She said Franklin Resource hired 60% of Legg Mason’s holding company and the distribution team is a good mesh between the two organizations. “You are really trying to put together the best team because, again, you couldn’t do that if you didn’t have similar cultures,” she said.
While many asset management deals are cutting costs, Johnson said Franklin is focused on growth. “It was all about saying we want an all-weather product lineup. The products we actually got from Legg Mason are very much complementary to the products we have at Franklin Templeton,” she said. “It gave us more diversity of the client base,” she added, explaining that Legg Mason was 75% institutional and 25% retail, the opposite of Franklin Templeton. But now they are 50/50.
“That just built a more resilient, stable business and then it finally gave us scale in certain markets that were important to us,” she said.
Johnson’s advice for financial professionals who have recently completed merger transactions is to ask questions of the firm they acquire to understand what motivates them. “You have to understand the history to understand why things are a certain way, and if you can understand the history, it helps you to bring everybody along,” she said.
Johnson noted that her greatest lessons came when she ran an auto-financing business. “The most important thing in running a business is connecting with people and [remembering] that you are a people business, and of course, focusing on the clients,” she said. “It doesn’t matter if you run a small business or a big business, it’s kind of the same problems. It’s just more zeros.”
With the changes facing the industry, Johnson said financial advisors need to have investment products that deliver. She also posited out that more advisors are evolving into wealth managers. “The good news for everybody is what used to be preserved for the ultra-high-net-worth clients, all those capabilities—technology is enabling those things to be delivered to the mass affluent through advisors,” she said.
Franklin Resources, Johnson said, is investing in tools that they believe will help advisors. One of those tools is the Goals Optimization Engine (GOE), which provides investors with personalized investment paths for their goals and gives advisors a scalable way to offer a differentiated investment solution and deepen client relationships.
On the topic of diversity, Johnson cited the movie "Moneyball," which is based on the 2002 season of the Oakland Athletics baseball team, as a great management lesson. “The whole point of that movie was all this talent exists, but the traditional coaches were so biased in how they reviewed everybody that they kept dismissing this talent,” she said, noting that diversity and inclusion is about finding talent that have been overlooked becuase of people’s biases.
Johnson said Franklin Resources has several initiatives that focus on diversity. “I genuinely lead from a socio-economic standpoint. We have to ensure that we continue to improve the prospects opportunities for all minority groups. Otherwise, we have a societal issue,” she said.
Among the actions the firm has taken is the recent hiring of Legg Mason’s chief diversity and inclusion officer, Johnson said. The firm also does work with a middle-school program aimed at getting more females into investing; it has a business resource group designed for retention purposes; and the firm is expanding its recruiting efforts. “If you are recruiting from the same pond, you are going to catch the same fish,” Johnson said.