed, uh in a number of different areas.
Speaker 1: We are duly registered as a firm, so we are
Speaker 1: a brokerage firm as well as having investment advisory fee
Speaker 1: based platforms to help our clients and achieve their asset
Speaker 1: management goals over time. We are also like sens in insurance,
Speaker 1: so we help our clients protect their goals um against
Speaker 1: all kinds of things that might happen. You know, the
Speaker 1: the worst thing in the world is to build a
Speaker 1: really solid plan um planning on everything going right and
Speaker 1: then having things go wrong unexpectedly. So things like long
Speaker 1: term care needs. Um. You know, this is an area
Speaker 1: verywhere where people are becoming more attuned to the fact
Speaker 1: that they are going to need significant investment to pay
Speaker 1: for their health needs and potential long term care needs
Speaker 1: later or maybe even earlier in life as well as
Speaker 1: life insurance. And so we represent and and help our
Speaker 1: clients protect their goals as well. UM. We have we
Speaker 1: have products and services that are tax efficient, UM that
Speaker 1: help our clients manage in that kind of situation. UM.
Speaker 1: We also help our clients with charitable planning. UM. This
Speaker 1: is something that that really aligns with folks values, with
Speaker 1: their goals, with the values that they want to pass
Speaker 1: on to the next generation, is their charitable mindedness. And
Speaker 1: so we help our clients with that as well. And
Speaker 1: then we work with with a significant number of businesses
Speaker 1: and business owners, so helping them with their employee retirement plans. Therefore,
Speaker 1: oh one K there, simple step, I raise all the
Speaker 1: different ways that they can support their employees for their
Speaker 1: retirement planning. We do that for businesses and business owners.
Speaker 1: Quite interesting. Before I get to my favorite questions that
Speaker 1: I ask all my guests, let me throw a curveball
Speaker 1: at you dancing with the stars. What was what was that? Oh, Barry,
Speaker 1: you've been doing too much research. I think that's on
Speaker 1: the third page of my of of the Internet search
Speaker 1: so ding from Google. Yeah, we have a local organization,
Speaker 1: a tremendous organization called the Independent Center, and they provide UM.
Speaker 1: They provide support services, full lifestyle support services for adults
Speaker 1: with mental illness UM, and they surround those people with
Speaker 1: UH with with the services they need to live lives
Speaker 1: of meaning and well being. Well. They also have one
Speaker 1: of the most unusual fundraisers every year, and that's called
Speaker 1: Dancing with the St. Louis Stars, and so UM executives
Speaker 1: and and community leaders here in town agree to work
Speaker 1: with a professional dancer, get eight lessons and then do
Speaker 1: that dance in front of seven people. And so I
Speaker 1: did that a few years ago. I learned how to tango.
Speaker 1: And I tell you it was I have a mantra
Speaker 1: do something every day that that terrifies you just a
Speaker 1: little bit. Well, I had my dose the day that
Speaker 1: I did that. But the point wash was not the dancing.
Speaker 1: It was it was raising support for that incredible organization.
Speaker 1: Quite amusing. All right, So let's jump to our favorite questions.
Speaker 1: We asked these of all of our guests, and and
Speaker 1: let's start with the first one. What are you watching
Speaker 1: and streaming these days? What what's keeping you busy under lockdown,
Speaker 1: either Netflix or Amazon or or any podcast you're watching,
Speaker 1: tell us what's entertaining you during this era. Yeah, well
Speaker 1: it's a little bit different than Netflix or podcasts, but
Speaker 1: but it's art I love and appreciate, in particular contemporary art.
Speaker 1: And what I find is that as I study and
Speaker 1: watch all kinds of virtual tours of museums all over
Speaker 1: the world, which has been a real silver lining of
Speaker 1: the lockdown. Haven't been able to go see it in person,
Speaker 1: but but digitally, I'm able to experience all kinds of
Speaker 1: different art and artists and what's inspiring to me about
Speaker 1: that is them making sense of the world during times
Speaker 1: of tumult, during times of high anxiety, and getting that
Speaker 1: out and putting it on canvas or in performance or
Speaker 1: in music. Um is is another way to think about
Speaker 1: how to serve, how to relieve anxiety, uh and and
Speaker 1: and how to make sense of the world around us.
Speaker 1: You know, my wife teaches art, and I've been dragged
Speaker 1: to museums all around the world and one of the
Speaker 1: documentaries we stream not too long ago was on Mark Rothko.
Speaker 1: And if you're if you like contemporary art, that's I'm
Speaker 1: gonna make that recommendation because it was pretty fascinating discussion
Speaker 1: of how his art evolved into what it eventually became. Yes,
Speaker 1: thank you for that suggestion. He's one of my favorites. Yeah,
Speaker 1: me too. And it wasn't twenty years ago. I sort
Speaker 1: of did a one eighty on Rothco and I have
Speaker 1: no explanation for why other than I hit a certain
Speaker 1: age and suddenly, oh, that's not just a splotch of color.
Speaker 1: That's a lot of really interesting things going on. Um,
Speaker 1: maybe maybe she shepherded me along. Let's talk about your mentors.
Speaker 1: Tell us about the folks who helped shape your career. Yeah, um,
Speaker 1: you know the folks who helped shape my life most fundamentally,
Speaker 1: or my parents. Um, my father who was an executive
Speaker 1: at a publicly traded firm in Nashville. Um, who started
Speaker 1: in on the factory floor quite literally, and retired as
Speaker 1: the CEO of that organization. So the daddy daughter CEO
Speaker 1: thing is is kind of a fun story. But um.
Speaker 1: But but more importantly, the way that he thought about business,
Speaker 1: about leadership, about integrity and trustworthiness in the business world,
Speaker 1: about relationship building shaped me. My mother was an executive
Speaker 1: with Tennessee Valley authority, and she was an executive during
Speaker 1: a time and in a place that there weren't quite
Speaker 1: there weren't quite as many women as there were men.
Speaker 1: And so watching her operate UM and learn and UH
Speaker 1: and put up with stuff UH during that time across
Speaker 1: a very long career, was when it was inspiring and
Speaker 1: instructive to me UM in business UH as as part
Speaker 1: of my journey at Edward Jones, we have a very
Speaker 1: widely dispersed UM leadership structure in each of our regions
Speaker 1: across North America. And so my regional leaders, those who
Speaker 1: showed me the way as a new financial advisor UM
Speaker 1: talked to me about values about service UM. They were
Speaker 1: very inspiring to me. And then then my predecessors as
Speaker 1: UM as managing partners here, I'm a student of them.
Speaker 1: Some of them I know and worked with directly. Others
Speaker 1: of I never met Mr Jones Senior and Ted Jones,
Speaker 1: the founders of our firm. I am the first managing
Speaker 1: partner who never met them, So becoming a student of
Speaker 1: their values, of their strategy, about how they thought about
Speaker 1: being differentiated in the marketplace. UM. Those have all have
Speaker 1: all taught me great lessons, very interesting let's go to
Speaker 1: everybody's favorite question books. Tell us what you're reading now,
Speaker 1: and perhaps give us a few titles of some of
Speaker 1: your favorite books. Yeah. So I'm reading a book called
Speaker 1: um uh Agile Transformation Without Chaos. Its focuses on the
Speaker 1: way that companies are organized to create better experiences for
Speaker 1: consumers and clients, organized in an agile way to meet
Speaker 1: the marketplace more quickly, uh and in a more experimental way.
Speaker 1: So I'm reading that. I have several art books stacked
Speaker 1: up on my table, and I'm reading a book by
Speaker 1: David Brooks. It's a new book, it's a It's a
Speaker 1: compilation of interviews that he had done over time with
Speaker 1: some of the world's leading u the spinkers, community builders leaders,
Speaker 1: uh and so just getting their their quick interviews and
Speaker 1: getting a window into those folks. I read one of
Speaker 1: those interviews tonight. Is is really inspiring as well, very interesting.
Speaker 1: What sort of advice would you give to a recent
Speaker 1: college graduate who was interested in a career in finance?
Speaker 1: Very broadly, the advice that I give to everyone as
Speaker 1: they think about their career is ensure that what you're
Speaker 1: doing is lined up with your own personal and professional
Speaker 1: Why I say, what are you really doing when you're
Speaker 1: doing what you're doing every day? I'll say again, what
Speaker 1: are you really doing when you're doing what you're doing
Speaker 1: every day? What is it ladder up to in terms
Speaker 1: of the mark that you want to make on the world.
Speaker 1: Not not the position that you want to have, or
Speaker 1: the role that you want to attain, or the income
Speaker 1: that you desire to have over time, That's not what
Speaker 1: I'm talking about. I'm talking about the mark that you
Speaker 1: want to leave on the world. And so whatever you're doing,
Speaker 1: if it is in financial services, um really reflect on
Speaker 1: how it ladders up to to the person that you
Speaker 1: want to be in the mark that you want to leave.
Speaker 1: I will say very enthusiastically that the financial markets, financial
Speaker 1: services makes a meaningful and positive difference in the world,
Speaker 1: on our country. It can have a much more influential
Speaker 1: impact on society, on communities, on human beings and society.
Speaker 1: And I think that financial services is very much focused
Speaker 1: there today. And so the advice that I would give
Speaker 1: to to those recent college graduates is look at this
Speaker 1: industry as one um that has and will continue to
Speaker 1: be very meaningful in our country and in society. That
Speaker 1: it can intersect with who you are as a person.
Speaker 1: It is not all math and numbers. That's a common
Speaker 1: misconception about the financial services industry. There's certainly parts of
Speaker 1: it that are UM, but there's a vast part of
Speaker 1: this industry UM that that is that is all about
Speaker 1: making connection with human beings and understanding what they value
Speaker 1: in helping them achieve that. And our final question, what
Speaker 1: do you know about the world of financial services today
Speaker 1: that you wish you knew twenty five or so years
Speaker 1: ago when you were first starting out. Well, what I
Speaker 1: probably didn't appreciate UM as I was first starting out,
Speaker 1: was how intersect the financial services industry and world is
Speaker 1: with the trajectory of history, UM, the history of our economy,
Speaker 1: the history of formation of communities and society, UM, the
Speaker 1: history of achievement by individuals, families, and businesses, and so
Speaker 1: charting the course of history being really having a front
Speaker 1: row seat too. You know when I started in nineteen
Speaker 1: eighty five at a bank night seven and the market
Speaker 1: melt down there, UM, the technology evolution revolution in the
Speaker 1: nineteen nineties, UM, the great recession that we had talked
Speaker 1: about earlier, uh, and currently what we're facing in our
Speaker 1: economy I'm a student of history, and so just having
Speaker 1: a front row seat to how the how the economy,
Speaker 1: financial industry, and society intersect has and fascinating and I
Speaker 1: and I guess when I'm in my armchair after all
Speaker 1: of this is over and look back on it, um,
Speaker 1: I'll really be able to see something about the arc
Speaker 1: of history UM from a from a ground level view.
Speaker 1: Thanks Penny for being so generous with your time. We
Speaker 1: have been speaking with Penny Pennington, managing partner at Investment
Speaker 1: Giant ed Jones. If you enjoy this conversation, well, be
Speaker 1: sure and check out all of the hundreds of previous
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Speaker 1: did not thank the crack staff that helps put these
Speaker 1: conversations together each week. Nick Falco is my audio engineer.
Speaker 1: Michael Boyle is my producer. Slash booker A Tico. Valbrunn
Speaker 1: is our project manager. Michael Batnick is our head of research.
Speaker 1: I'm Barry Results. You've been listening to Masters in Business
Speaker 1: on Bloomberg Radio