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Alex Deal, Paul Sweeney. We are live here at our Bloomberg and Active.
You know where we are.
No, we're not, Yeah, yeah, we are messaging. We're broadcasting live from the Wells Fargo Women in Leadership Summit at Kea Island, South Carolina, where they've gathered prominent women in leadership to engage in meaningful conversations. So we've had the benefit of chatting with a lot of those leaders here, both Wells Fargan from some of the other organizations gathered here.
So we have some good conversations. I'll tell you. The other story of the day here from stock perspective is Morgan Stanley's John Tucker was just reporting some really strong numbers. I was looking at the results. I mean it was like the advisory business did well, the capital markets business did well. The wealth management business, which is such a part of that company, that did well. So the stock's
up seven percent of fifty two week high. How about that, Alison Williams, she joins us She's covered Morgan Stanley forever. She used to work there back in the day, so she knows this company better than anybody. Allison. Was it as good as it appeared just reading through the you know kind of the report. It was good.
But I think the real, uh, the real number that's giving investors confidence in our opinion, you know, is the wealth flows. So we've had some some uneven flows. Last quarter was was relatively weak, and I think the rebound this quarter maybe instilling a little bit of confidence. As you know, they are strong institutionally, but they have shifted their business over time to this, uh more towards the
wealth business. Gorman had sort of put some aggressive targets out there before handing over the rains hits head pick and.
So and so.
To be clear, they really, you know, beat the numbers across the board. It was led by the institutional business. The equities trading business, in which they're relatively more skewed, did very well, partly because they are skewed to that business, and they did outperform. They had the best growth in trading and fees across the big sixties US banks, so upset across the board, benefiting from their mix, benefiting from
their performance. But the wealth flows are really what the focus is for investors also because stocks are aiding their asset values, aiding fees and so that pre tax margin in the business. The other key metrics also doing better.
Allison, how much can we expect the wealth assets to keep growing?
So, you know, that is the multiple trillion dollar question. That is one of the aggressive targets that was put out there was to you know, sort of aggressively grow those assets, and it did seem like there were some pretty healthy market gains priced in. So the markets are delivering on those gains certainly this year, and the flows are also helping. But you know, we would want to see a couple more quarters of evidence that you know,
they've really built the momentum there. We would expect mortgage family to have a strong quarter in wealth this quarter, just where stocks are. I mean, the global market cap reached a record high according to Bloomberg data at the end of the third quarter. And I would keep in mind that the pricing of those wealth fees really relates to the beginning of quarter value. So that's helpful for
the bank for the fourth quarter as well. But you know, to your question, Alex, when we're thinking about the overall franchise and we're thinking about the growth, we should keep in mind that there is a big talent to the business this year from markets, and to some extent, the future growth is sowhat dependent on that.
It just seems Alison, as I kind of read your research and yeah, I know, you guys have great data on market share across all business lines, it just seems like Morgan, Stanley, Goldman, Sachs, JP, Morgan, they're just kind of running away from everybody else on the planet. I mean, is that in fact the case they have been?
And you know, whenever we expect you know that like okay, who's gonna who's left that can you know, blow up that's a technical term, if you will, and see some more share to these banks who are kind of running out of names. But if you think about, for example, what's happening in prime brokerage, right, so a lot of these larger institutional hedge funds that have you know, sort of these multipod shops, et cetera. To the extent that
those bigger firms are gaining assets and doing better. That's benefiting you know, the leaders Morgan, Stanley, Goldman and JP Morgan, And so as the bigger clients get bigger, that's helping those firms as well. Within the trading business. The other thing I would point to is, you know, the investments in technology. These companies have made the investments in technology, and that's also helping them to win share in the trading businesses.
I'm gonna steal Paul's comment slash question from earlier in the show saying, what does this all mean about the European banks? And are the US banks eating their lunch or is the lunch being spread around?
So I think for this quarter the pie is getting bigger. So you know, in terms of whether eating lunch or pie, you know, the US banks have been gaining share against the Europeans for many many years. We think that does continue, but we think the pie is also bigger this quarter. And what we heard specifically was, you know, for example, JP Morgan, strength across regions, and what we heard from these banks was strength across derivative, prime and cash equity.
So it is really broad based. The other thing that we think is notable for for UBS in particular is the strength in Asia. So not surprisingly we saw a pickup in activity in Asia that really benefited the banks, specifically called out by JP Morgan and Morgan Stanley. We think that that is really going to be a help to ubs.
So how about on the cost side, Alison, was there any discussion about compensation? I feel like that's been less of a discussion. Point is I guess Wall Street compensation has become a little skewed, a little bit more towards the fixed and a little bit less on the variable.
Yeah, so there's that element of it.
Paul.
You know, the two things I would point to is keep in mind compensation is a cruel, a cruel through the first three quarters, So to some extent it represents the business trends, and to some extent it represents how
they think the full year we'll shake out. Secondly, you know, compensation for the investment banking fee side of things sort of was stickier than we would have expected on the downside, and I think that's because there was such a scramble to higher town in twenty twenty one, and investment banks have been talking about a recovery in that fee business for several quarters now, and so I think they that that COMP didn't come down as much, so there might not be as much of a search to the upside.
But if we looked at costs, if we looked at COMP, you know, in general the profitability was good just because the upside to revenue was so much. Now, is that because the investment banks are keeping conservative and going to see how the fourth quarter shakes out in terms of the accrual basis?
Is part of it because of the.
Stickiness as I mentioned, But you did see COMP coming in sort of above estimates, just not as much as the revenue upside.
All right, that's another good news for investors in these big investment banks. Alison Williams, thank you so much for taking the time even so helpful today and then really are the last week or so as she always is a record on these big banks report because our viewers, our listeners really want to get the latest on what's happened with the global of Wall Street, and Allison is the best out there. Alison Williams and Bloomberg Intelligence senior Aniold.
She covers the global banks and SAM managers giving us the delay of the land on lorg Sally again a blowout quarter in the stock, hitting a fifty two week high. And you know in these big banks, investment banks report earnings the next day, what do they do? They go sell investment grade debt in the parkplace. And that is happening.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Apple car Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa playing Bloomberg eleven thirty.
All right, we're broadcasting live from the Bolls Fargo Women in Leadership something in Kiwa Islands, South Carolina.
You know me?
Well done here? Interesting? Oh yeah, I've been here once?
Is that why?
Yesterday so Wells we traveled.
Yes, exactly what happens. That's HAPs when you don't fly private.
Ah bummer, Yes, exactly, Paul's private was not working there.
Daniel Squier's joint sess Managing Director and head of Diverse Segments at Wells Fargo, and Maria Menendez, a chief financial officer at g L Homes of Florida, down in Sunrise. Thanks for having us here. We appreciate it. Danielle, talk to us about what you guys are trying to accomplish here at this conference. I see, you know, a couple of conference rooms full of people. You guys are engaged in some big conversation. What are you trying to accomplish here at your conference here in Cuba?
Awesome?
Well, first, i'd say, Paul and Alex, thank you so much for joining us here and for having Marie and I on this show this morning. And two quick things, Paul, just from what you said before. One, I'd like you to know that I would also take the journey in that truck.
I think that sounds really awesome.
And two, I know First Union wheat first very well, having been with the company for twenty five years. So but with that, it's just such a wonderful event here are women in leadership sum. It is really a chance for all these women here today that come from various industry across the financial and the economic and the business space to really connect, to learn and to grow right.
Come here, get great content, make connections that they otherwise wouldn't make with each other, meet people in different spaces and circles, and really go out and come back to their companies, come back to their communities and say, this is what we can all do together, so promote them as leaders and then also have Wells Fargo play their part in making that happen.
So, Mario, what have you gotten out of it so far? We are you looking forward to get out of it?
Well, I've really enjoyed meeting people outside of the industry we have. The circle of home building is very tight, so I've met people in other aspects of real estate as well as other functional departments and areas that are not just in the finance area. So that's been great, and I'm just looking forward to the next couple of days and getting to meet everybody else that I didn't get to meet at last night to great dinner.
It was lovely, great weather, yeah.
Exactly beautiful down here, folks. And if you haven't been to Kiwa, it is And if you kind of like the game of golf, it's fun. But it's the low country down here. Love it, this whole South Carolina kind of North Georgia. It's awesome. There's unlike any place else. They're deer here everywhere, dear like deer, and there are property humongous bugs. I'm just saying I or may have seen a few of them this morning in the hotel room. Mari, you talk to us about your business, talked us about
the home building business. It's we hear so much about a housing shortage and housing affordability problem in this country. I'm not sure necessarily how we got here, but boy, you were here. How do you guys think about your business? Tell us about your business.
Well, you can debate how many million, but the truth is there is a housing shortage, whether it's two million or four million. We are a very niche builder. We build only in Florida. We've just been through Hurricane Helene
and Hurricane Milton, and we've come through it beautifully. Unlike what you see in the news new construction away from you know, the coastal era is very different when you're ten fifteen miles in and the home building industry, you know, like Wells Fargo has been with us through when we were a couple hundred million dollar company to being a two billion dollar company. So home building has gone through,
you know, periods of normal growth. We survived the Great Recession and the frenzy that it was, the pandemic and post pandemic, and now we're hitting kind of a normalization period again. Interest rates have finally made the FED has made the first cut. Of course, that cut impacted bed funds rate. It's not the third year thirty year mortgage
rates because people keep on making that connection. And of course that runs off the ten year treasury because that's kind of the normal life of somebody in a home. But what it did do is psychologically it's set the
stage interest rates are coming down. We don't know the pace or the how quickly that if those are going to be twenty five basis point fifty, But what it does do for the home building industry is it says at some point that spread between the ten year treasury and the thirty year mortgage rates should normalize from being instead of being a one and a half percent to two percent, now that it's almost two point seven two
point nine. So as demand comes down, the certainty around rates comes down, we'll see interest rates come down on the mortgage rates, and I think that'll be a period where we'll be able to see affordability come back a
little bit. And it'll also take those people that are in that three percent golden handcuffs kind of mortgage and let them start thinking about Okay, maybe if rates are five and a quarter, five and a half, five point seventy five, I finally start making that move and they puts more houses into the market.
So talk to us a little bit, Danielle about the relationship that you guys may have, you know, taking a company from you know, two hundred million dollars the two billion dollars, Like, what does that relationship look like?
How do you support it?
How do you have like the faith that it's gonna work in that relationship?
Oh, I just appreciate that question so much. For first of all, working with Gil Homes and somebody like Marie, it's easy to have the faith because in addition to faith, you've seen the execution, You've seen the impact that they can have, and it's a fabulous business. I think also if we take a little step back, think about just what the role of women in business today, it is certainly grown, it continues to grow.
It is our future.
And I think some of what we look at is if you looked at between twenty nineteen and twenty twenty three, women own businesses, we're growing at more than double of other businesses that we're starting, and that number has just continued to grow and to expand.
Over t Why is that what? Why do you think that happens?
Well, I think the power of the purse is changing, and I think it's one of those things where we take a look at and say, these are amazing people who are now in the right spaces, in the right places, with the right support, right talent and prowess and engenuity.
We're never lacking.
It was opportunity, and so now that there is a focus on opportunity, there is a focus on how we as a firm and many financial firms can support these businesses and growth from the first inkling of an idea right in our small business space and our ingenuity and our accelerated programs all the way through how we work
with them. In our commercial real estate. We are fortunate at Wells Fargo to be the number one platform in commercial real estate, and as such we have the ability to look in each and every one of our markets and say, where can we do more, where can we better, how can we push the system, and how can we be responsible around that. Maria and her company are just a gem of the companies that we work with. Looking
at being value. Add having the right people seeing trends just I think it's constant communication with.
Right I think what's one of the things that Wells Fargo's done really well is we are a family owned business, so they know not only the finance team, but the ownership. They know our CEO, who's a woman, and they know our chief marketing officers and women. They make it a point to go out to our communities and meet the people that are actually excavating lakes and doing the construction and viewing the product and viewing our clubhouses. So it's
a it's a very collaborative kind of growth. So they've seen our growth and they have been really into our culture as well as our business model, which is very different from a large national homebuilder. So that kind of collaboration is what made it. It's great for two and a half decades.
Two and a half decades interesting Daniel's and Dukeratz and that's one another reason. But that's it. I think for the rest of the day, they're Carolina people coming through.
Oh, I'm so happy you said that.
Carolina people will far I get the whole Carolina thing. It's tough stuff going the real estate business. Is tough enough Florida. I mean, every time I turn on the news, you guys are rebuilding in How do you deal with that.
Risk day to day?
Well, one of the things, I mean, Florida's hadmendous growth. You know, during the pandemic, We've had so many people come into Florida. But the fact is new communities aren't really like our communities that are single family home communities a couple hundred acres. They are not built on the coast, so you're ten to fifteen miles inland. Some storm surge,
it's in an issue. On top of that, you know, finished floors are eight to twelve feet in Tampa, they're sixty feet above sea level, so flooding is not an issue. Then you've got concrete block construction, the latest Florida kind of building code. It's impact glass and tremendous amount of focus around water intrusion. So my heart goes out to everybody impacted by Helene and by Milton, and you know, the devastation, it's super scary and the preparations are important.
But what you see in the news of the coast and older construction, it really shows that where you live and how the home build is different, and I think what we'll see in home building is people moving to new construction.
Because of that, Danielle, I wanted to talk to you more about how the relationship that you may have with women business owners changes as the business grows. Right, So Maria was talking about how they went from a couple hundred million dollar business to a two billion dollar business. What does that mean that they ask of you?
That's different?
So you know, we're really fortunate as a company to have such talented people who work with all types of companies, different shape, sizes and industries. And so we have actually a platform where we have a head of diverse segments both for our consumer and small business banking, for our commercial business banking, for home lending businesses. So think of the mortgages that we do for a wealth and investment management platform as well as corporate and investment banking.
And really what we want to see folks is.
Sort of their ability to travel and swim throughout all of the offerings that we have at Wells Fargo and wherever their need is, we can meet them. So if we have a client who's looking for their first credit line ever, right, we can work with the small business administration. Well, I love to say that small businesses become big, great businesses, and so the needs are different at that point in time, Right, the facility sizes get larger, the way in which they
issued at might get larger. And then imagine the founder of a company after six, seven, ten years has.
The ability to IPO.
What I really love is that one we can meet all those needs too, we can advise along the way. And three to watch generational wealth grow. That has to be one of the most rewarding things to see, especially women in business, as they learn, as they grow, as they execute and achieve. It's actually an honor to be part of that. And I think we can along the way. Yeah, that's nae Eryria at.
Your company gl homes here he talks about it. I mean the growth you guys must be dealing with it. We think about South Carolina, Georgia, Florida, Texas being these great growth markets, which they've always been quite frankly for the forty years I've been in investment bank business. That's where the growth has been. Then comes pandemic and then it takes to another level.
Yeah, it explodes.
Talk to us about the last four to five years for you guys, How is your business change, How is your planning change? How is maybe your banking needs changed?
Our business has changed dramatically. We went through some really difficult times. Getting a house built during the pandemic used to took six to twelve months before and it could go from nine to eighteen months. And now we're seeing it kind of come back to normal. You know, supply chain issues have kind of normalized. But during that time it was kind of all hands out deck. We reached out to like Wells Fargo when the market was struggling
in Florida. You're you're building a million dollar homes, So we reached out to Wells Fargo and said, we need help on the mortgage side of the equation, particularly for jumbo loans. So we reached out to all of our contacts. We actually grew our facility from being you know, we were in bilateral agreements. We have now a corporate facility and Wells Fargo helped us with that. Grew three hundred million dollars during the pandemic, and it's just, you know,
a very different business. Also, demand is really different and trends changed a lot. We went through a period of time kind of pre pandemic that everybody wanted a media room, designated spaces. During the pandemic, they was like, I need flex space. I need to use it for yoga one day. I need to use it for an office for a different day. People were home more, laundry rooms got bigger, kitchens got bigger, and now they're kind of coming back to like maybe even formal dining is coming back a
little bit. So the product changed a great deal and what people wanted in the communities. The pools had to be bigger, the dining had to be bigger, the outdoor had been you know sports. We went one community as thirty seven pickleball course.
Oh my god.
Yeah, and they're building fifteen more and Padel's coming on. So the activities that had to be provided are completely different. So it's about knowing your customer and what they want.
So when you have to grow that fast, Maria, what's the biggest struggle in growing that fast and having to pivot that quickly.
It's getting people trained and inculcated in your culture or a very detailed oriented company privately held. One of the great things about Wells Fargo, Danielle talked about an IPO. If you also say I want to own this in my family for next ten generations, Okay, we're there for that, and let's let us help you with that. So it's
really getting people trained. There's such a shortage of plumbers and electricians and getting out to people, getting the trades kind of up and going and getting the training done. Those would be really great women owned businesses. I'd love to see more women owning them because they're kind of detail oriented to scheduling the details of what the work
needs to like reaching out to the customers afterwards. So it's just getting all the trades up, people internally trained to do higher volume because you went from maybe had to help start four houses a week to happening start twelve a week to meet demand. So it's just the ramping up is just an immense effort.
Danielle, I've been in the financial services career all my life. In diversity has always been, i would say, challenge on Global Wall Street. What happens I've seen in managing businesses. The incoming analyst class, the incoming associate class is diverse. Every box is ticked, every boxing tick, every year at every firm. Seven years, eight years later, it comes to the managing director of partnership discussion, it ain't so diverse anymore. What happens.
You know, It's interesting because they used to talk about sort of the off ramps and on ramps that people see both because of what's in their lives and potentially as people grow and the opportunities that are afforded to them. And I can say what I'm really proud of at Wells Fargo is that we actually focus very well, very specifically in on that how do we keep people excited, energized,
and growing. And it's equally as important to how do we keep you doing exactly what you want to be doing and what you're good at doing, and sometimes that
means moving within. So some of the programs that we have from a D and I perspective are some of our sponsorship program, some of our you know, our Building Organizational Leadership Diversity or BOLD program, which really takes different leaders across all of our bank and puts them in a development program and something that we've been running the last few years with a great success from a promotion perspective. But what I've also say, I'm really proud that we've
also been successful in a lot of ways. And so if you look at and we were talking about our real estate business again being number one, Karen McShane is a phenomenal woman also a Duke grad to throw it out there, who actually runs that business right, And so that's a powerful platform. Our co head of Equities who is moderating a panel with our women in leadership today at Wells Fargo, Judith Barry. We have the co head of our equity capital Markets is chill Ford. Fifty one
percent of our employees our women. Our board is made up of thirty percent of our Board of Directors or women, and twenty seven percent of our operating committee. These are the people who report directly to our CEO. And then forty one percent of all executives at Wells Fargo are women. So Paul, I'm happy to say that trend is moving in exactly the right direction.
To then Mary, but both of you guys, when it comes to diversity, how do you on Wells Fargo, how do you help housing affordabilities? Danielli's start with you and then Rio, I'd love to get your thoughts on that.
So housing affordability is obviously a great one concern of ours and a great focus of ours.
Especially how you build well like that's a really it's a huge way to.
Do the single largest component and it's it's something we focus on both from the foundation perspective and we do it actually in the whole ecosystem, so both for people to afford it, right, the ability to understand what a credit score is, the ability to understand how we grow the credit score, to the ability to understand the mortgage process.
So that's all at one stage.
What we've also done is actually work with diverse housing developers, right, So how do we get more diversity in the housing development space? How do we get more diversity in the housing appraisal space? So think of a giant circle in an ecosystem. We actually have to attack every single piece of it.
Right.
How do we support the consumers as they grow for the wealth. How do we help build more affordable housing. We have an amazing Vanessa Rodriquez as a woman who runs our affordable housing and community lending and investment. How do we get more money into the cities, into the
states where affordable housing needs to be built. How do we get the hands and loans and financing into those of the diverse developers and then how do we have summits like this that connect people Because what we can do is a lot, but what we can all do together is far greater, and that's the real answer, And so how do we get everybody together? Affording affordable housing is something we're actually one of the leading lenders on and that's something we're going to continue to focus on.
Yeah, when you think of affordability, it comes with a lot of different shades. There's workforce housing, there's affordable housing, and there's market housing that's on the lower scale and affordable to people that are a nurse and a firefighter. And that's about having to design product that we can actually build at the right cost. So that might mean that flex space becomes very important to them, the design might have a little less few windows than the four
thousand square foot house someplace else. So coming to design product that works at a price point, because we all can't be an affordable housing or workforce housing, there's market rate pricing that can be available at a price point. So that means that there's going to be more duplexes and villas and the whole world kind of needs to get a kind of a adjustment around density because that is one of the biggest issues that we have today.
We can build more affordable housing and things that people have afford, but we need a little bit more density, and with the price of land and how hard it is to get entitled, we really have to work toward that to find the right mix and then put the right product on it.
Guys, thank you very much for joining us. Really appreciate getting some of your time. Danielle Squire's managing director ahead of Diverse Segments at Wells Fargo and Maria Merenendez, chief financial officer at g L. Holmes of Florida Holding Corporation Sunrise Florida. So good conversation on real estate, affordable housing, banking, diversity, all kind of intertwining in there as well. So in depth conversation with good stuff there.
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We are broadcasting Alex Steel and myself. You're broadcasting line from the Wells Fargo Women in Leadership Summit at Kiwa Island in South Carolina, where they've gathered prominent women in leadership to engage in meaningful conversation, and we were fortunate to have two more of those guests here joining the stage whether us here this morning, Susanne Marson, head of Commercial Banking and Wealth Partnerships and Executive VP at Wells Fargo,
and Jessica Murphy, Managing director for the Southeast Division, Executive Commercial Banking at Wells Fargo Commercial Banking. Tommy, when I think of Wells Fargo, I think of the strength of the commercial and the corporate bank I kind of envisioned you guys talking to everybody from big multi corp multi international corporates all the way down to the small business here. So let's just start with you, Jessica, just give me a sense of I could be a successful banker down
here in the Southeast. I mean, come on, this market is growing like crazy. It has for thirty or forty years. Talk to us about the market today when we've had this influx of people even more than the usual post pandemic, We've got rates coming down. How is business? Yeah?
So I've been in my role just over six months now, and when I have the opportunity to move into the Southeast. I've thought about it exactly like you outlined, Paul, how can you not get excited about the demographics, the economic trajectory of the Southeast. Of the eight states that I'm responsible, everyone except one is growing above the national GDP level. That employment statistics are fantastic, and the business environment is very productive. We have a lot of swing states here.
We just got out of a real time political panel, a very dynamic and vibrant part of the economy. And then to where you started. With Wells Fargo Commercial Bank, it is an critical and thriving part of our franchise. We intersect businesses about twenty five million in sales or revenue all the way up to two to five billion, So one of the most exciting parts of the US economy and something we do very well at Wells Fargo.
What's the biggest question that they have, Like they call you up and be like, look, I need you to answer this. Suzia is actually and nodding, so clearly you want to get into that too.
Well, I'll tell you.
I think our clients have just a massive range, Paul, you said it. We're working with companies between twenty five million and multiple billion. They're mostly privately owned, we have an election coming up, we have potential, you know, changing economic landscapes, and so really they come to us and we just try to listen to what are they trying to achieve to grow the business, and think about their family dynamics and then try to match off no matter
what this scenario is. But uncertainty, it is hard for businesses to think about those decisions. And I think we're always trying to be really dynamic with them on how do we help them navigate that? And I think that's it's top of mind for a lot of business owners.
And one of the things that I've noticed just in my career is when you've got these privately owned companies and they've created a lot of asset, that a lot of wealth, and then they have a liquidity event, whether they sell the company or sell a portion of the company, then they don't know what to do with the money. How do you guys? Like that's a wealth management discussion, And that's what we.
Go to you, right, is that's why you straddle both areas.
We do, and we work really closely together in this in this way at Wells Fargo, and we think about clients on a life cycle, so they have a personal life cycle as they're building that business and the value and their business life cycle, and we're really focused on how do they stay ready no matter what they want to do, right, so they're prepared if it's a generational change inside in generational ownership and leadership change, or preparing
for the liquidity event. So hopefully we're having really good conversations Paul before they get to that event so that they can really lay the found work of all the planning, filmthropic trust, and a state type of dynamics that they need to think about to maximize that value for their family. So it's a whole range of decisions that they make on those events and what they do depending on their values and priorities.
And that's obviously the longer term. In the short term, Jessica, we're talking about that uncertainty, right, and the two that's going to affect small businesses are going to be tariffs and taxes. So when they call you up and they're like, I don't know what to do. How do I understand where I should be investing my money in the next twelve months?
What do you say to them, well, I think Suzanne answered it really well. It's very specific to what are the capital needs you have in your term? What are you trying to do with this business. Are you just trying to survive because you've been very impacted by say a hurricane or something, or are you thinking strategically for the future in trying to scale at a rapid rate. And the vice will be different. But you touched on taxes, touched on the election, but certainly economics is highly relevant
and rates has been the theme. So most of our clients were surprised, even though I think the fud was very clear with rates rising as fast as they did, and now turn around we've had a fifty bass point cut. Our clients are wondering is that going to continue? And how do we take advantage? And Wells Fargo we're not really in the business of predicting. We have a few people on our business that are traders, et cetera, and
they try to anticipate that. But what Susanna and I do is help people be prepared regardless, So no matter what the policy is, we want to make sure your business is successful throughout those cycles.
When I think Wells Fargo I think North Carolina, I think Charlotte, but I also think of now our good friends in the western part of the state, devastation. Devastation, I mean people moved there from all over the country because there weren't earthquakes, there weren't far as fire.
It was a climate haven.
It was a climate haven. Then they got just crushed. How did your bank respond to that, because again, when I think of North Carolina, I think of Wells Fargo.
Well, I think there's probably two ways. I'll start with just the charitable and outpouring of time and resources into the region. We have, like you said, deep connectivity. We have bankers in that community, we have people that represent it, and then we also have many people that spend vacation
and other family time there. So whilst Fargo Foundation donated over a million dollars almost immediately, we have a WEE Care Foundation where employees that were directly impacted can receive resources to combat like just the personal devastation that they've reacted to. Our ATMs have a safe and secure and no service fees donation to the Red Cross, and so I think that's you know, expected and immediate and appreciated.
But at a business level. One of the first things that happens when you have a natural disaster is you lose power, you don't have your cell service, and you immediately moved to a cash economy. And so we had a very important role in getting our own branches and employees they are safe and up and running, so that we could support the economy. We had to get cash in to have people make payroll and meet their basic needs.
But then we also have clients that are convenience stores, grocery stores, and they need a safe place to move their cash so that they can get it back into the system and account for things. So we play a really critical role in that in the communities that were impacted, both both in West Florida and the western part of North Carolina.
How long do you think it's going to take for everything to sort itself out.
Well, I'm told most of Tampa will have power by Thursday. I am not an expert. And then on the western part of the state, I mean, this is a massive rebuild, the destruction of the infrastructure of the water system. I'm not an expert here, but what I will say is there's a meaningful role for banks to play in the rebuild and to rebuild in a more resilient way.
Yeah, how do you talk to clients about how to build up their business and then monetize that wealth at the same time.
Yeah, I think it's a fantastic conversation. So most of our clients are private or privately controlled public companies. Half of their mindset is absolutely focused on growing the business, and half of their mindset is thinking about growing that business and the value for a legacy for some reason, generational transition or otherwise. And I think we just our
teams deliver in an excellent passion. So when it's business growth, we're talking about growing through acquisitions or growing organically or all of the things we'd naturally talk about with our executive teams. And then what we're translating that back into for their business is preparing for that event, right, and so what do you want to do with this great business that you have built? And we have teams oriented just around that conversation, So we don't we're indifferent if
it's an exit or a generational change. We just want them to be ready and it matches against what their personal objectives and values are to do it, and so we deliver that through great teams on our commercial bank and our great teams in the wealth platform as well.
And Jessica, when I banked the Southeast way back in the day and week for securities, again the source of your broker dealer light license. Thank you, You're welcome. We banked trucking companies, furniture companies, broadcasting companies. I think it's probably changed a lot since then. Talk to us about kind of the companies, the areas of opportunity that you guys see in the Southeast.
Well, it's changed, and it hasn't. I mean, those companies are still the backbone of the economy here. But what we have seen is our end Tree expertise in the tech sector, in healthcare, in some of our kind of other verticals have been exploding. And what we've done is try to pull all those threads together to support the economy. But certainly women led businesses, obviously this would be an
example of an event like that. In twenty twenty three, women started two point seven or created two point seven trillion dollars in revenue from businesses that they lead. So that's just that's not just in the Southeast though, but
we recently I'll just highlight a cool event. We sponsored a film called Show Her the Money, and it shines light on the fact that female entrepreneurs receive significantly less venture capital than their male counterparts, despite their very successful track record and according to a BCG study, better return
on investment. And so we show the film in a community we are in Raleigh, and we had centers of influence, clients and other important leaders in the community talk about how to address that, not just because it's a good idea, but because of the great investment.
Right exactly, it's not just like support it because it's nice, do it because it makes money. And we're going to put that out there. Suzanne, are you talking to businesses right now in terms of their long term trajectory? I know it's a curated process, but is it more private for longer?
Is it?
Is it conversation IPO? How has that type of conversation changed?
Yeah, And I think over the last decade, you know, the evolution of private equity and private capital has changed the landscape on alternatives for private business owners. But I also think even in the last five years, if someone wants to stay private for longer, you know, partnerships between family offices and investors that might have a longer time horizon. The landscape has changed for alternatives for exits or continuation
of involvement and minority fashion. So I think what we have tried to do is continue to adapt, again being very indifferent to how they want to exit, but making sure that they know their alternatives, and I think the size of the company, the industry that they're in, you know, we try to just deliver it into that conversation. There's absolutely continues to be a lot of great streamategic activity too, and so somebody's best client may be their best acquirer
down the road. And so I think the opportunity to just continue to open up for private business owners in that conversation.
Maybe just to add in because it ties to the question that you are asking. Ultimately, building a business or leading a meaningful business is still one of them to create wealth. And when women do that successfully, it changes their famili's financial trajectory, but it also gives them a platform for impact. And so we're constantly thinking of those things. And people just because they build a successful business, the families we talk to are very keen to think about that.
It's part of the family in many cases, but they want it like a child to grow up, stand on its own, have a board, these kinds of things. So that those are some of the discussions we get into.
Susan, it's head of a business here. How do you think about talent, tracting and retaining talent? Every business owner, every manager I talk to, when almost every industry that alex Line talked to, they say that as a challenge. It's not just a pandemic, it's just in general sourcing and retaining talent. How do you guys approach that.
We are a people business still. We just had a really great conversation about AI, but we also talked about the whole human element to delivering what we do across the board. Wells Fargo is invested all the way from sophomores in college where we start to take them at a very very early stage and help them evolve through their career. And we look at that, we think about all the investment in our people, because if we're investing in them, they're investing in our clients and caring for
our clients. So there's a lot of robust training programs and development that we have still continued to invest in a great deal. And then I think Wells Fargo also is really supportive of like bringing in talent from a lot of other directions, traditional and non traditional. I think that makes up and then we all kind of come together under a culture that's very very client centric and team oriented team members, so helping people grow and develop.
But I couldn't agree with you more. Our clients are focused on the same challenge on how do we grow and develop? Being in the Southeast. We have a really great presence in the Carolinas in Charlotte, North Carolina, as well as other major hub cities around the country. But not only is there a great economic region for our company to you, we're investing a tremendous amount here in people on talent in the Southeast.
We thank you both so much. It was a really great conversation. Thank you very very much, Susanne Morrison, Executive vice president, head of Commercial and well Partnership and Jessica Murphy, Managing director of Southeast Division executives for talking through that relationship with commercial banking and private wealth and how to help small businesses really grow.
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Well after you've been saying, We are here in South Carolina, a Kiwa Island at the Wells Fargo Women Leadership Summit, where we gather lots of different people in Wells Fargo who helped build up women leaders and then the women leaders themselves. And we're very pleased to welcome the filmthraffic arm of this. Kwansa Jones is CEO and a philanthropist. She joins us, let me just get the name here real quick for you.
There we go found of Kwanza.
Jones and jose Fliciano Initiative. I wanted to make sure I got that whole title. And Julie Caperton, head of the private bank in Wells Fargo Partnership for Wealth and Investment Management. Now, apparently Juliet was on stage and we had Kwansa come in and was sitting and then when Julie came running to the set, they hugged and they were chatting and they like seriously love each other.
What is your relationship.
Well, you want to start, Julie, Absolutely so.
Kwansa is one of our clients and a good friend and an inspiration to me and to really our entire team.
Did the relationship start first or did this close relationship happen over time as you were building a business once?
The latter is what it did, and you know, it's just been I'm incredibly just overjoyed to be here with Wells and to be here with you, Alex as well as Paul. And the thing that's amazing is that that's what this Woman in Leadership conference is about. It's about connecting, it's about community, and that's what having partners and really strong partners does, really really well. So thank you all.
Quanta. Talk to us about your initiative, the Kwansa Jones and jose Feliciano initiative.
Tell us about that, Okay, I'll tell you a little bit about it. There are four key pillars, and it's education, entrepreneurship, equity, and empowerment. And I like to say that those are the common denominator of things that help elevate humanity and elevate society. When you have people more educated, when there are more equitable opportunities when people are entrepreneurial, which means innovative ideas, and I say, you can do those three things.
But if you're not empowered, if you don't get off your tush and do something, then nothing happens. So that's what the initiative does. It really invests in those four key areas. And by investment, it's not just for profit investment. It's actually not for profit investment too. And that's where a lot of the things comes into play with some of the partnership that we have.
So how did this relationship want it's working out. So you started a foundation and you're like, hey, I want to grow it. This is what I want to do. Quansa talk to me about that.
Okay, well I have to go really really really really really far back.
We got time.
Okay, here it is, We've got But do you have decades because what I like to say is, okay, decades and nine minutes ago. I like to say that I dream in decades, and I've always dreamed in decades. Undergraduate, I went to Princeton and there at school it's always about service and Princeton being in the nation service and
in the service of all nations. And for me, being a longtime client of Wells, and I mean a long, long, long time client back when I was in high school and then it's just followed me throughout all my endeavors in pursuits and that's what's been really great. So I think it wasn't about starting the foundation and then finding
the partners. It was about dreaming and having the vision and knowing what it was it wanted to be accomplished, and then finding the partners along the way and Wells and just happened to be a partner along the way.
Julie, talk to us about your side of the what's a typical client for you? What types of services do you try to bring to them.
So, as the head of the private bank, I work with our high net worth client segment, but that really spans, you know, from people who have investable assets around ten million dollars, you know, all the way up to the multi multi billionaires that we work with and really our mantra and what I like to say is we like to meet our clients where they are. We have every product and service that you could ever need as a large financial institution. But the reality is that's not what
it's all about. It's about the personal relationships. It's about listening. It's about understanding what your clients need and bringing those products and services to help them achieve their goals. Lots
of people have products and services. The reality is that piece of the business has really been commoditized over time, and what the business is about is understanding our clients, understanding their goals and needs, helping them achieve them in a way that feels comfortable for them, and then a way that adds value to them. The most important and precious commodity is time. It's the one thing that you
can't replace. So when I think about what we can do for our clients, it's really how can they leverage us so that they can have more time to do the things that they want to do.
So, what are some of the typical questions that you're getting right now from your clients at Kwanso or the or high networth individuals. What are they asking you?
Yeah, so a lot of focus right now on tax planning and estate planning, particularly as it relates to the estate tax. You know, we have a sunset, you know, coming at the end of the year, regardless of what happens with the election, you can you know sort of
prognosticate on where that's going to go. But a lot of people are thinking about philanthropy as a way to think decades forward, right, Like I love the way Kwanza talks about dreaming in decades when when she and jose are thinking about their foundation, they're not necessarily thinking about ten years from now, they're thinking about one hundred years. Correct, And we have a lot of clients that really are thinking about that paying it forward.
So, Quanta, what's a typical effort that you guys get involved with at your initiative. If it's a typical company or typical client.
Grant, oh, my goodness, all of the above. Where's the boxer? You check all of the above, because it is. But I would like to say that it's a it's in a really focused way, and it's not only at times. And I'm going to say this, and I don't want to be dismissive of anyone's place in space at all, is that money can be the easy part. And when Julie is talking about, hey, certain things have been commoditized for all, say and I it can be the easy part,
but it's not the most impactful part. What can be done is there, but it's actually doing programming along with doing the money and the financial and the capital support. So what we do and we're getting involved in something, it could be businesses like diverse businesses, and I'd like to say that we invest intentionally but not exclusively and underrepresented businesses. So being here at a women's event that could look like we are investing in women's sports businesses.
It could be look like we're investing. For example, at Princeton, there was a pretty significant gift that we did a number of years ago and they're actually dorms named after Julse as well as named after me, because it's representation also matters. So we do a lot of things, but the programming element is what we're really excited about, as well as the philanthropic gunderwriting financial capital element.
How has that vision or donation or grants where businesses changed throughout the decades that you've been working on us.
Oh my goodness. I will say it's interesting because how we go about doing some of those things, and Welles has been a great partner in this is there are many ways you can give. You can say, Okay, I'm going to send a wire, Okay, I'm going to or write a check or oh, I'm going to do stocks
and do things in that way. So it really is how do we go in and try to be strategic because again, as I say, dreaming in decades, we're not thinking about just our generation, We're thinking about centuries from now. How are we going in and changing things so that one hundred years from now, when we know our organization is still going to be around, two hundred years from now, when it's still going to be around. How do you
set things up a state planning? We just had an estate planning various meeting last week with some of our lawyers. But how do we do it? We do it by carefully partnering with people and thinking beyond the here and the now. So I think it's important for us to just again highlight who we're partnering with and focused on those sorts of things.
Julie, Alex and I talked to a lot of investors on our program, and a lot of folks just recently are saying, you know what, there's a lot of uncertainty out there, the election coming up, we don't know how things are going to play out. We've got geopolitical risk overseas, We're gonna take a little risk off the table. Are you seeing that in the private bank as well?
Absolutely, saying yeah, absolutely so. I think we've seen risk off really for q some time. I think in some ways, you know, people have missed a lot of opportunities because they've been a little too risk off.
Definitely right now, everyone right.
I raised my hand for that because I'm just sitting in a fund.
Exactly exactly exactly, But the reality is right now, I would say, starting about two months ago, you're really seeing everyone just hit the pause button, right, so not make any major moves, get you know, into a really risk
off position, and just wait and see what happens. I think even more than other election cycles that I've seen, people are much more nervous now, and there's so much uncertainty, not just because it's so close, but because it's such you know, we're we're in such a polarized environment right now that it's that it's you know, there's a lot at stake.
What do you think, Julie, the role of cash and liquidity kind of short term is going to be so.
I think it's incredibly important.
I think I think in every way cash and liquidity is more important than it's been in many, many years. Right when you think about the confluence of events that's happening geopolitically as well as environmentally, right, like when we're seeing hurricanes devastating parts of the country that have never
had to worry about hurricanes before. Having liquidity, having cash on hand is so important when you're thinking about cybersecurity, when you're thinking about AI like the you know, we are in such a digital world now that all of our access to cash and liquidity is so tied up in systems that can be hacked. You know, you see things all the time that just make you really want to make sure that you have adequate liquidity in an uncertain world.
Quanta, you mentioned earlier women in sports, and boy, it's I've just sensed a real increased level of excitement and attention to women's sports in the last several years. And maybe the most recent round might have been Kaitlin Clark that that kind of thing. Yeah, great ratings, basketball, soccer, all kinds of stuff. How do you guys look at that part of the world.
Oh wow, So you know the four pillars I was talking about, one of them being equity. Women's sports fits under that umbrella, and when I look at it, and we've all heard the news throughout the years about women not having equitable compensation in terms of the sports world, when we look at now the rise and interest, and I would argue that the interest has been there, it's
now just there's more attention. Like you all, the media is now casting more of a lens there, and we look at it as it's important, which is why the program and element for us is still do sorts of things like this to continue to be able to bring greater light to it and invest not just with our mouths and not just lip service, but our dollars into these areas, and not only in the for profit scene, but also in the not for profit scene.
So those are some of the things.
We look at.
So it's a big deal to create an organization like you guys did. How did that start? Is it like a pen and paper thing? And then like you go and you go to Wellsborg, You're like, hey, I have this idea, here's my pen and paper.
Tell to me about it.
Okay, I'll give you a little bit about how it started. Again, both I'll say and I met at Princeton and he went to Wall Street I went to become a lawyer. You know, we just figured you got to have a family with some lawyers in there. And both my parents were lawyers too. But I remember we did a day off in Central Park and that was a day to dream,
and he was like, why are we doing this? And just go with me, just to just go with it, and literally, instead of asking questions, which is what I was asking about, Oh what does your next one year look like, five years, ten years, I said what does impact look like? What's the impact that you want to make.
And again, if you sell yourself short by saying, oh, well I want to make I don't know, a million dollars, well you could be leaving money on the table, as opposed to I want to be able to create homes for one hundred people, or I want to be able to create an organization that can help underwrite and fund some of these other smaller organizations that are already in communities.
So that's what it.
Looked like a bit of a pen and paper, but actually it was a sketchbook because I said, let's draw it, let's draw it out. What does it look like? In that way and then asking the question again, an impact not dollars and then did.
You take it to Julie.
Ah, Well, at that point, Julie well Wells Fargo had been around at that point because again I had been a long term client of Wells Fargo, and again as our networth increased and our means continued to increase and we gained in a lot more zeros behind our bank account, they were able to partner with us with a number of different things. So it did then one point shift to Okay, hey, here are these other lines of businesses you all have. We're curious about this what is able to be done?
So that's how it.
Came a Julie. One of the issues I think are one of the challenges and opportunities in private wealth management is this whole transition of wealth from the baby boomers to like my kids. And I know that's a huge opportunity for private wealth managers and view that because the numbers I'm hearing is just amazingly large.
It is.
It's an amazing opportunity, and we think about it in a couple of different ways. One is the way the client likes to be served and the way the client likes to be reached, and more and more you know that's in a digital format and it's in a self serve format, and it's just you know, the different generations think differently. A baby boomer is distrustful sometimes of you know, online accounting. You know, our next generation doesn't know anything
other than that. So really investing in technology and having that digitization is one thing that we spend a lot of time on and think about. The other is just the ways in which we add value because again, you know, I was talking about products getting commoditized, so much of the investment advice is.
Available to all.
We really like to think about the fact that you know, we can provide help in so many different ways, whether it's on the financing side. It could be you know, starting your career with a mortgage or with a loan that's going to allow for you to invest in your business moving all the way through to you know, even if you're not in a position to have a foundation like Kwanza, you know, having a donor advised fund and making your impact in that way.
You know, we really think about things in the ways.
That we can add value to the client as opposed to a product specific kind of thing.
And I'd actually like to add and you can do both. Yes, and that's what's great about all of that too.
Well.
We really appreciate it, both of you. This was a great conversation. I learned so much. Thank you so much, and good luck. Kwanza Jones, CEO and co founder of the Quanta Jones and Jose Finiciano Initiative. And Julie Kaperton ahead of a private bank and Wells Fargo Partnerships for Wealth and Investment Management.
Great stuff.
We love being here on the ground in South Carolina for the Wells Fargo Women's Leadership Conference.
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