Jennifer Johnson often tells the story about the time she would ask her daughter if she would want to follow her into the financial services business, and she said no because she wants to be in a business that helps people.
“I said, ‘Are you kidding me, this is a business that helps people’. We help people with the most important things in their life," said Johnson, the president and CEO of Franklin Resources. Advisors often to people who are "afraid of losing their house in retirement or not having a dignified retirement or [having] a special needs child and [worrying] whether or not there is enough money once they are gone. ”
Johnson spoke at Cetera’s Connect@Home conference, which concludes tomorrow. She touched on issues ranging from Covid-19 to business culture to diversity to the recent $4.5 billion merger with Baltimore-based Legg Mason.
Johnson further made the point that shareholders, mutual fund holders, pension funds and other investors are among those who make it possible for drug makers to conduct Covid-19 vaccine research.
“This is a business that makes a difference for people and we have to get that message out to attract people into the purposeful work that we do,” Johnson said.
That is where, Johnson said, asset managers in the industry have failed a bit. She explained that they are too focused on beating benchmarks. “The reality is, our clients don’t care about benchmarks. What they want to be able to see is ... how I am doing toward my goal, toward my retirement," she said. "We have to be able to communicate … and translate this into a way that is relevant to the clients.” The industry can attract more people if asset managers do a better job of communicating with clients, she added.
During the pandemic, Johnson said Franklin Resources was able to transition to 98% of its employees working from home globally because the technology was already built within the firm. With more than 100 offices in 37 countries, videoconferencing had long been a part of the firm’s infrastructure, she said.
"Multinational firms that aren’t thinking about how to manage talent—wherever talent wants to be—are going to be at a disadvantage,” she said. “Technology is going to enable us to do that better, but you have to have it as part of the DNA of the firm.”
Johnson said her teams are encouraged to think in terms of Covid-19 being around until 2022 or later, adding that the workplace has probably been permantly changed by the pandemic. "Those firms who can figure out how to take advantage will be in a better position,” she said.
In February, Johnson took over as head of Franklin Resources, the company her grandfather, Rupert Sr., founded in 1947, as the San Mateo, Calif.-based firm acquired Baltimore, Md.-based Legg Mason. The deal, valued at nearly $4.5 billion, which more than doubled Franklin Templeton’s AUM to $1.5 trillion, closed in July.
Johnson said seeing a big merger take place was not new to her, as she was around when Franklin acquired Templeton in 1992. “What I will say is investment bankers will tell you why it’s a great strategic fit, why it’s a great price, but they never talk about culture. And it’s our view that deals live and die on whether the cultures mesh or clash,” she said.
She said Legg Mason had a policy called “No chalk on your shoes,” which Franklin Resources will adopt, that refers to sport athletes getting so close to the out-of-bounds area that they get chalk on their shoes. She noted that her father’s views had always been “take care of clients and the stock price takes care of itself. So, focus on doing what’s right because your reputation, once ruined, you will never get back.”
Her father, Charles, became CEO at age 24 in 1957, a decade after his father, Rupert Johnson Sr., founded the company, Charles stepped down in 2013, handing the post over to his son, Gregory.