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Interview With Kelly Coffey: Masters in Business (Audio) · Masters in Business

0:03
Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
0:08
Speaker 1: We have a very special guest. Uh. It's really kind
0:11
Speaker 1: of a fascinating um individual in that I know of
0:17
Speaker 1: no other person who is responsible for more assets, no
0:21
Speaker 1: other woman who is higher ranking in the world of finance,
0:27
Speaker 1: and yet at the same time is not only unknown
0:31
Speaker 1: to the investing public in general, is probably fairly unknown
0:37
Speaker 1: within the world of financial asset management, meaning people who
0:42
Speaker 1: work in finance probably haven't heard of Horror as much
0:47
Speaker 1: as they've heard of some some more famous money managers.
0:51
Speaker 1: Everybody knows who Jamie Diamond is, He's the CEO of
0:54
Speaker 1: JP Morgan, but how many people know who the chief
0:58
Speaker 1: executive officer, the c e O of JP Morgan Private
1:02
Speaker 1: Bank is. They managed six hundred and fifty billion dollars,
1:05
Speaker 1: They're a huge, huge player in the world of asset management,
1:10
Speaker 1: and I bet most of you don't know who Kelly
1:13
Speaker 1: Coffee is. Well. We spent a delightful hour and change
1:17
Speaker 1: chatting about what it's like being a woman on Wall Street,
1:21
Speaker 1: what it was like being at a big bank in
1:23
Speaker 1: the midst of the financial crisis, and what exactly the
1:27
Speaker 1: CEO of JP Morgan Private Bank actually does. I found
1:32
Speaker 1: the conversation really quite fascinating, and I expect you will also, so,
1:37
Speaker 1: without any further ado, my conversation with Kelly Coffee. This
1:44
Speaker 1: is Masters in Business with Barry Ridholts on Bloomberg Radio.
1:49
Speaker 1: My special guest this week is Kelly Coffee. She might
1:53
Speaker 1: be the most influential woman in finance who you've never
1:56
Speaker 1: heard of. She is the CEO of JP Morrigan Private Bank,
2:01
Speaker 1: which manages over six hundred and fifty billion dollars in
2:05
Speaker 1: client assets. Her background, she has a bachelor's and International
2:10
Speaker 1: Affairs and French at Lafayette College, a master's and Fire
2:14
Speaker 1: and Service at Georgetown University. She's a member of the
2:17
Speaker 1: Global Wealth Management Operating Committee at JP Morgan and also
2:22
Speaker 1: executive sponsor for the Asset Management Woman's Network. Kelly Coffee,
2:27
Speaker 1: Welcome to Boomberg. Thank you. It's wonderful to be here.
2:29
Speaker 1: So you have a really interesting background. Starting you've been
2:34
Speaker 1: at JP Morgan for quite a while. You've worked you
2:36
Speaker 1: withy through number of departments. But before we get to
2:38
Speaker 1: life at JP Morgan, tell us a little bit about
2:41
Speaker 1: your background. How did you get into the financial services
2:44
Speaker 1: industry with a background in French and foreign service. Uh,
2:49
Speaker 1: I think I'm an accidental entrance into this, into this career.
2:52
Speaker 1: My undergrad degree, as you said, in my graduate degrees
2:55
Speaker 1: in international affairs. I wanted to study the world and
2:57
Speaker 1: how how it worked, and that was always fine fascinating
3:01
Speaker 1: to me. My other choice for my undergraduate major would
3:04
Speaker 1: have been math, but at eighteen years old, I couldn't
3:07
Speaker 1: figure out what I would have done with a math degree,
3:08
Speaker 1: so I just studied that um. And so when I
3:13
Speaker 1: was coming out of Georgetown, I had a decision to make.
3:17
Speaker 1: I could have been interestingly an observer at the European
3:22
Speaker 1: Union Integration Talks three pre the the euro and all
3:27
Speaker 1: of the things that we're talking about will it become
3:29
Speaker 1: dismantled today? And the birth you could go to. I
3:33
Speaker 1: could go to the funeral. Let's hope not we're at that,
3:35
Speaker 1: we don't go to that funeral, but or go go
3:38
Speaker 1: to Wall Street. And I thought, since I didn't do
3:40
Speaker 1: an MBA, that I should get just some grounding and finance.
3:43
Speaker 1: So I went to JP Morgan because they had a
3:45
Speaker 1: great training program. I met some fantastic people, and I
3:48
Speaker 1: would do it for a couple of years and years
3:51
Speaker 1: ago probably, and now you're running the private bank. So
3:54
Speaker 1: you were in a number of different departments, kind of
3:56
Speaker 1: work your way through. Tell us about the different divisions
3:59
Speaker 1: that you either worked at or rent. I started in
4:03
Speaker 1: corporate finance and M and A because it was it
4:06
Speaker 1: was what I knew and I thought that would be
4:08
Speaker 1: the best part. It was. It was fantastic place for me.
4:10
Speaker 1: I loved building models, and pretty quickly in that I
4:14
Speaker 1: was asked to move to Argentina for US when Argentina
4:17
Speaker 1: was privatizing its industry. So we actually, hopefully we're going
4:20
Speaker 1: into that kind of phase of Argentina today with ma
4:22
Speaker 1: Cri carry every cycle they did. We've seen the same
4:27
Speaker 1: thing in Brazil and Mexico every few years is a
4:29
Speaker 1: big regime change. So I went. I went there when
4:32
Speaker 1: Menem was president. Cavallo was the finance minister, who was
4:35
Speaker 1: a rock star in my eyes, and they had put
4:38
Speaker 1: in place something called convertibility. They pegged Paso to the
4:40
Speaker 1: dollar one for one, and then we were helping with
4:43
Speaker 1: the privatization program. So JP Morgan, together with the French
4:47
Speaker 1: and the Italian and a local company called pets comp
4:49
Speaker 1: Punk bought the phone company in the north of Argentina,
4:52
Speaker 1: and we financed it and then we ultimately took a
4:54
Speaker 1: public but I I was pulled down there to work
4:57
Speaker 1: on that, and I stayed for about five years. And
4:59
Speaker 1: all these were own entities that were spinning out. They
5:04
Speaker 1: privatized it, then you helped take it public. Did the
5:06
Speaker 1: international affairs French and everything else help with that? Help?
5:10
Speaker 1: I mean, of course now I'm fluent in Spanish, I
5:11
Speaker 1: spoke French when I went there, But it did I
5:14
Speaker 1: think my undergraduate degree and my graduate degree, particular in
5:17
Speaker 1: international affairs from Georgetown. It taught you how to take
5:20
Speaker 1: really complicated things and distill them down to the essence.
5:23
Speaker 1: And there's an analytical part of that. It's not all
5:25
Speaker 1: not all of that is numbers. And I think it
5:27
Speaker 1: did help me, particularly when we were negotiating and you
5:30
Speaker 1: had the French, the Italians, the Argentine and the Americans
5:34
Speaker 1: US trying to agree on something in a consortium as
5:37
Speaker 1: joint owners. I think it served me well. And some
5:39
Speaker 1: of those met everybody speaking English. I'm assuming in those
5:42
Speaker 1: meetings everybody spoke English in those meetings. Of course I
5:44
Speaker 1: became fluent in Spanish. But yeah, we you know a
5:46
Speaker 1: lot of those. A lot of that business is done
5:49
Speaker 1: in English. Uh. And it was interesting even though and
5:52
Speaker 1: even in Argentina are English. We would have held the
5:55
Speaker 1: meetings in Spanish verbally, but all of our presentation materials
5:58
Speaker 1: were in English, but just been because we're in an
6:01
Speaker 1: American bank. How long were you down in Argentina? About
6:03
Speaker 1: five years? Right? It's really lovely. It's beautiful so and
6:08
Speaker 1: I hope it becomes really prosperous now with that they
6:11
Speaker 1: have of tremendous resources and raw materials and commodities. It
6:16
Speaker 1: just seems that every few years they seem to slip
6:19
Speaker 1: off the tracks and it takes a long time to
6:20
Speaker 1: get back on on pace. And hopefully I'm also slaves
6:26
Speaker 1: to the comality market. You have a huge run up
6:28
Speaker 1: cause by China, and then the run back down and
6:30
Speaker 1: suddenly they're out over their skis. And it seems that
6:33
Speaker 1: nobody seems to learn from the cycle. Hey, kamalities are booming,
6:36
Speaker 1: let's let's you know, build this, sell that, and all
6:39
Speaker 1: of a sudden it goes the other way and what
6:41
Speaker 1: a surprise. Yeah. I think Argentina they do have enough
6:44
Speaker 1: of a of a market internally, and and if the
6:46
Speaker 1: government does this right, I think it can work beyond that. Sem.
6:49
Speaker 1: So let's bring you back to UH New York and
6:51
Speaker 1: the private bank. What's the difference between the private bank
6:55
Speaker 1: and a regular bank. The private bank is actually a
6:59
Speaker 1: microcosm of the higher firm because when need think about
7:02
Speaker 1: who we do business with, it's it's it's extremely wealthy
7:06
Speaker 1: clients who probably they might be business owners, they might
7:08
Speaker 1: do entrepreneurs a number of different ways they got there,
7:11
Speaker 1: and they need us for banking, they need us for credit,
7:14
Speaker 1: they need us for investment advice. They also need us
7:17
Speaker 1: to help sell their businesses sometimes help them think about
7:19
Speaker 1: I p O. So there's not a part of JP
7:22
Speaker 1: Morgan that my business doesn't plug into to make sure
7:25
Speaker 1: I'm getting the best of JP women for each of
7:27
Speaker 1: those clients. So it is really like a bank. We
7:29
Speaker 1: have just steered very hard net worth individuals. It is
7:32
Speaker 1: it is, I mean, JP Morgan serves the whole spectrum
7:35
Speaker 1: right between Chase and we. We we coordinate very closely
7:38
Speaker 1: with that. And the idea is to basically say, this
7:41
Speaker 1: is the client, this is what they need, which is
7:43
Speaker 1: not only delineated by their balance sheet. By the way,
7:46
Speaker 1: as you know, very it's it's really what what do
7:48
Speaker 1: they what do they need advice on? And then let's
7:50
Speaker 1: make sure we're getting that right advice to them the
7:52
Speaker 1: way they want it. I'm Barry rid Helps. You're listening
7:55
Speaker 1: to Masters in Business on Bloomberg Radio. My special guest
7:59
Speaker 1: today is Kelly Coffee. She is the CEO of JP
8:03
Speaker 1: Morgan's Private Bank, which manages about six d and fifty
8:07
Speaker 1: billion dollars in client assets. And one of the things
8:10
Speaker 1: that stood out to me on your bio is that
8:14
Speaker 1: you lead the investment banks Woman's network. And one of
8:18
Speaker 1: the things that I've tried to do with this show
8:21
Speaker 1: is bring more women on. And it's not easy. It
8:24
Speaker 1: is very much a male dominated industry. When I look
8:28
Speaker 1: to bring people on who are female, it's harder to
8:32
Speaker 1: find them, the fewer and further between. Why is that?
8:36
Speaker 1: It's a good question. One of my colleagues always refers
8:38
Speaker 1: to me as the spotted owl because but but I
8:42
Speaker 1: actually think at Jpmarren, we have a pretty incredible group
8:44
Speaker 1: of people. You know, I I don't I don't know
8:47
Speaker 1: that I can put pinpoint what exactly is is the issue? Um,
8:52
Speaker 1: you know, I think that we've done I think what
8:54
Speaker 1: it takes to actually help women advance. First of all,
8:58
Speaker 1: they have to be interested, and then second of all,
9:01
Speaker 1: they have to have advocates. And and we've we've done
9:04
Speaker 1: a number of different things. I have, whether it's at
9:06
Speaker 1: the investment bank, in the Women's network, or in my
9:09
Speaker 1: current business now where I sit and talk to women.
9:12
Speaker 1: There are some who come into my office and I'll
9:15
Speaker 1: I'll say I want to give them a promotion and
9:16
Speaker 1: give them a bigger job, and their first response to
9:19
Speaker 1: me sometimes as well, I'm not sure I'm ready for that.
9:22
Speaker 1: And you would never get that same sort of response
9:24
Speaker 1: from a guy. They would They would fake it till
9:26
Speaker 1: they make it as the old old expression, and that's
9:28
Speaker 1: a male attitude. So women sometimes need a little bit
9:32
Speaker 1: of a push to say, you know what, be ambitious,
9:34
Speaker 1: you can do this, You'll figure it out. I wouldn't
9:36
Speaker 1: be offering it to you if I didn't think you
9:38
Speaker 1: could do it, and I couldn't help you do it,
9:40
Speaker 1: And so there's an element of that. So we previously
9:43
Speaker 1: interviewed Michelle Myers is one of the up and coming
9:46
Speaker 1: economists again on the Bank America Merrill Lynch platform, and
9:50
Speaker 1: one of the questions one of the comments she said
9:52
Speaker 1: that I thought was so interesting. The lack of women
9:56
Speaker 1: at the top of the industry is a challenge for
9:58
Speaker 1: the young women coming up in financed today. Agree with that,
10:02
Speaker 1: And the way she probably meant that is when you
10:05
Speaker 1: want to think about how you can do things, most
10:07
Speaker 1: people need to see somebody who's succeeded to do that
10:10
Speaker 1: no career path that you've witnessed. Oh you can do this,
10:13
Speaker 1: and they want to see that you're you're still you're
10:16
Speaker 1: still basically hacking away through the underbrush, through the wilderness. Yeah,
10:19
Speaker 1: and I think there's some truth to that I have found.
10:22
Speaker 1: When I first ran our derivatives marketing group, I remember
10:25
Speaker 1: coming in and there were very few women in the group,
10:28
Speaker 1: and a couple of them that were in the group
10:29
Speaker 1: I knew probably shouldn't be uh, And what I did
10:33
Speaker 1: was actually make it a conscious effort to sit down
10:37
Speaker 1: and think about who can we pull in and enlist
10:39
Speaker 1: the men, the great men that worked for me. I
10:41
Speaker 1: turned to one of them jokingly said today, you're either
10:43
Speaker 1: going to learn a lot about shoes or you're gonna
10:44
Speaker 1: help me recruit some really amazing women to work with us.
10:47
Speaker 1: And he did. He said, I'm going to do that,
10:49
Speaker 1: and when I shifted to run something else, we were
10:51
Speaker 1: over female. I found that if you got to critical mass,
10:54
Speaker 1: it took care of itself. It becomes self sustaining at
10:56
Speaker 1: that point. And I think at JP Morman we've seen
10:59
Speaker 1: that a bit because if you look at our if
11:01
Speaker 1: you look at our organization, you have Marri Edos wh
11:03
Speaker 1: runs asset management, our CFO Marian Lake as a rock star,
11:07
Speaker 1: Our chief marketing officer Kristin Lemcow is incredible. Uh, Aaron
11:11
Speaker 1: Hill runs all of the branches are branch network, and
11:14
Speaker 1: so we have some women in really visible, big jobs
11:17
Speaker 1: that I think give people that who need that there
11:20
Speaker 1: is a track to get there, and I can do
11:22
Speaker 1: it while still having kids and having a life and
11:24
Speaker 1: all the other things that are important. I think that
11:26
Speaker 1: is what is helpful. There's a lot of academic research
11:29
Speaker 1: out there that says, if you're an investor and you're
11:32
Speaker 1: a woman, the odds are that you're going to have
11:34
Speaker 1: a better return because you don't suffer from what we
11:37
Speaker 1: jokingly refer to as testosterone poisoning. Any truth to that
11:41
Speaker 1: in the real world, I don't know. I I think
11:45
Speaker 1: I've seen that research. I think it's interesting I can
11:48
Speaker 1: say that in general, and this is obviously a gross generalization,
11:51
Speaker 1: women tend to be calmer in their reactions to things.
11:55
Speaker 1: And I know with myself when something's going you know,
11:58
Speaker 1: when the market's going crazy, when we have to make
11:59
Speaker 1: it a decision, I get incredibly calm because that's the
12:01
Speaker 1: way I need to think and process to make the
12:03
Speaker 1: decision um And I think that's not always the case
12:06
Speaker 1: with with some of the male counterparts in the past.
12:09
Speaker 1: So you know, maybe you make better decisions when you're
12:11
Speaker 1: when you're calm. Well, it certainly reflects in in that
12:14
Speaker 1: academic data on on performance, although if you read all
12:17
Speaker 1: those studies there's always footnotes says relatively small sample set.
12:22
Speaker 1: I know, you know, you need a few thousands managers
12:24
Speaker 1: in order to be able to to draining real conclusions. So,
12:28
Speaker 1: since you've joined the industry and progressed up the ladder
12:32
Speaker 1: at JP Morgan, what has changed within the industry for better?
12:37
Speaker 1: A lot has changed within the industry for better? I mean,
12:40
Speaker 1: do you mean specifically for women? Are just generally no,
12:42
Speaker 1: I mean generally generally civily for women? Okay, Well, I
12:44
Speaker 1: would say I was just just a general point that
12:46
Speaker 1: I think is also very positive for women. Just think
12:48
Speaker 1: about the use of technology today versus when we started.
12:50
Speaker 1: When I started and I was covering Latin America, not
12:53
Speaker 1: only did I have to finish my model, but I
12:55
Speaker 1: actually had to face it to the client overnight and
12:58
Speaker 1: it would cut off at least ten times. I had
13:00
Speaker 1: at least another hour or two in my schedule at
13:02
Speaker 1: the office to fax it. And because a two clock,
13:05
Speaker 1: three o'clock in the morning, Who's gonna do that for you?
13:07
Speaker 1: When you think about what BlackBerry did for us and
13:10
Speaker 1: now iPhones, where I can be anywhere and responding to
13:13
Speaker 1: what I need, I think it gave people a lot
13:14
Speaker 1: more flexibility. And I think that, along with some of
13:18
Speaker 1: the technology, just even the way those companies have operated
13:21
Speaker 1: has even made our industry much more fluid. I mean,
13:25
Speaker 1: we're on the radio, but you see I'm in a
13:27
Speaker 1: bright blue dress today with boots. When I started at
13:30
Speaker 1: JP Morgan, I never would have worn anything like this
13:34
Speaker 1: because colorful in boots or dude suits. Women didn't wear
13:42
Speaker 1: pants really gerald shoes and a blazer, and years ago
13:49
Speaker 1: that was unthinkable. Also, I think that's I and I
13:52
Speaker 1: think that's somewhat superficial, But I think it manifests itself
13:55
Speaker 1: in terms of our openness to who is in the
13:58
Speaker 1: who is in the organization, women moving along. I think
14:01
Speaker 1: that's all part of the same. There's much more opportunity
14:04
Speaker 1: to express your personality in our industry than there was
14:08
Speaker 1: when I started. You know, you mentioned technology, how much
14:11
Speaker 1: doesn't make a difference that so much communication is being
14:15
Speaker 1: done by email or instant message. We're big slack users.
14:19
Speaker 1: So who's on the other side of the communication You
14:22
Speaker 1: may not even know their gender, or their race or
14:24
Speaker 1: anything else like that. Does that technology change make a
14:28
Speaker 1: difference or is it It's already adopted and pass that.
14:32
Speaker 1: I think it's adopted. I guess what I would say
14:34
Speaker 1: about technologies. I love the flexibility it it affords us.
14:39
Speaker 1: I don't love that so much is done on chat
14:42
Speaker 1: and on email, honestly, because I do think and you
14:46
Speaker 1: I'm sure you've seen this, somebody can misinterpret an email
14:49
Speaker 1: that you very easily, very easily written word to There's
14:53
Speaker 1: also less of a self editing process. I've worked with
14:57
Speaker 1: people in the past who I've seen since horrific emails
15:02
Speaker 1: that had they turned it into a formal memo, it
15:05
Speaker 1: never would have No one would hit that send button.
15:07
Speaker 1: It would be there'd be a little more circumspection about
15:10
Speaker 1: it rather than blah blah blah sends. And and that's
15:14
Speaker 1: the problem with two instant communication or pick up the
15:16
Speaker 1: phone call and and so when I shifted, you know,
15:19
Speaker 1: everybody in ours to use blackberries, and we were all
15:21
Speaker 1: really good with our thumbs typing with blackberries, and we've
15:24
Speaker 1: now shifted to iPhones. There are a good group of
15:27
Speaker 1: people that still like the BlackBerry. But I made the
15:29
Speaker 1: shift to iPhones even though I'm not very good at
15:32
Speaker 1: typing on it, because I figured shorter emails are better
15:34
Speaker 1: and I'm much more likely to just pick up the
15:36
Speaker 1: phone and call a person instead of drafting an email.
15:38
Speaker 1: It's a little bit more of a pain for me
15:39
Speaker 1: to do it on an iPhone. I think that's a
15:41
Speaker 1: good thing. I'm Barry Ridhults. You're listening to Masters in
15:44
Speaker 1: Business on Bloomberg Radio. My guest today is Kelly Coffee.
15:48
Speaker 1: She is chief executive officer of JP Morgan Private Bank,
15:53
Speaker 1: part of JP Morgan Chase, which runs the private bank
15:56
Speaker 1: runs over six d and fifty billion dollars in client assets.
16:02
Speaker 1: You were at JP Morgan during the eighth nine collapse.
16:06
Speaker 1: That had to be quite a interesting couple of months.
16:10
Speaker 1: What was it like at the back front row seat? Yes,
16:14
Speaker 1: it was interesting is a good way to say it.
16:16
Speaker 1: I think it was like always, it was always being
16:20
Speaker 1: tense and on and kind of ready for the next
16:22
Speaker 1: punch and where it was going to come from. I
16:24
Speaker 1: think one of my most vivid memories. I have a
16:26
Speaker 1: lot of vivid memories. One of my most vivid memories
16:28
Speaker 1: is the fact that you would walk onto our trading
16:30
Speaker 1: floor on a Saturday or Sunday and it looked exactly
16:33
Speaker 1: like it did Monday through Friday. Really, why was that?
16:35
Speaker 1: Because you don't know what was happening the weekend, and
16:38
Speaker 1: you know, I remember, you know the night that the
16:40
Speaker 1: weekend that we bought bear Sterns, you know, having that
16:43
Speaker 1: that conversation on Sunday night, like I need everybody in
16:45
Speaker 1: a six am, We're going We ran their risk. From
16:48
Speaker 1: day one, I had to walk into the building and
16:50
Speaker 1: figure out who worked for me and what they were doing,
16:52
Speaker 1: and make sure I was running derivatives marketing. Then make
16:55
Speaker 1: sure that no trade was put on around Wound without
16:58
Speaker 1: my approval. And it was it was moving quickly, and
17:01
Speaker 1: then the weekend Lehman failed. When when that was happening,
17:04
Speaker 1: it was it was extraordinary complex because not only you know,
17:07
Speaker 1: we have collateral posted to one another, so you knew
17:09
Speaker 1: what that was, but you had to actually think about
17:11
Speaker 1: what was going to happen in the markets and how
17:12
Speaker 1: that impacted your derivatives position and therefore what trades you
17:15
Speaker 1: might have to do when the market opened, and and
17:19
Speaker 1: you were just constantly running scenarios to make sure we
17:21
Speaker 1: were ready for that. It was extraordinary, it really, it
17:24
Speaker 1: really was. There was a lot of second level thinking
17:26
Speaker 1: where it's not here's what's going to happen now, how
17:28
Speaker 1: it's going to affect other things that might be based
17:30
Speaker 1: on something else, and at a certain point that decision
17:33
Speaker 1: tree becomes completely unmanageable. But just for the next morning,
17:37
Speaker 1: you had at least have a sense of what was
17:39
Speaker 1: going on. Clients were looking to us for a lot
17:41
Speaker 1: of advice on what was going on in the market,
17:43
Speaker 1: so you were really trying to take it all in
17:44
Speaker 1: and and it really was scenario analysis. The the takeover
17:48
Speaker 1: of Bear Sterns happened fairly rapidly, and Bear wasn't in
17:53
Speaker 1: terrible um shape, and if I recall correctly, you JP
17:58
Speaker 1: Morgan was the big his counterparty to Bear, so you
18:01
Speaker 1: really understood their book better than anybody else, well as
18:04
Speaker 1: well as you can from the outside. I guess it
18:06
Speaker 1: was very quick. It was a Thursday night to Sunday
18:08
Speaker 1: night announcement. That's what A twenty nine billion dollar take
18:11
Speaker 1: over something along those lines. Huge. And the other thing
18:13
Speaker 1: I think that was extraordinary about it because Jamie has
18:15
Speaker 1: told the story I know a number of times where
18:18
Speaker 1: you know he got that diamond Jamie Diamond, right, Okay,
18:22
Speaker 1: he had that call Thursday night. It was his birthday
18:25
Speaker 1: dinner and Uma hearing about that and uh it was
18:29
Speaker 1: all Schwarts that called him and said we have an issue.
18:32
Speaker 1: And he called, you know, the head of our investment
18:34
Speaker 1: in A couple of people. People got out. It was
18:36
Speaker 1: eleven o'clock. People got best back into the office right
18:41
Speaker 1: over to Bear Sterns to figure out and they worked
18:42
Speaker 1: all night to make sure Bear could open the next
18:45
Speaker 1: day and then through the weekend to see what we
18:47
Speaker 1: could do for longer term. It was I think what
18:49
Speaker 1: the I'm not sure how many other institutions, if there's
18:52
Speaker 1: any other institution, could have pilled that off terms of
18:54
Speaker 1: the amount of analysis that we had to do to
18:56
Speaker 1: be able to step in and run that right from Monday,
18:59
Speaker 1: I was incredibly proud of everybody. It was a tough time,
19:01
Speaker 1: but exciting in a way too. At the time, I
19:04
Speaker 1: was critical of the deal from the FED perspective, but
19:09
Speaker 1: objectively looking at it from a corporate perspective, I thought
19:13
Speaker 1: Jamie Diamond pulled off one of the greatest acquisitions of
19:16
Speaker 1: all time, essentially with his little risk as humanly possible
19:20
Speaker 1: for that much of that size, large risky bank, with
19:24
Speaker 1: the FED banking backing it up, and or eventually all
19:28
Speaker 1: but yeah, but when you look at all the main
19:30
Speaker 1: lane one, two, and three that were unwound, these were
19:33
Speaker 1: the derivative positions of of Bear at the time. It
19:37
Speaker 1: really was fairly break even that that unwind wasn't wasn't horrific.
19:42
Speaker 1: And I think people from the outside we're looking and saying,
19:44
Speaker 1: oh my god, this is potentially tens of billions of dollars.
19:48
Speaker 1: It was essentially flat by the time they were done.
19:50
Speaker 1: I don't know. I think I think if you go
19:52
Speaker 1: back and you factor in all the fines that we've
19:54
Speaker 1: paid as a result of that acquisition. You trace a
19:57
Speaker 1: lot of the fines back to that acquisition, particularly in
20:00
Speaker 1: the mortgage space um and they were second, they were
20:04
Speaker 1: the second largest mortgage and interesting that nobody was able
20:11
Speaker 1: to do the same thing with Lehman Brothers. I know, well, yeah,
20:14
Speaker 1: that really was interesting. I didn't think at the time
20:17
Speaker 1: that they were going to let that go, but it
20:18
Speaker 1: became apparent. I remember that weekend very well, series of
20:21
Speaker 1: conference calls. I think one of the things that made
20:23
Speaker 1: JP Morgan able to react so quickly in the crisis
20:27
Speaker 1: was the fact that we had the risk infrastructure already
20:31
Speaker 1: set up. You know, Jamie also likes to say, you
20:33
Speaker 1: don't you don't declare war and then raise your army.
20:35
Speaker 1: You get your army first, and so we had risk
20:37
Speaker 1: meetings that we were doing that were this regular weekly
20:40
Speaker 1: meetings all the time, and during the crisis, what we
20:44
Speaker 1: did is we were just having them maybe four or
20:46
Speaker 1: five times a day. So it was that same infrastructure,
20:48
Speaker 1: but just shortening so that that reporting was instantaneous up
20:52
Speaker 1: and down in terms of understanding what was going on
20:55
Speaker 1: around around the world and in the crisis, it was
20:58
Speaker 1: it was a pretty incredible thing to say, and you
21:02
Speaker 1: ended up with a fantastic building. We did really happy about. Yeah,
21:06
Speaker 1: that's one of the nicest new buildings. The bear Stearns
21:09
Speaker 1: building right next door to us, right, so our headquarters
21:11
Speaker 1: right in the corner. You're on Park and between forty
21:16
Speaker 1: and forty seven and this is seven and Vanderbilts literally
21:20
Speaker 1: in the corner. I'm Barry Ridhults. You're listening to Masters
21:23
Speaker 1: in Business on Bloomberg Radio. My special guest today is
21:26
Speaker 1: Kelly Coffee. She is the CEO at JP Morgan Private Bank,
21:32
Speaker 1: which manages six hundred and fifty plus billion dollars. Let's
21:36
Speaker 1: talk a little bit about investing today. Uh, what are
21:40
Speaker 1: some of the more common questions that the bank is
21:43
Speaker 1: hearing from investors? You know, investors are It's a it's
21:48
Speaker 1: a complicated world out there. You have what's going on
21:50
Speaker 1: in China, what's going on in Europe. You have negative
21:53
Speaker 1: rates in certain places. You have the elect US election
21:55
Speaker 1: going on, you have you know, the FED having moved
21:58
Speaker 1: in December and unclear what's going to happen for the
22:01
Speaker 1: rest of the year. So they're asking all of those questions,
22:04
Speaker 1: and they're asking them in terms of what does this
22:06
Speaker 1: mean for you know, for my portfolio, what I should do.
22:10
Speaker 1: I think our job as investors, the most important thing
22:13
Speaker 1: to do is to stay invested. And if you look
22:17
Speaker 1: at if you look at the performance of clients who
22:19
Speaker 1: stay invested through market volatility. Again, this is money that
22:23
Speaker 1: is for the long term. They do far better than
22:26
Speaker 1: trying to time the market to go in and out.
22:27
Speaker 1: Even just a simple if you look at the return
22:29
Speaker 1: of the SMP over the last twenty years called eight percent,
22:33
Speaker 1: So if you invested about ten thousand dollars you'd have today,
22:36
Speaker 1: you know, for eight thousand dollars at the end of
22:38
Speaker 1: last year, if you missed the top ten days, your
22:42
Speaker 1: investments have that amount. Nobody knows how to time that
22:46
Speaker 1: market exactly right. If you miss, if you miss the
22:49
Speaker 1: top thirty days, you're you're negative. That's amazing. You know that.
22:52
Speaker 1: We've run some studies on that, and it turns out
22:55
Speaker 1: that the best ten days are usually adjacent in time
22:59
Speaker 1: to of the worst ten days. So if you think
23:02
Speaker 1: you're going to get out of the way, you perhaps
23:05
Speaker 1: you can, but then to get back in the next
23:07
Speaker 1: day when it comes snapping back that people don't do things.
23:10
Speaker 1: It's really hard. So I think what we can we
23:14
Speaker 1: try we take all of what's going on in the
23:16
Speaker 1: world and try to understand what we think it means
23:18
Speaker 1: for portfolios. I think it just proves that being diversified
23:21
Speaker 1: is the best way to invest for the long term.
23:24
Speaker 1: And and so those are those are the those are
23:26
Speaker 1: the types of questions we're getting. Are you Are you
23:28
Speaker 1: getting similar questions today as to what you got a
23:31
Speaker 1: year ago, two years ago, three years ago? And how
23:34
Speaker 1: do those questions differ from what we might have heard
23:37
Speaker 1: in the two thousand's pre crisis. I think if I
23:40
Speaker 1: think about today versus a year or so ago, I
23:43
Speaker 1: think the concern about a recession is higher today than
23:46
Speaker 1: it was then, so more more concerned about that. And
23:50
Speaker 1: then I and then obviously the politics, the political situation
23:55
Speaker 1: this year. Yeah, I think the election is coming. I
23:57
Speaker 1: think that's that's let me ask you differently because what
24:01
Speaker 1: I'm hearing from you aside there are a lot of
24:03
Speaker 1: topical things, but it seems like there are, Oh there's
24:07
Speaker 1: always something that clients nervously ask about that. Your basic
24:13
Speaker 1: answer is always, Hey, you need to write out the
24:15
Speaker 1: volatility for the long haul, and don't worry about last
24:18
Speaker 1: year was China? The year before do you remember the
24:22
Speaker 1: Russian invasion? Oh? No, Cyprus, What is this gonna Cause
24:26
Speaker 1: it seems every year there's something horrific, and every year
24:30
Speaker 1: goes by and it's not the disaster people forking. I
24:32
Speaker 1: think that's exactly right. I think what people have there's
24:35
Speaker 1: always going to be uncertainty in the world, and if
24:37
Speaker 1: and if you try to wait until it's all certain,
24:40
Speaker 1: I don't think you'll ever get to that place. And
24:42
Speaker 1: even when it feels more certain, you're probably too late.
24:44
Speaker 1: It's probably not the best entry point. Anyway. Market's pretty
24:47
Speaker 1: good at discounting these things in advance. They are, and
24:49
Speaker 1: I think you know, you say people at the equity market,
24:51
Speaker 1: oh it's made, it's made a big run. We do
24:54
Speaker 1: tell clients when we're getting someone invested. It depends on
24:56
Speaker 1: where they're sitting today, right, But if they're starting from zero,
24:59
Speaker 1: we don't do that all in one day or a month.
25:01
Speaker 1: We we like to phase into that because I think
25:03
Speaker 1: over time that gives them the best return. But there's
25:07
Speaker 1: always going to be But there are times where that
25:10
Speaker 1: entry point just looks particularly attractive, and they tend to
25:13
Speaker 1: be the scariest times to invest. And that's when you
25:16
Speaker 1: have to have the long term and just be able
25:19
Speaker 1: to say, you know, history is a guide, We're going
25:21
Speaker 1: to be fine through all of this, and and and
25:24
Speaker 1: it's it's one of the most important lessons in investing,
25:26
Speaker 1: I think. So let's let's take it in a different direction.
25:29
Speaker 1: What do you what do you think are some of
25:31
Speaker 1: the worst investing ideas that are out there these days? Again,
25:36
Speaker 1: I got the worst investing idea is to not be invested.
25:38
Speaker 1: I mean that that is sort of the base of
25:41
Speaker 1: what we're doing. To be not very diversified. It probably
25:46
Speaker 1: the other when I would say to be to be concentrated.
25:49
Speaker 1: There are times to be concentrated, and there might be
25:51
Speaker 1: parts of your wealth to be concentrated in, but overall
25:54
Speaker 1: to be too concentrated in in one asset class or
25:57
Speaker 1: one style I think is a mistake. Any thoughts on
26:00
Speaker 1: smart Beta, Yeah, I think smart Bida is interesting as
26:04
Speaker 1: a way to to to think about how do you
26:07
Speaker 1: take advantage of some of the um the idist and
26:13
Speaker 1: parts of the indices or sort of opportunities exist because
26:16
Speaker 1: of of miss pricing. Um. You know, when we look
26:19
Speaker 1: at it, when we look at a portfolio, we are
26:21
Speaker 1: looking at at it broadly, and I want there to
26:24
Speaker 1: be a part that is the most efficient way to
26:27
Speaker 1: capture BETA. Sometimes that's passive, right, a lot of times
26:31
Speaker 1: that's passive UM. And then think about where are those
26:34
Speaker 1: parts of what you're investing in that you really need
26:38
Speaker 1: uh differentiated advice or or or strong management to capture UM.
26:44
Speaker 1: So emerging markets might be one of those where there's
26:46
Speaker 1: just a broader variance of performance UM certainly private equity
26:52
Speaker 1: for that portion of your portfolio. So that's the way
26:55
Speaker 1: I think about it. Do you what do you guys
26:57
Speaker 1: do in terms of alternatives or for UM clients, Because
27:02
Speaker 1: we were talking fairly long term broad asset allocation, investing,
27:08
Speaker 1: venture capital, private equity, hedge funds. We have a very
27:12
Speaker 1: robust platform for that and and what we and and
27:14
Speaker 1: it all starts with our view on what's going on
27:17
Speaker 1: in the world. So we may say, you know, UM,
27:20
Speaker 1: we we have a certain view on what's going on
27:22
Speaker 1: in real estate, and then we'll figure out what we
27:24
Speaker 1: think the best way and who the best is to
27:26
Speaker 1: invest on that. UM same thing in terms of something
27:29
Speaker 1: that might be happening in Europe that we want to
27:31
Speaker 1: take advantage of and then have the so it is
27:33
Speaker 1: theme based. We don't take the approach of saying you
27:36
Speaker 1: should have x percent of your portfolio and private equity, therefore,
27:39
Speaker 1: let's just fill that bucket. It actually really is more
27:42
Speaker 1: of an investing view and that that is a great
27:45
Speaker 1: vehicle to do so, particularly when you have the time
27:48
Speaker 1: horizons that a lot of our clients have. So it's
27:50
Speaker 1: a really important part of how we invest for clients.
27:52
Speaker 1: So I've been reading how overvalued the US market is
27:56
Speaker 1: for I don't know, four or five years. Eventually they'll
27:58
Speaker 1: get it right, But um, what do you think about
28:01
Speaker 1: current market valuations in the US and Europe and any emergition.
28:05
Speaker 1: You know, it's so interesting how people always zero in
28:07
Speaker 1: on the US market as it overvalues undervalued. I do
28:10
Speaker 1: think it's about fairly valued right now, particularly if you
28:12
Speaker 1: look versus history. But when you stop and just think
28:16
Speaker 1: about what the stock market is, it's a collection of
28:19
Speaker 1: companies that hopefully their earnings are always growing. So even
28:22
Speaker 1: a fairly valued market should appreciate over time. The stock
28:26
Speaker 1: market spend at all times highs many many times throughout history,
28:31
Speaker 1: and when you think about it, because it's always gone up,
28:32
Speaker 1: up up, and there are moments and periods of where
28:35
Speaker 1: it comes down. So it really does again come down
28:38
Speaker 1: to your your time horizon in your perspective. But I
28:41
Speaker 1: think the overall index level probably fairly valued, not that interesting.
28:47
Speaker 1: The parts of the market that I think are more
28:48
Speaker 1: interesting are really more sectors where we see there there's
28:53
Speaker 1: an interesting trend going on, or they may be at
28:55
Speaker 1: a discount to where their historical values have been. So
28:58
Speaker 1: healthcare and technology you are probably two within that that.
29:02
Speaker 1: I so, I think you've got interesting or inexpensive, as
29:06
Speaker 1: interesting and less expensive than they have been in the
29:09
Speaker 1: in in the past. What about the energy sector which
29:12
Speaker 1: has gotten shell lacked over the past couple of years
29:14
Speaker 1: and talk about wanting to buy stuff when everybody else
29:17
Speaker 1: hates it. What do you think? What are you guys
29:19
Speaker 1: looking at that sector? Look carefully at that. I think
29:22
Speaker 1: there's a little bit more to play out there, but
29:24
Speaker 1: the entry point to that will will be a bit
29:27
Speaker 1: more in the fixed income side than the equity side.
29:29
Speaker 1: So for us, you know, here we are with six
29:32
Speaker 1: years into a bull market. We're having a conversation about
29:35
Speaker 1: valuation and this and that, and I hear no euphoria.
29:39
Speaker 1: There's still a decent amount of skepticism out there. What
29:43
Speaker 1: what does that mean about the market and why we're
29:48
Speaker 1: now at at or near all time highs. Where is
29:51
Speaker 1: the euphoria this? I think when you go back and
29:56
Speaker 1: just remember what two thousand and eight was like, and
29:58
Speaker 1: then you think about what happened since, it's been a
30:02
Speaker 1: slower grind in terms of what the economy has even done.
30:05
Speaker 1: And I think that weighs into people's sentiment today, right
30:08
Speaker 1: that that was not that long ago and it was
30:10
Speaker 1: so difficult that it really does weigh on people to
30:14
Speaker 1: it stays in investors minds quite some post traumatics, I
30:19
Speaker 1: crash disorder. I think we have a lot of clients
30:22
Speaker 1: um and we have a lot of investors who will
30:24
Speaker 1: just hold a higher level of cash than they had
30:26
Speaker 1: in the past just because of that. And and that's fine,
30:29
Speaker 1: but it it It certainly is a conscious decision, and
30:32
Speaker 1: that's going to be a drag on their return. That
30:33
Speaker 1: will be a bit of drag, yes, because you know,
30:36
Speaker 1: I mean, you have I don't know, something like eleven billion,
30:39
Speaker 1: eleven trillion dollars that are earning nothing or negative yield
30:42
Speaker 1: in terms of the the overall market. Just look at
30:46
Speaker 1: look at where we are. We're at zero to negative
30:49
Speaker 1: yields right now, so that is a big drag. But people,
30:52
Speaker 1: let's think about as people are are are concerned. It's
30:54
Speaker 1: almost like an insurance policy. I'm concerned, so I want
30:56
Speaker 1: to keep that. UM. I do think that you know
31:00
Speaker 1: whether you're keeping too much or not. It has to
31:02
Speaker 1: be answered on an individual level. UM. But I think
31:05
Speaker 1: we talked about earlier, all of the uncertainties that we
31:08
Speaker 1: have in the world is dragging on this and that's
31:10
Speaker 1: why it's not a euphordia. If you if you look
31:12
Speaker 1: about at the amount of liquidity that's put into the
31:16
Speaker 1: world market and the central banks around the globe, the
31:19
Speaker 1: FED is the only one that's starting to say we
31:21
Speaker 1: should normalize a bit. And twenty five basis points was
31:24
Speaker 1: really nothing. It really doesn't mean anything to anyone, UM,
31:27
Speaker 1: But just that start has spooked the market. So I
31:30
Speaker 1: think we are We're at a point where it's kind
31:32
Speaker 1: of on precedent, and I don't think we should expect
31:34
Speaker 1: to see a euphoria like we've seen in the past,
31:37
Speaker 1: because the size of what's gone on and what's gone
31:39
Speaker 1: on around the world is such that it is it
31:43
Speaker 1: is putting a bit of a dampen heer. We've been
31:45
Speaker 1: speaking with Kelly Coffee. She is the chief executive officer
31:49
Speaker 1: of JP Morgan Private Bank. If you've enjoyed this conversation,
31:53
Speaker 1: be sure and stick around for our podcast extras, where
31:56
Speaker 1: we keep the tape rolling and continue chatting. You can
32:00
Speaker 1: check out my daily column on Bloomberg View dot com
32:04
Speaker 1: or follow me on Twitter at rid Halts. I'm Barry
32:07
Speaker 1: rid Halts. You're listening to Masters in Business on Bloomberg Radio.
32:12
Speaker 1: Welcome to the podcast Extras. I don't know why I
32:14
Speaker 1: do this every week, but I do. Kelly, thank you
32:16
Speaker 1: so much for doing this. This is uh, it was
32:18
Speaker 1: really fun. I have some of my favorite questions. I
32:23
Speaker 1: only have you for another twenty minutes or so. There's
32:26
Speaker 1: a ton of stuff that I didn't get to, and
32:32
Speaker 1: I'm just going through my papers and seeing what else. Yeah,
32:36
Speaker 1: everything else is, uh, everything else is is pretty standard.
32:40
Speaker 1: So so let me just go through, um, some of
32:44
Speaker 1: my usual favorite questions. Your background. Did you go right
32:49
Speaker 1: from school to JP Morgan started on this? Basically, you
32:52
Speaker 1: found your way into finance and pretty much never left
32:55
Speaker 1: and never left, never went back for the n It
32:58
Speaker 1: was just always so fun yeah, I because I've done
33:00
Speaker 1: a lot of different jobs within JP Morgan, and every
33:03
Speaker 1: single one of them has been fascinating, challenging and interesting.
33:08
Speaker 1: And I've always felt like everything that was happening in
33:10
Speaker 1: the world impacted my day and it was interesting, which
33:13
Speaker 1: is what I ultimately that's the best part about working
33:15
Speaker 1: in finances. No two days are ever alike. If you
33:18
Speaker 1: are in a rut and finance you're doing something wrong
33:21
Speaker 1: because it's always different. There's always something blowing up someway.
33:25
Speaker 1: Just open your eyes. That's right, the paper every morning.
33:28
Speaker 1: We're connected to everything that's going on there. I love that,
33:30
Speaker 1: and that really keeps it really keeps it interesting. So
33:35
Speaker 1: this is a really naive question. What does the CEO
33:39
Speaker 1: of a private bank actually do? That's a really great question.
33:45
Speaker 1: I'm responsible for everything that touches a client, sort of
33:48
Speaker 1: the end to end business, and so so the advisors,
33:51
Speaker 1: the portfolios, the marketing board, across the board, strategy. I
33:56
Speaker 1: have a lot of partners on the table to help
33:57
Speaker 1: me do that. Across products investing, I have don't do
34:00
Speaker 1: that by any stretch on my own, but so there's
34:02
Speaker 1: there is a lot of different parts of my job.
34:05
Speaker 1: I try to spend a good chunk of my time
34:08
Speaker 1: somewhere around uh thirty or forty plus percent with clients.
34:13
Speaker 1: If I could get that higher, I would. I always
34:14
Speaker 1: try as I get more efficient and things done, because
34:17
Speaker 1: when I'm with clients, I'm I'm learning from them, I'm
34:20
Speaker 1: hearing how we're doing. I'm also seeing my team in
34:22
Speaker 1: action and spending time with them. So I find that's
34:25
Speaker 1: a really good way to touch people and to stay
34:27
Speaker 1: really attuned to what's going on. I have to spend
34:29
Speaker 1: a good portion of my time. You know, we've had
34:31
Speaker 1: a lot change on the last over the last couple
34:34
Speaker 1: of years UM in terms of the way we have
34:36
Speaker 1: to do things, and so we have a lot to
34:37
Speaker 1: do to make sure UM our client experience is excellent.
34:41
Speaker 1: We're very efficient at doing everything. So I spent a
34:43
Speaker 1: good chunk of my time on improving the business UM
34:47
Speaker 1: and how many different divisions or different department chiefs are
34:52
Speaker 1: directly answering to you. I have about fifteen direct reports
34:56
Speaker 1: if you look at what we're organized regionally around the US,
35:01
Speaker 1: so that is the regional sort of client facing folk
35:04
Speaker 1: that directly report. And then I have the what might
35:07
Speaker 1: be a more matrix but sort of all of the operations, technology, business, finance, etcetera.
35:13
Speaker 1: That is that is also really much part of my table.
35:16
Speaker 1: Let's say as we do that, so folks, etcetera. You
35:20
Speaker 1: mentioned how things have changed over the past couple of years.
35:23
Speaker 1: How have you guys had to adapt to Well, well,
35:26
Speaker 1: here we are in the post crisis world or in
35:29
Speaker 1: the post dot frank world. How has the compliance side
35:33
Speaker 1: of this changed either your your daily operations or is
35:38
Speaker 1: it just another thing to deal with? It's changed, It's
35:41
Speaker 1: changed everything. It's changed our daily the way we on
35:45
Speaker 1: board a client, a new client, the way we interact
35:47
Speaker 1: with every client. That when you think about doing a
35:49
Speaker 1: mortgage towards bringing a new client in, we've we've had
35:53
Speaker 1: to make sure we're complying not only with pretty complex regulations,
35:57
Speaker 1: but a a different standard um in terms of the
36:00
Speaker 1: level of questions and the level of monitoring that we
36:03
Speaker 1: have to do. So we've we did all of that
36:05
Speaker 1: really quickly. And I think that if you ask me
36:07
Speaker 1: what the biggest I think the biggest factor for change
36:10
Speaker 1: will be going forward is similar to what it's been
36:12
Speaker 1: in the past in terms of technology, but I think
36:14
Speaker 1: at a much faster pace because we need to make
36:17
Speaker 1: sure we're interacting with our clients digitally more efficiently. You know,
36:21
Speaker 1: their expectations of us aren't measured versus other financial institutions.
36:25
Speaker 1: Their measured versus how they how they interacting with Amazon
36:27
Speaker 1: and Google and Apple, and we need to make sure
36:30
Speaker 1: we're we're staying pace with that. You want to be
36:33
Speaker 1: a technology play or not just to find it. So
36:35
Speaker 1: let's talk a little bit about fintech. What do you
36:38
Speaker 1: guys think about all the new technological innovations, whether it's
36:42
Speaker 1: the ability to analyze the portfolio and generate a risk score,
36:47
Speaker 1: or the robo advisors or anything along those lines. How
36:50
Speaker 1: has financial technology changed the way JP Morgan operates. We
36:54
Speaker 1: we we are critically, We're really focused on it's critical
36:58
Speaker 1: change a lot of what we do. How you think
37:00
Speaker 1: about well, first of all, not only how you interact
37:02
Speaker 1: with your clients right, making sure they can see our
37:05
Speaker 1: thought leadership on their phone, they can move money on
37:08
Speaker 1: their phone, everything that everybody does with these with these
37:10
Speaker 1: little devices they care in their pocket. We're changing that. Um,
37:14
Speaker 1: we're the bank, So let me just like bank JP Morgan, Bank,
37:19
Speaker 1: JP Morgan Chase actual depository bank. I mentioned we were
37:24
Speaker 1: talking earlier about the mobile Bloomberg Gap, which I think
37:27
Speaker 1: is awesome. Your mobile bank app, which I use, is great.
37:32
Speaker 1: You could you could move money around, you could pay bills,
37:35
Speaker 1: you can do different things. It's really like a full
37:38
Speaker 1: computer on your iPhone, which is really impressive. And we're
37:42
Speaker 1: working every single day to improve it. And so that
37:44
Speaker 1: that's one of the benefits I have. When you sit
37:45
Speaker 1: at the private bank, I'm part of this huge organization
37:48
Speaker 1: that covers you know, we interact with at least half
37:51
Speaker 1: of the consumers in the US. Silly everything we do.
37:56
Speaker 1: What what I do is I just take it and
37:58
Speaker 1: adapt it for certain clients segment, whether it's the private
38:01
Speaker 1: bank or another part. And that's so it's changing everything
38:03
Speaker 1: we do how I look at how I'm looking at
38:06
Speaker 1: data in terms of giving clients advice. You know, we
38:09
Speaker 1: have a big data team at JP Morran. That's fabulous.
38:11
Speaker 1: How we think about who our next clients should be.
38:15
Speaker 1: It's it's uh, it's changing every day. Huh. It's um
38:20
Speaker 1: and it's fun. Full disclosure. We we bank with you,
38:24
Speaker 1: My wife as an account with you guys, so we
38:26
Speaker 1: were in the household for that. Our corporate account is
38:29
Speaker 1: also there. We found that your ability to do a
38:34
Speaker 1: H S and other things, the interface was just very
38:38
Speaker 1: ahead of everything else. We we looked at a bunch
38:40
Speaker 1: of banks and you guys were just heading shoulders above that.
38:43
Speaker 1: But that is not an official endorsement. I just wanted
38:45
Speaker 1: to disclose because someone's gonna say, hey, don't you bank
38:48
Speaker 1: with those guys. Yeah, they're not waving my monthly fee.
38:50
Speaker 1: Because if you look at everything, right, if you will,
38:53
Speaker 1: thank you for your business first of all, um, but
38:55
Speaker 1: if you look at all the money we move. We've
38:57
Speaker 1: said this publicly, it's somewhere between five and ten million
39:00
Speaker 1: dollars a day. That day. That's insane, five to ten
39:03
Speaker 1: trillion dollars a day. So let's one of the questions
39:07
Speaker 1: I asked earlier was about some of your mentors, um,
39:10
Speaker 1: but let's talk take this uh in general about mentors
39:14
Speaker 1: for women. But who were some of your early mentors
39:17
Speaker 1: in the world to find it. I've been lucky to
39:19
Speaker 1: have a lot of great mentors. Probably what I would
39:21
Speaker 1: consider one of my first mentors, it might be a
39:22
Speaker 1: strange way to call him, was my grandfather, who ran
39:25
Speaker 1: a bank in Pennsylvania, and he passed away. So you're
39:29
Speaker 1: from a banking fan, banking family, you could say, a
39:32
Speaker 1: small hometown bank, the old Forge Bank, and and he
39:37
Speaker 1: was pretty incredible. And so when I went into finance,
39:39
Speaker 1: and and I worked for him in the summers when
39:41
Speaker 1: I was in high school and and did a couple
39:43
Speaker 1: other things too. But you know, it was it was
39:45
Speaker 1: a really great relationship because it's it's someone you could,
39:48
Speaker 1: you know, you could talk to about everything, including you know,
39:51
Speaker 1: at the time, what we thought Greenspan was going to
39:53
Speaker 1: do next on the FED. I mean, it was it
39:54
Speaker 1: was a really close relationship and I think, um that
39:56
Speaker 1: formed a lot of a lot of who I am.
39:59
Speaker 1: And then when I came into the business, I've had
40:01
Speaker 1: some pretty you know, pretty amazing uh people that I've
40:05
Speaker 1: worked with that have just given me good advice as
40:08
Speaker 1: different points in time. I think, I think JP Morgan
40:11
Speaker 1: is a place where it's not too often where you're
40:13
Speaker 1: you're a couple. I might have been just for the
40:15
Speaker 1: training program month out when they tapped me in the
40:17
Speaker 1: shoulder and sent me down to Bueno Side's to work
40:19
Speaker 1: in Argentina, uh to to do project there and then
40:22
Speaker 1: asked me to move a year or two later, and
40:25
Speaker 1: and you know, there's been a lot of either, you know,
40:28
Speaker 1: and it cuts across the levels. I have mentors that
40:31
Speaker 1: are more junior and more senior that I looked to
40:34
Speaker 1: and I learned from all the time. They tapped you
40:36
Speaker 1: right out of the training program to go to South,
40:40
Speaker 1: so they obviously saw a little skill there. And I
40:42
Speaker 1: don't know. I think it was I spoke French. They
40:44
Speaker 1: sent me to Argentina. That's how much thought went into it.
40:47
Speaker 1: But it was. It was fabulous, and we went down.
40:49
Speaker 1: We were selling a company. We were selling a phone company.
40:52
Speaker 1: No well that we were buying the phone company in
40:54
Speaker 1: the north. But the first time I went down, we
40:55
Speaker 1: were selling a factory for European company and it was
40:58
Speaker 1: in the south of Argentina, a little place called Commodo Ladavia.
41:02
Speaker 1: And there were no women that lived in the town
41:04
Speaker 1: except for the women that served the lunch at the factory,
41:06
Speaker 1: and they didn't really live with the town. I think
41:07
Speaker 1: they they live far away. And they sent me down
41:10
Speaker 1: to two due diligence on it, which was pretty funny.
41:13
Speaker 1: I got a lot of lot of in the town. Um.
41:17
Speaker 1: What investors influenced your approach to thinking about private banking? Uh,
41:25
Speaker 1: A lot of investors have influenced my approach. I you know,
41:29
Speaker 1: all of the greats I and I love the simplicity
41:31
Speaker 1: of Buffett. I think, you know, us internally have some
41:34
Speaker 1: pretty extraordinary investors. Whether you you look at some of
41:37
Speaker 1: our ceios, like Mike Symbolist, who has been at jpmore
41:40
Speaker 1: in a long time. It just has a unique perspective
41:42
Speaker 1: on the world. Um. You know, we also on our
41:46
Speaker 1: platform have a number of the best managers in the world,
41:51
Speaker 1: and we have names any want to mention. I don't
41:53
Speaker 1: think I want to mention any names, but I think
41:56
Speaker 1: that we have them. You know, we spent a lot
41:57
Speaker 1: of time with them, and when they come in and
41:58
Speaker 1: think about and talk about what's going on in the
42:01
Speaker 1: world and what they do, I learned something from every
42:04
Speaker 1: single one of them. It's an incredible position to be in.
42:07
Speaker 1: How about books, What are some of your favorite books?
42:10
Speaker 1: And they could be fiction and nonfiction, investing related or
42:14
Speaker 1: non investing. That's a really hard question for me because
42:17
Speaker 1: I love to read, so I could give you a
42:19
Speaker 1: super super long list if you think about if I'm
42:22
Speaker 1: starting with fiction because that's fun because I do like
42:24
Speaker 1: mostly on vacation to to get into something that kind
42:27
Speaker 1: of takes my mind completely out of finance. I like
42:30
Speaker 1: books that take you to a different time period and
42:32
Speaker 1: then explore characters there. So if you think about one
42:34
Speaker 1: of my favorite series is ken Fall. It's a great
42:36
Speaker 1: writer and um he wrote Pillows of the Earth. But
42:39
Speaker 1: the you know, The Winters of the World, the Three,
42:41
Speaker 1: the trilogy that goes from World War One through World
42:43
Speaker 1: War Two. That's that's a favorite of mine. UM. And
42:47
Speaker 1: you know, I love Henry James Portrait of a Lady.
42:49
Speaker 1: That's again that period that kind of takes you back
42:52
Speaker 1: really interesting characters. And then I and then I like
42:54
Speaker 1: to read about a lot of business books, business or
42:58
Speaker 1: investing books. So there's a great book Hilary Bossity that's
43:00
Speaker 1: called Execution, Getting It Done. I think, you know a
43:03
Speaker 1: lot of what I have to do in my business
43:05
Speaker 1: is execute. And you know, even a great strategy poorly
43:09
Speaker 1: executed doesn't do anything. Um. I like Stephen Pinker, I
43:12
Speaker 1: like Malcol Gladwell, I like Adam Grant. So those are
43:15
Speaker 1: the types of things that I that I tend to read.
43:18
Speaker 1: I have Pinkered and Grant both queued up in the
43:21
Speaker 1: coming months. I'm excited. I just started Originals. I don't
43:25
Speaker 1: know if you just starting that one. That's just and
43:28
Speaker 1: Pinker has so many gratefulks don't even know where to
43:30
Speaker 1: begin exactly. But he's really a deep thinker and really
43:35
Speaker 1: an interesting interesting guy. Any finance books of mentioned of
43:39
Speaker 1: note that you want to mention um House of Morgan. Okay,
43:46
Speaker 1: that's about the history ji. No, Bill Cohen didn't write that.
43:50
Speaker 1: He wrote a new it was I can't remember who
43:52
Speaker 1: the author was. I can't remember right now because it's
43:54
Speaker 1: it stops probably in or two. It's it's actually it
44:00
Speaker 1: actually ends quite a while go. Bill wrote a newer one,
44:03
Speaker 1: and I actually I read some of his. I think
44:05
Speaker 1: they're good. My head of research just read the one
44:10
Speaker 1: of the more recent biographies of James pier what his name,
44:14
Speaker 1: Pierpont Morgan JP Morgan, the actual man, and said it
44:18
Speaker 1: was utterly rivening and he couldn't put it down. And
44:20
Speaker 1: the biography Steve Jobs, his biography was was pretty incredible. Yeah.
44:24
Speaker 1: And the Graham there's a great one about her Washington Post.
44:28
Speaker 1: That's a really good one. The Right Brothers one everybody
44:30
Speaker 1: has been raving about on my bookshelf. I haven't gotten.
44:32
Speaker 1: I think you're making that into a movie too. Really,
44:35
Speaker 1: I thought I heard that everything. He's the author of
44:38
Speaker 1: that book who escapes Me at the moment? Who was
44:41
Speaker 1: the author that wrote I can't believe in forget his
44:43
Speaker 1: name right now. Barbarian's the Gate give me a and
44:46
Speaker 1: he wrote The Fastball. He's a Really I do read
44:49
Speaker 1: a lot of his too. It'll it'll come to me
44:53
Speaker 1: give me a minute. That's the problem with getting older names.
44:56
Speaker 1: Just I used to have these an go on and
45:00
Speaker 1: on and on. I get out my little kindle, app
45:01
Speaker 1: on my iPhone and it it just I'm constantly putting
45:04
Speaker 1: books on there that people recommend to me. You know,
45:06
Speaker 1: we have a summer reading list and a winter reading list,
45:09
Speaker 1: so we're now preparing for our summer reading list, which
45:11
Speaker 1: is not out yet. I put one out of this
45:13
Speaker 1: is what I hope to read this summer, and then
45:16
Speaker 1: we see how many I I actually get through that. Um,
45:19
Speaker 1: there's there's there's so many fascinating books. McCullough is the
45:24
Speaker 1: guy who wrote He's the Right Brothers and everything he's written,
45:28
Speaker 1: including was at Hamilton's. He may have written the Hamilton's
45:30
Speaker 1: book that became the basis of the play Um which
45:34
Speaker 1: is now Hamilton is incredible. All right, So we talked
45:38
Speaker 1: about the changes since you've joined the industry. Let's talk
45:42
Speaker 1: about the next shifts. You mentioned technology. What are some
45:46
Speaker 1: of the other major shifts that are coming to finance? Well,
45:50
Speaker 1: I I think technology. You mentioned fintech. I think that
45:53
Speaker 1: is the absolute biggest, biggest change because you have a
45:57
Speaker 1: lot of different companies that come into the space that
46:00
Speaker 1: are all doing the same thing in a way, They're
46:02
Speaker 1: all trying to solve a problem that finances. The financial
46:06
Speaker 1: industries is incredibly complex. We're regulated in a complex way.
46:09
Speaker 1: What we do is somewhat complex, and they're really good
46:11
Speaker 1: at figuring out what's that pain point, how do you
46:13
Speaker 1: solve it? How do you make a mortgage process easier?
46:17
Speaker 1: So you know what's what's you know going where you
46:19
Speaker 1: are in that process. One of the most highly regulated
46:21
Speaker 1: processes um in the world, I believe, and and so
46:26
Speaker 1: I think that's going to change the way we even
46:29
Speaker 1: we we we interact with our clients and the way
46:32
Speaker 1: we serve our clients and the way we think about it.
46:34
Speaker 1: And it's changing. Like I said before, everything we do.
46:37
Speaker 1: A lot of the analyzes we're doing inside to make
46:39
Speaker 1: you know, I think we we just need to have
46:42
Speaker 1: used technology to interpret data better so that we're spending
46:46
Speaker 1: our time. And when I say we, I mean a
46:48
Speaker 1: banker as someone who's who's talking to a client on
46:52
Speaker 1: interpreting and advising them, but making people smarter through their
46:57
Speaker 1: use of technology. And I think that's going to be, um,
47:01
Speaker 1: probably the biggest change to our industry, and we're working
47:04
Speaker 1: on it every day. So my we're down to our
47:06
Speaker 1: last two questions because I know they're coming to drag
47:09
Speaker 1: you away shortly. UM, So what sort of advice would
47:12
Speaker 1: you give to a millennial or a recent college grad
47:15
Speaker 1: who came to you and said, I'm thinking about going
47:18
Speaker 1: into finance. What would you tell them? I would say,
47:22
Speaker 1: take a chance and go for it. Make sure you
47:24
Speaker 1: love it. I think one of the things that's happened
47:26
Speaker 1: in our industry that's been good is through the crisis
47:29
Speaker 1: there was a fair shakeout, and I think there was
47:31
Speaker 1: a time when everybody gravitated toward finance because it was
47:34
Speaker 1: a thing to do. It was a way to make
47:36
Speaker 1: a lot of money if the money. I think that
47:39
Speaker 1: cohort has been sort of selected out. I think it's
47:41
Speaker 1: select it out. Rising title of sallship. I think it's
47:45
Speaker 1: a great thing, um, and I think it's better for
47:47
Speaker 1: those individuals they didn't love what they were doing. Those
47:49
Speaker 1: are the people, you know, if you're miserable doing this,
47:52
Speaker 1: that's kind of crazy because there's so much exciting things,
47:54
Speaker 1: so many things going on, and so I think we
47:57
Speaker 1: cleared that out, and so I would say, make sure
47:59
Speaker 1: you of it, um, and take some chances. I do
48:02
Speaker 1: find sometimes that are our younger UH employees or younger
48:08
Speaker 1: members of our team tend to be very, um, a
48:12
Speaker 1: little bit risk averse. You know, they're they're they're they're purposeful,
48:15
Speaker 1: so they're moving toward a purpose, maybe maybe more strongly
48:18
Speaker 1: than certainly I was. You know, I came in on
48:20
Speaker 1: intending to stay in the industry. I look to the
48:23
Speaker 1: next thing to make sure I would be learning, having fun,
48:26
Speaker 1: you know, working with people I liked. I didn't necessarily
48:28
Speaker 1: say I wanted to be the head of the private bank.
48:30
Speaker 1: I wanted to be this. They're more purposeful, which is good,
48:34
Speaker 1: but I think it makes them a little bit less
48:37
Speaker 1: willing to jump and move to Argentina, for example, or
48:41
Speaker 1: gives you the ability to pivot towards an opportunity that
48:43
Speaker 1: comes along as opposed to just being on the straight
48:45
Speaker 1: and arrow. Yeah, I don't don't have blinders on. I
48:47
Speaker 1: think that's really important. I think it's important to choose
48:50
Speaker 1: to work with someone you think you'll they'll learn from.
48:53
Speaker 1: Who you work for so important, it might even be
48:56
Speaker 1: more important than what you do. One of the most
48:58
Speaker 1: surprising things Arthur of It had said when we had
49:01
Speaker 1: him on the show was don't be afraid to pick
49:04
Speaker 1: up and move to a new city and say I'm
49:05
Speaker 1: gonna I'm gonna try Chicago or New Orleans or Cleveland
49:10
Speaker 1: for a year or two, just to get that sort
49:12
Speaker 1: of experience. And if I come back to wherever, New York,
49:16
Speaker 1: San Francisco, wherever, Hey, at least I've experienced something else
49:19
Speaker 1: and I have a frame of reference abroad. I have
49:22
Speaker 1: to say, you know why I think. I mean, I
49:25
Speaker 1: had studied abroad in in college, but moving abroad early
49:30
Speaker 1: in my career was one of the best things I did.
49:32
Speaker 1: It's it's eye opening, and you know, I sometimes I'll
49:34
Speaker 1: have a conversations with people where they don't they don't
49:36
Speaker 1: want to move across country or they don't want to move.
49:38
Speaker 1: You know, you get a job in Hong Kong and
49:40
Speaker 1: a heartbeat. I could give people Hong Kong London. Just
49:42
Speaker 1: take advantage of it. I mean, the world is an
49:44
Speaker 1: incredible place, and um I I that's my advice would
49:48
Speaker 1: be to be open minded and to take some risks
49:50
Speaker 1: and make sure they're doing something they love. Take risks,
49:53
Speaker 1: do something you love. All right, let me let me
49:55
Speaker 1: see if I can remember that and our last question,
49:58
Speaker 1: and I'm going to change the aid on this a
50:00
Speaker 1: little bit. What is it that you know about banking
50:03
Speaker 1: and investing and running a company that you wish you
50:07
Speaker 1: knew twenty plus years ago? You know when people always
50:11
Speaker 1: ask me, what would you go back and do differently?
50:13
Speaker 1: That's that type of question. I always say nothing because
50:16
Speaker 1: I'm afraid that I wouldn't get to where I am now.
50:19
Speaker 1: The path is what leads you to to what you know.
50:23
Speaker 1: But all that said, what do you wish you not?
50:26
Speaker 1: I'm not asking you what you would have done differently?
50:28
Speaker 1: What did? What do I wish you knew way back
50:31
Speaker 1: when there is that you know today you didn't know
50:33
Speaker 1: then they I wish I knew how successful Amazon would be,
50:37
Speaker 1: an Apple would be. I mean, you know, investing the
50:42
Speaker 1: SEC has a temporal department that prevents people from going
50:45
Speaker 1: back in time, and I'm not allowed, so you can't.
50:47
Speaker 1: You can't use that. But but just as a like,
50:50
Speaker 1: I think back when I was younger, and I'm like, oh,
50:53
Speaker 1: what an idiot I was. If only I had at
50:56
Speaker 1: least a little more awareness of the world around me.
50:59
Speaker 1: So that's like, I wish I knew that it was
51:01
Speaker 1: actually a full planet and it wasn't just involving around me.
51:06
Speaker 1: But career wise, I understand exactly what you're saying in
51:11
Speaker 1: terms of you don't want to change the path, but
51:13
Speaker 1: I would love to know a lot of the things
51:15
Speaker 1: I know today in terms of, uh, you know, making sure.
51:20
Speaker 1: I think there were times in particularly in my career,
51:24
Speaker 1: in particularly when I was doing M and A, where
51:26
Speaker 1: I buried myself in my work. Um and as you know,
51:30
Speaker 1: as my husband likes to remind me, you thought it
51:32
Speaker 1: was the coolest thing in the world. You never would
51:33
Speaker 1: have wanted to be somewhere else on a Friday night
51:35
Speaker 1: or Saturday night. But I do think sitting back and
51:38
Speaker 1: saying there you could have backed off a little bit
51:42
Speaker 1: and done some more really interesting things, and you didn't
51:45
Speaker 1: need to be so focused on one part of your life,
51:51
Speaker 1: probably for as long as I would have I tend
51:54
Speaker 1: to get that way when I'm focused on some hyper
51:57
Speaker 1: I'm hyper focused on it, and that that can be
51:59
Speaker 1: a benefit. But you know, I think your biggest strength
52:01
Speaker 1: is usually your biggest weakness. Your biggest strength is okay,
52:05
Speaker 1: there's a blind side there, and right, the tendency to
52:09
Speaker 1: take it to to a place that's one notch beyond
52:13
Speaker 1: where it should have gone. Short, Kelly, thank you so much.
52:16
Speaker 1: This has been absolutely fascinating. We have been speaking with
52:20
Speaker 1: Kelly Coffee. She is the CEO of JP Morgan Private Bank.
52:26
Speaker 1: If you enjoy this conversation, be sure and look up
52:28
Speaker 1: an inch or down an inch on Apple iTunes and
52:31
Speaker 1: you could see the other ninety or so of these
52:34
Speaker 1: podcasts that we've done. I would be remiss if I
52:38
Speaker 1: did not thank my booker and producer, Taylor Riggs are
52:42
Speaker 1: chief engineer Charlie Bohmer. Today's sound engineer is Genie. Is
52:46
Speaker 1: that right? And my head of research is Michael Batnick,
52:51
Speaker 1: who helps prepare all the questions for this. You've been
52:54
Speaker 1: listening to Masters in Business on Bloomberg Radio