Invest Like the Best with Patrick O'Shaughnessy - Jenny Johnson - Seven Decades of Investing Expertise - [Invest Like the Best, EP. 256]

Episode Date: December 21, 2021

My guest today is Jenny Johnson, President and CEO of one of the world’s largest asset managers, Franklin Templeton. Jenny joined the business in 1988 and has worked in the organization ever since. In early 2020 she became CEO of Franklin, which now manages some $1.5 trillion. I should, of course, note that I met Jenny as our two firms explored a partnership, which we cemented 3 months ago when we announced that Franklin Templeton would be acquiring O'Shaughnessy Asset Management.   During our conversation, we discuss Jenny’s thoughts on leadership, how she manages the needle-moving problem that afflicts many large companies, and the ways in which she sees private markets becoming more accessible to retail investors in the future. Please enjoy this great conversation with Jenny Johnson.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Invest Like the Best is a property of Colossus, LLC. For more episodes of Invest Like the Best, visit joincolossus.com/episodes.    Past guests include Tobi Lutke, Kevin Systrom, Mike Krieger, John Collison, Kat Cole, Marc Andreessen, Matthew Ball, Bill Gurley, Anu Hariharan, Ben Thompson, and many more.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @patrick_oshag | @JoinColossus   Show Notes [00:03:19] - [First question] - The four P’s of leadership and what she thinks are the most important roles of a CEO  [00:06:00] - The difficulty of finding and recruiting great people and keeping them invested  [00:07:18] - Things she looks for in her senior leadership team [00:07:59] - Knowing when to be more or less involved as a leader [00:09:30] - Her takeaways from working in a family-owned business [00:11:20] - Advice she’d give to families who are building businesses together [00:12:06] - Thoughts on the role technology will play in the asset management industry [00:16:13] - Costs and frictions that blockchains could alleviate [00:18:17] - General views on disruption and considering ones position when thinking about the future [00:20:09] - Knowing when to start a project internally or acquire an existing project [00:23:10] - The hardest things about effective M&A decisions [00:23:42] - Overseeing a hybrid model of singular focus between multiple investment groups [00:28:26] - The pros and cons of active management against passive adoption [00:31:15] - Costs and fees in the industry and how they might change in the future  [00:33:04] - Talking to clients when they don’t have one specific view on strategy [00:36:10] - Formative experiences in her career that has shaped her worldview [00:38:34] - Managing emotions through seemingly chaotic situations [00:39:13] - The impacts on psychology when being a top performer and an average one [00:41:15] - Managing and adapting strategy when faced with highs and lows  [00:42:55] - Acquiring alternative managers and defining what alternative assets are [00:46:26] - Relevant trends on how capital is pooled and their client base over time [00:47:52] - What is under-discussed in the world of asset management today writ large [00:49:01] - Other leaders she’s met or knows that have had her in awe [00:50:30] - What about Cathie Wood has made her story and approach so successful [00:51:38] - How she runs a great board meeting and ways to improve meetings themselves  [00:53:34] - Lessons learned about time management as the leader of a public company [00:54:52] - What purpose means to her  [00:56:18] - Ways we can incentivize young and new people to start investing [00:59:10] - Her favorite things that her dad has taught her and how she’d describe him  [01:00:57] - What has her most excited about the future   [01:01:34] - The kindest thing that anyone has ever done for her

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selection at Watchbox features all the most renowned brands, plus the industry's most exciting independent watch companies, all certified authentic and collector quality. Watchbox's global team of expert client advisors can help you find the watch you've always wanted. Step into the collector circle at the watchbox.com slash Patrick. Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. Invest like the best is part of the Colossus family of podcasts, and you can access all our podcasts, including edited transcripts, show notes, and other resources to keep learning at join colossus.com.

Patrick O'Shaughnessy is the CEO of O'Shaunacy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaunicee asset management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. clients of O'Shaughnessy asset management may maintain positions and the securities discussed in this podcast. My guest today is Jenny Johnson, president and CEO of one of the world's largest asset managers, Franklin Templeton. Jenny joined the business in 1988 and has worked in the organization ever since.

In early 2020, she became CEO of Franklin, which now manages some $1.5 trillion in assets under management. I should of course note that I met Jenny as our two firms explored a partnership, which we cemented three months ago when we announced that Franklin, Templeton would be acquiring O'Shaughnessy asset management. During our conversation, we discussed Jenny's thoughts on leadership, how she manages the needle moving problem that afflicts many large companies and the ways in which she sees private markets becoming more accessible to retail investors in the future. Please enjoy this great conversation with Jenny Johnson. So Jenny, I was toying with where to begin our conversation today. We're going to talk about so many different areas of interest, but leadership is one that to me, having spent a little time with you,

I'm perhaps most interested to dive into the details on. So my opening question for you is about the roles of a CEO, both things that the CEO should do and shouldn't do. I'll start with the positive of the things that a CEO should do. What do you think are the most important roles and functions of a leader in the CEO seat? I always like to say that. I came up with my four P's of leadership. And so I'm going to start there.

And it's people, passion, purpose, and persistence. And I think people, one is, what's the job of the CEO? The number one job is to get the right team, get the right people who are running things. Passion, love what you do, and you're not going to work a day in your life. If you don't love what you do, chances are you might be good at something, but you're not going to be great at it. There's going to be other people who are just more passionate and think about it more often, and they're going to be much better at it. So you've got to love what you do.

Purpose, great leaders, I think I've always done this. This has now become something people talk about, but talk about what you do in a purposeful way, and that will inspire your team to follow and to lead in their various areas. What do I mean in our business we talk about? We help people achieve the most important goals in their lives. Unfortunately, it takes kind of money to do a lot of things that you want to do. And so every day at Franklin Templeton, people are coming in thinking, I carry this responsibility to help people do those things that are the most important in their lives.

And I jokingly tell the story about my three daughters, ask any of them, would they follow me in finance? And they all pretty much said no. And one of them said, I want to do something that helps people. And my comment was, are you kidding me? This really helps people. So that's the purpose. And then persistence.

I mean, Patrick, you know you run a successful business. It's much more about you're going to have those trip-ups. You're going to have those failings. It's much more about how you get up, dust yourself off and move on that determines whether you're successful or not. And so I think it's having that persistence to just continue to think, I got to think creative ways to navigate this situation and be successful with it. So I think those apply to any senior or any leader. And then I think what we've learned in this time of COVID is that I think

it used to be that leaders had to sort of have a distance and maybe show a stoic nature. And what we're finding is that more successful leaders, I think, lead with some empathy because we, in this period of COVID, I had to understand that everybody had different situations. Somebody said, we're all in the same storm, but we're not. not in the same boat. It's recognizing that as a leader and having some empathy. And I think that that was really important during this time. Part of the answer might be that last P persistence, but I'd love to understand the hardest aspects of doing the first three well. All of those things make tremendous sense and I think are just correct. But each of them is hard, harder in practice than it is

in theory. And so maybe starting with people, my friend Dennis Hong had this great idea for CEOs, that their job is to get people all in and keep them all in, which I think encompasses a lot of what you've said two. What are the hard, though, dimensions of people? To get great people is the goal. What is the difficulty along that path that you've most commonly faced? Well, first of all, I always say that talent in the business world is a bit of a Venn diagram. These are the people I love to hang out with. These are the people I should work with. It's great when they overlap, but don't confuse the two. I think one of the challenges is you're building a business and working with people, you get to build friendships and deep relationships. And sometimes the company changes and job

changes, the industry changes, and maybe they're not right for that same job. It's about making sure that you're keeping the people in the right seats, and that could be hard because sometimes people, the job grows out of their capabilities in that role. And then you've got to make tough decisions. And I think it was Jack Welsh who always said he was slower to make changes than when he looks back. That was one of his Achilles heel. And I think that's every CEO's challenge. In your senior leadership team, what do you look for? Is there a common, set of traits that you think defines everyone that you're interested in working with at the highest level? You're building a team. You fall basketball. I think it was the dream team in the Olympics

that didn't do that well. Right. They all played great individual playing, but they didn't play as a team. So you're building a team. They got to work together. They're rowing the boat in the same direction and they're complementary to each other. So the skill sets are going to be different. And then one of the things we talk about is no meeting after the meeting. You as a senior executive's job it is to speak up, give your opinion, honest, non-political opinion. to what you think to be helpful. And then once a decision's made, everybody works together to support it. One of the most common challenges I've observed amongst even great leaders is knowing the degree to which to get involved in individual decisions. And I'm curious if you have a framework or a way of

thinking about this where there is some right level probably in each situation, but it's very hard as a leader to know when to be more or less involved. How do you process that sort of issue? I kind of grew up in the bowels of the organization, having run operations and technology. I can find myself sometimes getting into the weeds. Some details, some weeds. But here's how I think about my time. I think 40% of my time should be spent on clients, prospects, industry speaking, external facing.

That should be about 40%. 30% should be on day to day. So my team should be things. I should just be getting involved in those decisions where people are struggling to actually agree. You have a great team. Hopefully they don't agree on everything. And so that's where I'll get called in. And if that number edges up more than 30% consistently, I probably have the wrong people. And then I think 30% because we're living in this dramatic time of technological innovation, since I'm a third generation running this company, I focus on making sure it's here for the fourth and fifth generation.

So that means decisions today are probably seeds planted today are relevant for the next generation. So 30% is really honestly spent on disruption on areas that I think can be disruptive to this industry, not focused on the industry, but frankly focused on areas outside the industry that may be relevant someday to this industry. How do you think you behave most differently as a leader, given that you are the third generation? There's fascinating research on family-led companies through time. Some of the longest-lasting corporations, Japanese ones that have been around for 1,000 years,

have a strong family component to them. And I shared the fact that I've worked in a family business and for me, it's second generation. It seems like a sword that cuts both ways. So I would be really curious to know your experience and how you think it's affected you and your leadership style. On the whole, I actually think it's got benefit, but you're right, it cuts both ways. And so why do I think it has a benefit? I think one of the challenges of being a public company CEO is this complete focus on quarterly earnings by analysts, by investors. I mean, we're institutional investors, right? So we push CEOs on that. What does it mean next quarter? And you sort of get about a three-year run as a CEO to have had investments show signs of being successful. And sometimes it takes

longer than that. So I think the good news is the ability to think really generationally, I think, makes a difference. Because I'll make decisions that I think may not, I mean, they're focused on blockchain and infrastructure investments. I honestly think they're kind of a 10-year-out massively disruptive. There'll be some shorter-term disruption, but I better focus on them today. And I actually think it's probably getting shorter and shorter in that window than maybe when I first thought about it. But keeping your eye on those things and making investments that you know are all about longer-term trends to ensure that you're positioning the company to play in there, which sometimes Our family still has a concentrated ownership in the business. So we're able to make that

longer term, even if it meant a short term, maybe impact on earnings because you're making sure that your position for a longer term growth of the company. What advice would you give other, either, I guess, parents or children about working with their parents or children in a serious way where you're building something that has multi-generational past or potential future? What are the key lessons that you've learned that you had offered to others. I think one thing is you have to put the company first and you have to leave behind the natural dynamics that come in a relationship of older siblings, younger siblings, parent-child kind of thing. And you come to the office, you've got to come to the office and

be focusing on what's right for the business. The good news is you all are focused on what is right for the long-term business because it impacts you over the long run. It's not like you could just walk out. I mean, I guess you could just walk out and get a job somewhere else, but it's not You're very strange. Yeah, yeah. I'd love to talk about technology. You came up through, as you said, the operations and technology and ran that side of the business. And you've done a lot and spoken a lot about your feelings on the role technology will play in the future of asset management.

This is a fascinating topic to me because obviously it's a personal interest, but also I just feel as though this industry has been fairly slow to embrace and adopt transformative new technologies. Like the model of taking someone's money, investing and charging a fee has kind of been fixed for a long time. How do you think about the role that technology is and will play in the asset management business model and industry? From on the investment side, I'm still a big believer in active management. I think passive has its place to complement exposures and things. They still am a big believer in risk-adjusted returns. Having said that, the kind of business school model of you build a spreadsheet with P&L and you assume sales and things, I think it's going to be all about leveraging AI and data in gaining,

information edges that give you insights that will complement the model, but they're going to be important. And if you haven't included them in how you think about making investments and those kind of data scientists on your investment team, chances are if you're an active manager, you're going to have hard time to keep it up. And I'm going to give you an example because I happened to have been early in my career a consumer lender. So we used to, we did auto loan financing. So we'd look at six things, your FICO score, your debt to income, how long you were employed, all those things that you would imagine and are relevant. Well, today we bought a company called Random Force

that does leverage AI against data sources, unique data sources to determine loans and what loans they make investments. And they found micro signals like, if you didn't capitalize the name of your employer and these other micro signals were out there, then you had X percentage more likely to charge off. Or if you applied for the loan after a certain time at night,

you were a higher risk. These things, if you're not adding those types and staying on top of those types of trends, you're going to have adverse selection on a loan portfolio that you're going to get and you're going to end up with much greater losses. So I think that's relevant to any kind of investment. So I think AI is really important in data and raw sources of data that others don't have is going to be a real edge. Well, as you know, I think customization of people's investment portfolios are going to have a lot less pooled vehicles and a lot more individually held accounts that are tax efficient that are going to reflect

your personal values, you're going to be able to express, especially as ESG data gets better and better on companies, you're going to be able to express your investments in such a way that it includes kind of what your passions are. And you're going to be able to measure those decisions, whether they add alpha or take away from your returns in a much more granular way. The customization, as you know, with Canvas, that's exactly what you do. And I think taking that and bringing active pools and putting them through those screens is going to be future. And I think that blockchain is going to dramatically reduce the infrastructure costs of the business. If you ever run a back office and any kind of financial services firm, you know that there's a heck of a lot of cost in just reconciling between systems.

Well, immediately, if it's made, if it's imprinted on the chain, it's there. You don't have to reconcile. There's no worry about what the source of truth is. That's going to compress a lot of costs in the industry, I think, over time and have much faster settlement. So I think that's going to change it. And then the ability to have, say, blockchain where you have smart contracts is going to unlock historically illiquid assets, fractionalize them. It's going to take out a lot of the frictional costs of transferring that asset. So it's going to be able to essentially open it up to the masses. And the example I like to use is imagine if you could sell the Empire State Building

to a million people and they got one millionth of their rent in their token. And I can sell it to you without going to the title company. So there's no frictional costs. I just sell you my token. Imagine what you can unlock in the world. And I think that that's what one of the reasons I say focused on blockchain. I think it's going to be really interesting. You obviously know this part of the business far better than most and certainly better than me.

I'd love to understand one level deeper on those internal costs and difficult and frictions that exist that's something like blockchain may alleviate for asset management specifically. maybe just describe how it is today and what we may not appreciate about reconciliation and settlement and the costs that no one thinks about, right, that's an investor in a mutual fund, like they're not thinking about the guts behind some of this stuff. So educate us a little bit on those guts and why you think they could get so much better and why that matters. Number one is just you have a whole bunch of systems that you bring in to do something. You piece them together over time. I mean, when I started at Franklin Templeton, I remember my brother brought in the first computer into the company to do some help and some trading.

And nowadays, and there's a lot of tech debt in financial services business, because we built these things as the capability and technology computing improved. Well, then you have to reconcile one system to the next. So there's a lot of costs embedded in that. That's one piece. If you truly have a blockchain where it's recorded, and that record is a source of truth, and that becomes basically a way in which everybody can agree,

including taxing authorities, everybody, this is the source of truth, that reduces a lot of the systems that exist out there. Think about a foreign exchange contract or any kind of derivatives contract that requires collateral. Today, there's often somebody in a spreadsheet that's looking at it saying, well, my counterparty owes me X today. We've done the calculation. These covenants have been hit, or this is what the balance is, and then they go and request the payment. Well, all that can be programmed into the smart contract so it actually automates the process. And there's no disagreement about it because it was what was agreed to in the purchase of the contract. It's literally programmed in there. It's going to take time because these things have to talk to each other. People have to agree on

protocols. It always takes a lot more time to roll these things out. But I think you will see it over time driving down the cost in the industry. I know you've built a very impressive team filled with senior leaders formerly from other parts of the business that are dedicated to crypto specifically. You mentioned this 10-year type bet. This probably represents for Franklin. It brings to mind a topic that I'm always fascinated by for big companies and those running them, which I'll call it the move the needle problem. This is a question about disruptive innovation that very often the things that represent the biggest threats in hindsight are so small and tiny to begin with that you just don't pay them any mind and then they grow very quickly and you're not well positioned. How do you think about

disruption from within and not getting sucked into that, not doing something because it doesn't quote unquote move the needle. Here's how I think and kind of advise people during times like this. So first of all, the type of personality of the person who's the disruptor is often not focused on getting the job done today. Like he's always curious, he or she's always cheers about what's happening over here. You start talking to him and it's kind of esoteric because one of the biggest problems with disruption is people can talk about it, but the words don't exist. So they don't exist so they can't explain it that well. And other people can't figure it out. And so if you're trying to do today's problem and you have somebody over here, it's like a fly bothering you, right? You're just talking

about stuff that's not relevant to solving your today problem. I've got to make an investment today. I've cut the nav today. I don't really care what you're talking about. So the way we're doing it is we have really created a subgroup. And I attend meetings. with this group, to talk to them, to understand, and frankly, protect them, make sure that they get the appropriate budget, make sure that they're able to get the resources, frankly, give them a little bit of a pass on being able to present a business plan and business case to say, here's when the profits are going to come. It's almost more like an R&D effort. And I think if you don't protect them, they get squashed within an organization. Eventually, they're frustrated and they leave.

How do you think about the combination of internal projects like that with an M&A strategy? And obviously, Franklin's been prolific, especially as you've been CEO, in acquiring pieces in a way that seems from the outside very deliberate in terms of what they're contributing to in terms of an overall vision or purpose. I would just love to dive in a little bit to how you start with some sort of vision and what that vision is for Franklin. And then how you decide between like the internal group approach versus the MNA approach and then I'll ask some questions on tactically about M&A too. For us on M&A was more filling immediate gaps. That was the things that we're looking at versus some of the stuff that we're doing in the development ourselves. To be honest, if you could buy it, it's often better than trying to build it yourself. It's hard within companies.

I laugh because you take a corporate IT department and I remember an entrepreneur saying, yeah, you're never going to have innovation in there because we put so much compliance, so much testing, there's so much fear about something going wrong that it would be hard to really be innovative. Eventually, it just too expensive. The entrepreneur pieces it together, goes out and sells it, and then fills in the blank to make it scalable after. Our M&A strategy was very much around areas in the business that we knew we needed to fill in product gaps, really, or capability gaps. In the case of, say, Canvas, which you guys had, I mean, we looked at that and said, boy, if we don't buy this now, we maybe can build it in 18 months. Oh, but by the way, the whole industry will have moved in that 18 months.

you'll continue to build your capabilities on that and we'll continue to be behind. So sometimes you buy to just say, I've got to make sure I'm at market today. And so that was really what we're doing. And then, of course, things like Lexington Partners was about we wanted to be bigger in the alternative space. We had real estate with Clarion. We had private credit with Benefits Street Partners and Lexington Partners really brought us private equity.

And we know in the asset management business, you know, there's a view that 49% of revenues will come from the alt space. So we need it to be bigger in that space. And I'm passionate. I think there's more opportunity for illiquid assets to be brought because of the illiquidity of premium is becoming bigger and bigger will be created in such a way, and packages in such a way that they'll be available to the retail consumer. So we wanted to make sure we had that core capability.

And then what we're doing on the development side, we have an incubator. So we look at at least 20, seriously look at 20 companies a month to bring into our incubator, and they are all in the area of potential disruption to our business. And so it gives us a front-ray seat to being able to understand how things are disrupting. And we make an investment. Working on our campus, we're setting up some additional incubators around the globe, because we think disruption can happen anywhere. And those are the types of things where you're kind of investing. And then there are some things we're just doing internally. Now, when you do it internally, you have to make sure you're also staying aware of how others are also developing the same

idea because you may want to stop and just go acquire somebody else. What is the hardest thing in your experience about effective M&A? What are the things that just keep you up at night or repeatedly difficult as you go through these processes? What I always say is, look, the investment banker is going to tell you why it's a great price and why it's a great strategic fit. You're never going to talk about culture. And in the end, I think deals are successful or not, depending on the,

whether there's a culture class or a culture integration. We have passed on many deals that we think were strategically made a lot of sense, but we just felt like the cultures would mesh. The other unique aspect of Franklin is this sort of hybrid structure that's somewhere between the, I'll call it like pure monolith structure, like single product from the top to the bottom of the organization, all the way to like maybe a Berkshire Hathaway where there's all these businesses, they don't really talk to each other.

They're loosely related or not related at all. Franklin has this interesting hybrid approach where you have a number of different investment groups. There is more connective tissue between them, it seems, again, from the outside looking, than Berkshire model. But it's also not a monolith, like an apple or something that's just got a couple products. Teach me a little bit about managing where you are on that spectrum. Like how much you think about being deliberate about picking your point on that spectrum and how to do it well. I actually think we're pretty simple in that if you think about it, we have one capability, which is, investing people's money to get risk-adgested returns. We want to be able to do that all the way

across the spectrum from very, very low risk to much more higher risk, high potential alpha, but high volatility, and be comfortable with any of those as long as we describe what it is. So we want to make sure that somebody comes in, we have the full spectrum. And then we package it in whatever way our clients want to receive it. So as I mentioned, you know, Canvas, we know that the world is moving to this separately managed account with tax efficiency and ESG overlay. That's just one way in which we can package it. We might do a collective investment trust, a USITs, an ETF, a mutual fund. All those are just packaging of our capabilities. You want to make sure that the packaging is appropriate for both what the client's looking for

from a liquidity standpoint and how the investment mandate is. The first thing was to say, if we're offering all these different independent investment teams, they really have to be independent. Clients sign up for an investment team, which means whatever they define, and we've been very clear, you tell us what you need from your investment process. Do you need your own technology? Does trading need to be on your desk? Some of our teams say, I need to have trading sitting next to me. Others say, I'll use the global trading. I like the past the book, you know, follow the sun kind of model. So our investment teams are really given that flexibility to define those things. Risk management, pre-trade compliance, all those things are integrated in each of our

individual investment teams. What we're finding is you almost need portfolio specialists who are helping on the distribution process to really be able to talk and they have to sit with the team so they can talk specifically as if they're a PM as part of distribution. So that is completely independent. And then we say we sit on a $1.6 trillion platform where we can invest in technology to provide more customized solutions, where we can invest in data that can be shared across our investment teams, giving our partners comfort around risk management, that we're not cutting corners around risk management and compliance. And then we can do investments in things like disruptive technology that we know is going to impact us in the future. But the most exciting part of all this is that

our investment teams have recognized, you know what? We said the competition is outside the wall. So actually leverage the strengths inside the wall. So I'll give you an example. When COVID hit in 2020, we just announced Legamason deal. I don't know if you remember, but true you do, the Treasury market, the world's most liquid category out there froze up. So we got a call together of our three fixed income teams, the CIOs at Leg Mason, Brandy Wine, Franklin Templeton, our private credit group, and just got them on the phone to talk

about what they were all seeing. We did this weekly, so we focused through an understanding sort of where the markets were and what everybody's perspective was. And after about six weeks of doing it, I mentioned to the guys, hey, listen, maybe we should stop. Things have calmed down. I guess it was a couple. It was a little longer than that.

But things have calmed down. I don't like to have meetings for meetings. Should we make this adventure event? And sure enough, the CIO said, this is really, really valuable to us. Never had this opportunity. And so we have these quarterly CIO events where the teams can get together and just talk about what people are seeing. And we think that that will match.

actually give them opportunities to have more insights. It's great to a growth and value person. I think there's a personality difference. I don't think they're going to necessarily agree, but you know they'll make better decisions when they can be informed by have those kind of conversations with each other. And then finally, we see the world moving towards solutions. So as you move towards solutions products, that's a combination of all these. That's a chef walking into the best stock kitchen and coming up with the best meal. And so it's the world's moving to more solutions, product capabilities, having that really diverse capability, we think, gives us a big advantage. There's kind of three things that weave all that together in terms of the business

model itself where you've got the investment strategies, you've got the delivery mechanism, which we've talked about, and then you've got sort of the revenue model. Historically, it's been pretty constant. You charge a percent of assets under management, maybe some performance fee in certain cases. Say a bit more about what you mentioned earlier around active versus passive in that first bucket. What a good investment strategy is to you. The passive trend has been, we don't have to talk about it. Like, it's obvious. It's huge. Tons of assets has flown that direction. Franklin obviously is a suite of active strategies. So what are the pros and cons of active versus passive in your mind against the backdrop of passive sort of winning share over the last couple decades?

Passive's going to win. You often win share in momentum markets. And this has been an extreme one for a couple of reasons. One, you've just had technological innovation. I think there's six, companies in the S&P 500 that have accounted for like 50% of the earnings. Like, that's crazy. So if your strategy was market weighted investments, that's going to win. And then you had this backdrop of just massive government intervention where they're pumping money into the system. And interest rates kept low, where were you going to put your money? Were you going to put it in your zero checking account? Or were you going to say, well, heck, I'll go into the equity market. If I didn't have access to the private markets, I went in the equity markets. And so that became kind of a self-fulfilling

prophecy. But I describe it a little bit like, if I said to you, Patrick, I want you to buy a car, and I want you to drive down the street, and I want you get the best, you got to get there safely, but the best value per mile. You're going to go buy the cheapest car with the lease safety features on it, as long as the road is well paved and not a lot of twists and turns. But a part of that drive means you've got to drive through the mountains in a snowstorm or a toddler is going to run in there, or it's really windy, you're going to wish your car has some safety features on it. You're just going to be better. You're going to want a four-wheel drive.

You're going to want to pay up for those things. We have been in a decade of a straight, well-paved road. And now we're going to move into this. And I think we've already seen it with the Fed's kind of discussion about potentially raising rates and things, where it's going to just be different from what it was. And at that, you want people who are at the wheel driving. I remember somebody saying that pilots say in time, of great turbulence, that's when they go off autopilot and start flying the plane. We're coming up to

that scenario. My theory is people become complacent when you've had such wins over the last decade to say, ah, I'm just going to go continue passive. And what I say is, while market beta is market beta, beta got a lot riskier. For example, when Tesla was put in, if you measure beta by volatility, when it was put in to the S&P. And so I'm not sure that people understand the increasing risk that's happened as you've had this great concentration of single companies. One of the things I've always found really interesting about the active passive debate, if you study Bogel's early writings, was that really he was talking more about cost reduction than market efficiency,

which I think most people think active passive. They think different versions of the efficient market hypothesis. But Bogel is very focused on cost, that costs compound, taxes, management fees, whatever, turnover is expensive. And that's really the enemy more than anything else. How do you think about costs in our industry where they've trended, how they might trend in the future, and how that affects a business like yours? So the interesting thing, as I said, I think when you move to more of these separate accounts, you're going to pay for the active management and people need to focus on, I invested a dollar when I get back. That's the answer.

I invest a dollar when did I get back. If I paid five cents and you gave me 10 cents back, maybe I'm okay with five cents versus I paid you a penny and I got two sets back, right? So you need to think about net number. As you drive out, because a lot of the costs were because you had back office costs, say, mutual funds, plus you had distribution fees embedded in the mutual fund. But post the financial crisis where basically regulators globally said we want to have more transparency around distribution fees, the world went to fee-based. And a lot of the first fee-based advisors said, well, mutual funds are too expensive.

I'm going to go to ETFs. But really what they were doing there is it was because there was. was service fees and distribution fees embedded in mutual funds that weren't in an ETF. Those were either paid directly to broker and then your advisor was getting paid directly. So I think that what we're seeing as the world has gone to more fee-based is that you're seeing the kind of cost of the underlying investment products just get culled down to the investment management fee. You've reduced a lot of those other costs. I like the idea of the driver in turbulence or something. And obviously there's a lot of it, I don't know how many different investment teams within Franklin, a lot. Many that have

maybe opposite views of the world, deep value versus aggressive growth or something like this, how do you think about helping clients navigate to those different firms, given that they themselves, like you said, the three CIOs on that call, depending on the asset class, might have wildly divergent views. That's kind of an interesting thing that Franklin doesn't seem to have a house view on things. So what does that mean for how you talk to clients and help guide them to the right choice? It's kind of an interesting problem. So first of all, we're being. on working with distribution partners because it is hard to navigate all those things without a financial advisor who really understands what your individual goals are. Are you going to help your

kids pay for college? What's the comfortable number for retirement? And you can ask a lot of questions, but people think that Rojo is going to get rid of financial advisors. But I'd say, remember, TurboTax was going to get rid of all the CPAs and who's the number one user of turbotax? CPAs, right? So I think a lot of these tools are going to enable the advisor. to be better and be more of a wealth manager, which is what you're seeing. They're no longer just managing investments. They're helping people with, they're obviously doing tax efficiency on the investments, but they're helping people on educating their children, financial planning, making sure that their estates are set up. I mean, it's just a whole

different deal that advisors are having to provide the clients because they're able to be more efficient with tools like goals-based tools. I think at Franklin Templeton, we like to educate the advisor who's spending their entire day focused on being educated on investment products to be able to decide what's appropriate for clients. And in some cases, if the advisor comes back and says, well, I really want a solution-based, I want it to be an income solution or capital preservation or capital appreciation. We're able to then point them to the appropriate products internally. It reminds me of a question I meant to ask during the leadership portion of the discussion,

which is around making decisions by building consensus within your team versus by edict. or by Fiat. I'm always interested in these spectrums of how to reach good decisions, especially when they're important. What have you learned about that same spectrum about when consensus is helpful and appropriate and when fiat and edict from a leader is important when making important decisions? In the end, as a leader, you're going to have to make a decision. And I think that the first thing is it's really important if you have the right team around you to get their feedback. I don't think there should be ever confused between consensus on it and making sure that you're getting everybody's heard that you're listening through because I can't tell you the number of times

I'm predisposed to one saying people bring other perspectives and it completely changes my view on it. So, and naturally sometimes things naturally happen by consensus. An executive team will talk. They'll talk through the things you get the up and you feel like you've thoroughly covered it and everybody sort of comes to a natural conclusion. So it's really ends up being the CEO having to make a decision when there's kind of a tie internally where there's disagreement around it. And then that's your job is to step up and make the call. What have been some of the most formative experiences just in your individual career, even focus on the period before you were running the business? What episodes, and we can do as

many, I love these context, historical episodes in terms of what they taught you and how they shaped you. What are some of those that popped to mind as a discrete period? It could be a single day, a single decision, a period you pick. But I'd love to go through a few. them, hear the story, and understand how it impacted your worldview. I always say to people, the job that gave me probably the most training for being prepared to be CEO was when I was running a small little division within Franklin, which was an auto loan company. And back in the 80s, we had bought a bank and we were trying to figure out how to grow and we started auto loans. And I learned a lot there. And we got in trouble. Here's a thing, Patrick, and it'll surprise you,

but when you're lending people money, it's a different decision than when you're investing and they're handing you money. We probably right out of the gate, we're too lenient with our lending people money, and we got into some regulatory issues. And I just remember, I mean, I'd wake up. I literally would find myself lying in my bed in the fetal position thinking about the regulators or the board that I had to talk to. My father gave me, it was really sweet. He gave me, I still have it. It's like a little Xerox copy. and it's a frog is being swallowed by a duck. But the frog has managed to reach around and is squeezing the duck's neck so he can't actually swallow the frog. And it just says, never give up.

My dad's kind of way of just saying, just stick it out. You'll figure out how to work through it. And that was what it was. It was hand-to-hand combat. I mean, sometimes, he's the example. When I was climbing Kilimanjaro, you're on the last day of the summit, and that's the hardest day, they say, pulling, pulley, slowly, slowly. and all I would think is I had a splitting heading, but I'm just going to get five more steps.

And you do five steps, then you do five more. And sometimes when you're doing the most difficult things, you think about just the steps you have to do in front of you. But the key is that you keep going. And so I probably learned the most lessons in my career during that window of crisis. And I guess what I would say to people is the old never let a good crisis go by without figuring out how to turn it into an opportunity. It is not only for your business, but it's for you, personally. Those character building moments also gave me a lot of confidence to be able to lead in other difficult situations. How do you manage emotions through those periods when it feels like we have our emotions for good reason? Like they're very productive things in terms of

encouraging the right behavior like from an evolutionary standpoint. They're also productive in a crisis. They focus the mind, but they have side effects. What have you learned about managing emotions through these duck swallowing the frog type episodes? I love that story, by the way. I think there are times where you have to compartmentalize as a leader, turn on the logic and turn out the emotion, which you have to make sure that you don't do in your personal life. And so you have to work on that, being able to bifurcate those things. But I think you have to just be focused on what the tasks are ahead of you and solving it. The other really interesting experience that you and the company have had is because it's a company that's been around a long time and has had periods of unbelievable success, I think there's a long, when my team looked multi-year period, where, might have been the best performing stock in the S&P 500 for a shockingly long period of time. 25 years. I mean, that's-

I don't know if it was the best performing, but we outperformed Britchfaxon and Hathaway for 25 years in a row. There was multiple stats that were like incredibly eye-popping, which obviously has a certain feeling to it going through that period. I love to hear what that felt like. And then there's been periods like maybe the last 10 years where the entire industry, you know, of asset managers generally obviously has not been the top, nothing compared to Facebook and Apple and these other companies. managing when there's a public daily mark on your stock price, it just has to impact how you think

about managing the team and the motivation and the narrative. Just talking a little bit about contrasting those two periods of just being literally number one for a long period versus not necessarily being number one. Your stock has a currency with your employees. So when it's doing really, really well, it's in itself, it helps you a lot of retention. But it also, the one challenge is with that is that you're trying to manage the growth. So you're just trying to keep everything going together and band-aiding certain things. And you don't address all the issues because you don't want to lose the momentum on the growth. But I think that's a challenge. When I joined this business in the 1980s, I think the average asset manager was at 26% return on equity. It was just a great business

to be in. You just had to be pretty good. You didn't have to be great. And you didn't have to be really, really tough on making sure you were efficient and how you were improving your business. And then when things turned and the business got tougher, we had to wake up and say, okay, do we have the right talent? Are we doing the right processes? How do we improve this business? We've got to be more efficient. And those are tough times. Those are times where you're managing out long-time loyal employees. Those are times when you're having to face that maybe you weren't as smart as you thought. You were just in a great industry. And you had to really face and honestly face what you needed to do to improve the business. I like that honestly

face concept. There's that old saying, like, if you always know an A player, you kind of always know a C player, the B is the thing that's kind of hard to figure out. How do you manage those sorts of things, whether it's opportunities for M&A or within the business or strategic priorities? How maniacal are you about prioritization and strategy and just focusing on the best versus spreading the team too thin, given how many different things you do? I think that's always a challenge, especially right now, there's so many initiatives that you can get excited about and do and trying to figure out how to prioritize when we all have to be realistic that we don't know which things are going to ultimately win. In some cases, you just give a little bit. It's spreading seeds and just

seeing kind of what grows. In other cases, you're saying I'm going to really focus on this, put my attention here and see it because I'm betting that this is going to be a winner, but I'm not betting so much that I'm going to completely close down something over here. And I think there's times in the business where you feel that technological disruptions such that you have to have more seeds that you're willing to spread. And other times where it's clear what the focus. For us, we knew back in 2018 that the industry, there was greater and greater allocations to the alternative space. So we knew we needed to acquire managers because that's a really hard thing to do as far as to organically grow it. But it's also really hard to buy.

There are tough properties to get. So there, you're focused on making sure that you had to, you had to win there. How much time do you spend on other things like building fintech capabilities that support our advisors or the work we're doing in blockchain and other stuff like that. Those are more, you're almost planting seeds around there because you don't know what wins. Why is it hard to buy those kind of alternative type asset managers relative to maybe a traditional asset manager? Let's just take private equity for a start. Chances are the people who are managing it know a heck of a lot more about the business than you're ever going to know and know about the holdings in the business. And you have to ask yourself, why are they selling it?

So if they're suddenly selling it and they want to be out or they're willing to stay, but are they really going to be engaged? Because it just made a huge amount of money and are they going to stay engaged? And so you're trying in that process to assess and you hope to build it where they get some long-term benefit by being engaged. But what are the motivations for selling? And can you, because you're really in this business is a people business. You're buying a team when you buy a company. And so can you keep that team really engaged? This may be a dumb question, but even the word alternatives is somewhat confusing.

The only thing I could say that's unifying about them is like a fee structure, it seems. What does alternatives mean to you? Why is it an interesting category? It's more private assets, not treated in a more public form. I think that's how I think of alternatives. And so this idea of the Empire State Building analogy is a nice fun one to toy with intellectually. Do you think that that's the fate of all of these things, that in some way, shape, or form, like the trend is just going to be less frictions, more liquid,

more frequent marks for effectively all assets over time? Well, I think large institutions, big sources of capital, big sovereign funds and others, they don't necessarily need things to be tokenized, although I've talked to some of them that are already thinking about it. So especially if you have government assets that you ultimately want to privatize tokenization is an interesting way to approach that because I just think that ultimately blockchain is a more efficient kind of back office. Again, this assumes everybody's talking to each other and using the same protocols. I mean, is really hard to do. It's sort of like you have all these people speaking all these different languages and you say, well, we're going to get to a universal language. There's a lot of friction

in stopping that from happening. But I also think that people are genuinely motivated. I mean, just take private equity versus public equity. You're seeing companies wait much longer to go public. Frankly, there's a lot of regulation around going public. And there's so much money in the private space that companies are saying, well, I can wait out a little bit longer. But then what's happening is that real growth project during those early years is captured in the private markets, which right now is not really accessible to the average 401k guy. The average American who's putting their money away from retirement isn't capturing that growth cycle that used to be in the IPO and mutual funds all the time that they would capture it. And so I think there's a real feeling that we have to figure out a way

to democratize really these private assets. Any of us who got in this business, for us as a mutual fund business. Why did mutual funds get created? They got created because there was a period in the 20s where only the rich people could go to the equity markets. And people said, that's not fair. That's bad. Well, we're seeing a similar type of thing with the alternative space where private equity is only available for qualified investors. And real estate investments are only really available for accredited investors. And so I think people are looking for vehicles that help us to access that. because there's a real genuine fear about the retail consumer tying themselves up in an illiquid asset without understanding the nature of that risk.

I'm a big believer that the 401k plan is a great way to do that and kind of managed accounts because you can allocate a percentage, a professional manager can allocate a percentage. They have information around your demographics and they have a lending facility. If the person really hits a hardship, it's already built into that mechanism. your mention of the sovereign wealth fund and kind of this whole discussion brings to mind the nature of your client. So with 1.6 or whatever trillion of assets, I'm sure you have a client in strategies of literary every type from the biggest sovereign wealth fund to the tiniest individual. How has the nature of that mass, that client base and its composition changed across your career?

What are the relevant trends you think in how capital is pooled and becomes your client? So, I mean, Franklin's history was much deeper on the, retail side. Leg Mason was much deeper on the institutional side, and so now we're 50-50. But I do think that what happened is the institutional side became more sophisticated earlier on really getting under the covers of risk and understanding attribution of portfolio returns. And the retail side sort of followed along. It took longer. Nowadays, it's a very sophisticated process. Any retail consumer who's going through a platform where there's a gatekeeper, or who's analyzing it is getting the same type of professional review as any massive, you know,

a trillion-dollar sovereign wealth fund. But that was an evolutionary process. And then, as I mentioned, vehicles, I think vehicles are really more about the end client and what the end client wants to receive their capabilities. And those differ depending on the type of client. In the world of asset management today, what do you think is under discussed? Like, what are we not talking about or thinking about enough, given the circumstances we have today or the operational? opportunities for the future. I'll tell you what I think is, again, back on this point of how do you democratize alternatives because of this really excess illiquidity premium that is received today in those private markets. You have that and a narrative around fees, fees, fees. If you're going to

capture that excess illiquidity premium, and I'm saying it's excess because I think it's been really high for the category. And you're only going to, and your first decision in selection is fees. there's a disconnect there. I don't think there's enough conversation about how we can get comfortable and you just take a 401K plan. You know, if you're an investment committee, you don't get in trouble for going passive and going with fees, but you do get in trouble if you go with a higher feed product because you genuinely believe you're going to get higher returns and then either it doesn't quite return or people say, well, you still pick too expensive a one. So there's got to be some sort reconciliation here between those two things. It's so interesting how most markets have market clearing

prices. And in asset management, there seems to be just a couple fee models. The very best are two and 20. Others are still two and 20, even if they're not nearly as good. It's sort of an interesting strange feature in Renaissance is 5 and 50 or whatever they charge. The tail is the outlier. But it's a really interesting, really interesting point. I'm curious as you look around, not just our industry, but just your peer set, who the other leaders are, it doesn't even need to be leaders, just other people that you've gotten to know that you've been the most in awe of. I'm very interested by this word awe, where you've seen somebody do something that just blew you away and what you learned from it. Any episodes pop to mind with that word awe?

Kathy Wood, what she built at Ark, just because I grew up watching my father built Franklin Templeton. And I've called Kathy one day and just introduced myself and I said, I just want to congratulate. I'm a daughter of an entrepreneur. I mean, my mother sewed the curtains at Franklin. We ate spam once a week and drank powdered milk while my dad was scraping money away to invest in the business. And I attended Franklin's first billion dollar party, which I was in college. I mean, the company was set up in 1954. And so to build a business today in this mature industry from scratch, kind of approaching different model, I just have a lot of respect for what she's done now.

She's hit the timing exactly right as far as the momentum for growth opportunities. but there's a lot of people with similar growth and haven't been as successful as she has. She's been incredibly audacious, kind of in every way. And I think catches a lot of flack for the degree of her audaciousness. What most specifically about the story is the most interesting. I've had her on the podcast, too. You can see why it's worked. You talk to her and back to your peas at the beginning. She has the peas in spate. People may disagree with her investment decisions or her strategy. The scoreboard is that it's worked. Yeah, maybe say a bit more about how this has been possible for it. It does seem just like an insane. Now you look back, it's almost like bewildering how

fast it's grown. I think she has a lot of risk in it. I do think that there's a big concentration in those big momentum stocks. But I think she knows how to capture a few trends, social media trends. She's a dynamic speaker, her approach to kind of be on bundle research. I'm not sure I agree with everything. But it doesn't mean I don't respect how she's really done it. I think it's just been impressive. And I have tremendous respect for her, as I said, in building a business again, having seen somebody struggle to do it. It's never easy. How do you run a great board meeting? Well, first I don't have to since my brother Greg is the chairman.

I just, to be honest, I actually think a really important thing is getting the right board from. And that's having people with, again, this is putting together the right team. So it's diversity of views. It's some industry experience. It's external industry experience so that they can bring in learnings from other industries, a willingness to speak up, challenge the CEO. challenge the company's strategy, but also be supportive. There's a right balance between challenging being supportive versus derailing a strategy. And then what's the board's number one job? It's picking the CEO. So you've got to stay, make sure you're communicating well with the board and keeping them

up to speed on everything, no surprises, getting their advice. You want to afford that you actually value the people's advice, which I do. You've mentioned meetings a few times, specifically not having meetings for meetings sake. Daniel, like at Spotify, has said, me a few times that a lot of what he does is think about how to improve the quality of meetings, since it's basically all he does, right? Just go from one to the next. So say a bit more beyond just the board meeting, your brother's running that meeting, but the ones that you're running, what have you learned about running an effective meeting?

There's a shockingly little amount about this in the world, given how much time we all spent on it. First of all, know what your objective is. Why are you in the room? And by the way, everybody in the room who is just listening probably shouldn't be in the room. They should just get an update later. That's one. Everybody in the room should be contributing in some way.

And then most importantly, no meetings after the meeting. You don't get to walk out and go start complaining about what you think was a dumb decision that you didn't speak up. You shouldn't be in that meeting if you're not speaking up. And so it's something I talk about a lot. There's no meetings after the meetings. We are going to have it out right here right now. And I can be very strong and opinionated.

And so sometimes I have to sort of say, Jenny, don't speak up so much. Make sure you're hearing everything. thing. But I also expect my team, well-paid executives to speak up. Then whatever we decide, or sometimes, as I said, sometimes I have to decide, you want them to support it going forward. You gave a pretty specific percentage pie earlier of the idea of way to allocate your time. Beneath that pie, I'm sure there's tons of tactical strategies, decisions, whatever, that help you better manage your time, which of course is the ultimate resource. What have you learned there just in general about managing your time as the leader of a public business,

given that you have sort of a general strategic framework that you already laid out? What have you gotten better at over time about just managing your time and your schedule? The difference between even being president and then becoming CEO, it's amazing how many more people when you become CEO sort of suddenly reach out, right? And I was always so good about being pretty open door and trying to be responsive. And you start to realize you just can't be that same accessibility as you used to be. And so it's trying to prioritize more to the ones that you need to be doing. right now. Is there anything that stands out as the thing that usually puts something higher in the

priority level then? Like, how do you stack rank things? There's no question. Clients, clients, I think one of the most important things I can do. I'm not an investor by background, so I got to rely on those people and make sure they're doing the right thing. And then if any way, I can be helpful communicating with clients and let's face it, that's where you learn where the trends are. It's what's on the client's minds that's going to inform you where your business should be going. So that always gets for priority. If you were to take your own personal highest abstraction version of purpose, one of those four original P's, what does that mean to you?

Like, what are you trying to do? What matters to you? Literally, if you think about what we do as a business, we're helping people solve the most important goals in their lives. So what are those goals? Well, okay, retirement's in obviously. And we all talk about retirement. That's fine.

How about helping your kids get a college education, making sure that they're not going to sit there for the next 20 years when they graduate trying to pay their. themselves their debts of being able to add to that, or you have a special needs child, and you are fearful about there not being enough money to take care of that child when you're gone, the realities of people's lives, or you worry about having suddenly an illness that impacts you or a family member and the overwhelming medical bills that can come with something like that, thinking about how you're one setting up yourself from a financial insurance and other things on medical, but also having to be able to supplement your income to make sure you have

enough prepared for those emergencies. That's what drives me every day. These are real concerns for people. Can they buy a house? That's an American dream is, I think still, even though we said the millennials have not to do it, but I think they're starting to, as to buy a house. That's a really important kind of milestone in people. And that's what we do every day is we come in and we try to create products that are in communicate appropriately, carry that responsibility every day of trying to do what's right. How do we penetrate deeper to make that idea of, you know, of, I think, the upward mobility and the goal achievement that investing unlocks. The data is the data, like investing in equities or 60, 40 portfolio has been a phenomenal way to achieve everything you

just described. But obviously, there's a whole category of people that never get on that train. And that seems like a huge problem, too. What do you think about that? Have you seen progress? Like, what do we do? Yeah. So here is where I think this gamification cuts both ways. So first of all, if you from age 25 to 35, those 10 years, put away, let's say, $5,000 a year, whatever the number is, and you get a 7% return, you will have more money than the person who puts away for 30 years from age 35 to 65 and gets a 7% return. Like, just think of that. How do we get 25-year-olds and 20-year-olds to start saving just so that the compounding effect will help them on the return? retirement. And so I think if there's anything we can do, it's getting people to start investing earlier. And that's where I look at some of these things where you have the fintechs that round out the purchase and put some money in savings and whatever it is to engage people, whether it's a gamification, just because once they start looking at it and start to see the compounding, then you get kind of excited about what it can be.

I think that's a huge area of opportunity for the industry, is figuring out how to get people earlier. I so struggle with this because I literally wrote a book called Millennium Money that was all about young people investing earlier in the power of it many years ago. And it did fine, but it certainly was no bestseller. And the logic of the message was right, but it's not exciting. Meanwhile, Robin Hood launches and say what you will about Robin Hood. But the fact is like a lot more young people own stocks as a result. It is like a paradox for me that I don't think it's the right way to invest. But it's hard to argue with the on-ramp that it represents.

Exactly right. And what you hope is that you could pivot them once they're in. And here's the problem that my dad used to say this about. I remember at the peak of the dot-com bubble, somebody asked him what his biggest worry was. And he said, if the market tanks and turns down, you lose investors forever. They don't understand why. And they stay out of the market forever. And he had used the example of the nifty 50, which was the pharmaceutical similar type of rocket ship of an equity market for pharmaceutical companies. And then they blew up. And so when you see things like this, you know, kind of GameStop and where everybody sort of piles in to support one stock, you know, the memeification of this, you do worry that as people get in late and then they lose too much of their savings, they realize, oh, wow, I don't actually get this. And so you worry about the burn side of it. So at least with a robo, you're getting some amount of structure around that. But you do hope that over time, it's much more about financial planning and thinking about what are my individual goals. What are the other favorite things that your dad has taught you?

Persistence, persistence, persistence. You know, he's got the Calvin Coolidge quote about persistence. And his attitude of never giving up is the difference between success and failure. How would you describe him to others beyond persistence, like what adjectives would you use? Let me say, my father has always said, take care of the client and the business takes care of itself. And he has meant it through and through. And I think you find that anywhere you go in Franklin Templeton, that that was kind of a top down. My fire is one of the kindest, most understated people.

You'd walk by him on the street and you'd never know him. He's just genuinely a kind person who every year, he'll, family has some season tickets to the San Francisco Giants. He makes sure that he's got this shoe shine guy getting him his tickets to the game. And he's just very thoughtful and good man. What are the benefits of being understated? that's not an adjective I would use to describe some of our most famous people these days. You know, I don't know if it's a benefit in one way or the other.

I think having somebody who recognizes that every take at Franklin Templeton, we talk about this, every employee carries the brand on their shoulders. So think about Patrick sometime where you had a bad experience when you called in to return a shirt that you bought or whatever. And you were so frustrated. And you said, that company stinks. Like that one person, you don't even know they went out a bad day. That one person carries that. And I think my father recognized that and treats every employee and has taught all of us, my brothers, me, all my siblings work here, the management within the company, that we are people business and everybody matters who's part of this business. And everybody carries the legacy of the firm on their shoulders.

Wonderful sentiment. What about the future has you most excited? That's intentionally a vague question. Doesn't need to be within the business. It can be within the business. What has you most excited about the future? Well, I have five kids. So I'm really hoping that one day I get grandchildren, but there's no there. So I guess that one seems so far off. I get to think about that. It's a challenging time in the business. It's kind of a crazy time in business, but it's an exciting time, too. If you got the resources we have at Franklin, what I think is the right set of capabilities for this next decade. And I'm just honored to be leading the company in this time. And so I'm really, really fired up. change and opportunity. Go hand in hand. Not easy, but full of opportunity. Well, Jenny, this has been so much fun. A total blast for me to hear about your personal history and lessons and everything we've talked about. I ask everybody the same traditional closing question. What is the kindest thing that anyone's ever done for you? During the hardest times in my life, when friends reached out and just knew that you needed them there for you. And I just, I have great friends that have been friends since high school. And,

and have been at the very difficult times, have always been there supporting. And I hope they would say the same to me, that busy can't always be there, but boy, is there when you need her. I mean, write a book someday that categorizes all these answers. We've gotten 300 or something of them. And showing up is like a major category for sure. So love the answer, wonderful place to close. Jenny, thank you so much for your time.

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