Interview With Kelly Coffey: Masters in Business (Audio)

We have a very special guest. Uh. It's really kind of a fascinating um individual in that I know of no other person who is responsible for more assets, no other woman who is higher ranking in the world of finance, and yet at the same time is not only unknown to the investing public in general, is probably fairly unknown within the world of financial asset management, meaning people who work in finance probably haven't heard of Horror as much

as they've heard of some some more famous money managers. Everybody knows who Jamie Diamond is, He's the CEO of JP Morgan, but how many people know who the chief executive officer, the c e O of JP Morgan Private Bank is. They managed six hundred and fifty billion dollars, They're a huge, huge player in the world of asset management, and I bet most of you don't know who Kelly

Coffee is. Well. We spent a delightful hour and change chatting about what it's like being a woman on Wall Street, what it was like being at a big bank in the midst of the financial crisis, and what exactly the CEO of JP Morgan Private Bank actually does. I found the conversation really quite fascinating, and I expect you will also, so, without any further ado, my conversation with Kelly Coffee. This is Masters in Business with Barry Ridholts on Bloomberg Radio.

My special guest this week is Kelly Coffee. She might be the most influential woman in finance who you've never heard of. She is the CEO of JP Morrigan Private Bank, which manages over six hundred and fifty billion dollars in client assets. Her background, she has a bachelor's and International Affairs and French at Lafayette College, a master's and Fire and Service at Georgetown University. She's a member of the Global Wealth Management Operating Committee at JP Morgan and also

executive sponsor for the Asset Management Woman's Network. Kelly Coffee, Welcome to Boomberg. Thank you. It's wonderful to be here. So you have a really interesting background. Starting you've been at JP Morgan for quite a while. You've worked you withy through number of departments. But before we get to life at JP Morgan, tell us a little bit about your background. How did you get into the financial services

industry with a background in French and foreign service. Uh, I think I'm an accidental entrance into this, into this career. My undergrad degree, as you said, in my graduate degrees in international affairs. I wanted to study the world and how how it worked, and that was always fine fascinating to me. My other choice for my undergraduate major would have been math, but at eighteen years old, I couldn't figure out what I would have done with a math degree,

so I just studied that um. And so when I was coming out of Georgetown, I had a decision to make. I could have been interestingly an observer at the European Union Integration Talks three pre the the euro and all of the things that we're talking about will it become dismantled today? And the birth you could go to. I could go to the funeral. Let's hope not we're at that, we don't go to that funeral, but or go go

to Wall Street. And I thought, since I didn't do an MBA, that I should get just some grounding and finance. So I went to JP Morgan because they had a great training program. I met some fantastic people, and I would do it for a couple of years and years ago probably, and now you're running the private bank. So you were in a number of different departments, kind of work your way through. Tell us about the different divisions

that you either worked at or rent. I started in corporate finance and M and A because it was it was what I knew and I thought that would be the best part. It was. It was fantastic place for me. I loved building models, and pretty quickly in that I was asked to move to Argentina for US when Argentina was privatizing its industry. So we actually, hopefully we're going into that kind of phase of Argentina today with ma

Cri carry every cycle they did. We've seen the same thing in Brazil and Mexico every few years is a big regime change. So I went. I went there when Menem was president. Cavallo was the finance minister, who was a rock star in my eyes, and they had put in place something called convertibility. They pegged Paso to the dollar one for one, and then we were helping with

the privatization program. So JP Morgan, together with the French and the Italian and a local company called pets comp Punk bought the phone company in the north of Argentina, and we financed it and then we ultimately took a public but I I was pulled down there to work on that, and I stayed for about five years. And all these were own entities that were spinning out. They privatized it, then you helped take it public. Did the international affairs French and everything else help with that? Help?

I mean, of course now I'm fluent in Spanish, I spoke French when I went there, But it did I think my undergraduate degree and my graduate degree, particular in international affairs from Georgetown. It taught you how to take really complicated things and distill them down to the essence. And there's an analytical part of that. It's not all

not all of that is numbers. And I think it did help me, particularly when we were negotiating and you had the French, the Italians, the Argentine and the Americans US trying to agree on something in a consortium as joint owners. I think it served me well. And some of those met everybody speaking English. I'm assuming in those meetings everybody spoke English in those meetings. Of course I became fluent in Spanish. But yeah, we you know a lot of those. A lot of that business is done

in English. Uh. And it was interesting even though and even in Argentina are English. We would have held the meetings in Spanish verbally, but all of our presentation materials were in English, but just been because we're in an American bank. How long were you down in Argentina? About five years? Right? It's really lovely. It's beautiful so and I hope it becomes really prosperous now with that they

have of tremendous resources and raw materials and commodities. It just seems that every few years they seem to slip off the tracks and it takes a long time to get back on on pace. And hopefully I'm also slaves to the comality market. You have a huge run up cause by China, and then the run back down and suddenly they're out over their skis. And it seems that

nobody seems to learn from the cycle. Hey, kamalities are booming, let's let's you know, build this, sell that, and all of a sudden it goes the other way and what a surprise. Yeah. I think Argentina they do have enough of a of a market internally, and and if the government does this right, I think it can work beyond that. Sem. So let's bring you back to UH New York and the private bank. What's the difference between the private bank

and a regular bank. The private bank is actually a microcosm of the higher firm because when need think about who we do business with, it's it's it's extremely wealthy clients who probably they might be business owners, they might do entrepreneurs a number of different ways they got there, and they need us for banking, they need us for credit,

they need us for investment advice. They also need us to help sell their businesses sometimes help them think about I p O. So there's not a part of JP Morgan that my business doesn't plug into to make sure I'm getting the best of JP women for each of those clients. So it is really like a bank. We have just steered very hard net worth individuals. It is it is, I mean, JP Morgan serves the whole spectrum right between Chase and we. We we coordinate very closely

with that. And the idea is to basically say, this is the client, this is what they need, which is not only delineated by their balance sheet. By the way, as you know, very it's it's really what what do they what do they need advice on? And then let's make sure we're getting that right advice to them the way they want it. I'm Barry rid Helps. You're listening to Masters in Business on Bloomberg Radio. My special guest

today is Kelly Coffee. She is the CEO of JP Morgan's Private Bank, which manages about six d and fifty billion dollars in client assets. And one of the things that stood out to me on your bio is that you lead the investment banks Woman's network. And one of the things that I've tried to do with this show is bring more women on. And it's not easy. It is very much a male dominated industry. When I look to bring people on who are female, it's harder to

find them, the fewer and further between. Why is that? It's a good question. One of my colleagues always refers to me as the spotted owl because but but I actually think at Jpmarren, we have a pretty incredible group of people. You know, I I don't I don't know that I can put pinpoint what exactly is is the issue? Um, you know, I think that we've done I think what it takes to actually help women advance. First of all, they have to be interested, and then second of all,

they have to have advocates. And and we've we've done a number of different things. I have, whether it's at the investment bank, in the Women's network, or in my current business now where I sit and talk to women. There are some who come into my office and I'll I'll say I want to give them a promotion and give them a bigger job, and their first response to me sometimes as well, I'm not sure I'm ready for that. And you would never get that same sort of response

from a guy. They would They would fake it till they make it as the old old expression, and that's a male attitude. So women sometimes need a little bit of a push to say, you know what, be ambitious, you can do this, You'll figure it out. I wouldn't be offering it to you if I didn't think you could do it, and I couldn't help you do it,

And so there's an element of that. So we previously interviewed Michelle Myers is one of the up and coming economists again on the Bank America Merrill Lynch platform, and one of the questions one of the comments she said that I thought was so interesting. The lack of women at the top of the industry is a challenge for

the young women coming up in financed today. Agree with that, And the way she probably meant that is when you want to think about how you can do things, most people need to see somebody who's succeeded to do that no career path that you've witnessed. Oh you can do this, and they want to see that you're you're still you're still basically hacking away through the underbrush, through the wilderness. Yeah, and I think there's some truth to that I have found.

When I first ran our derivatives marketing group, I remember coming in and there were very few women in the group, and a couple of them that were in the group I knew probably shouldn't be uh, And what I did was actually make it a conscious effort to sit down and think about who can we pull in and enlist

the men, the great men that worked for me. I turned to one of them jokingly said today, you're either going to learn a lot about shoes or you're gonna help me recruit some really amazing women to work with us. And he did. He said, I'm going to do that, and when I shifted to run something else, we were over female. I found that if you got to critical mass, it took care of itself. It becomes self sustaining at

that point. And I think at JP Morman we've seen that a bit because if you look at our if you look at our organization, you have Marri Edos wh runs asset management, our CFO Marian Lake as a rock star,

Our chief marketing officer Kristin Lemcow is incredible. Uh, Aaron Hill runs all of the branches are branch network, and so we have some women in really visible, big jobs that I think give people that who need that there is a track to get there, and I can do it while still having kids and having a life and all the other things that are important. I think that

is what is helpful. There's a lot of academic research out there that says, if you're an investor and you're a woman, the odds are that you're going to have a better return because you don't suffer from what we jokingly refer to as testosterone poisoning. Any truth to that in the real world, I don't know. I I think I've seen that research. I think it's interesting I can say that in general, and this is obviously a gross generalization, women tend to be calmer in their reactions to things.

And I know with myself when something's going you know, when the market's going crazy, when we have to make it a decision, I get incredibly calm because that's the way I need to think and process to make the decision um And I think that's not always the case with with some of the male counterparts in the past. So you know, maybe you make better decisions when you're

when you're calm. Well, it certainly reflects in in that academic data on on performance, although if you read all those studies there's always footnotes says relatively small sample set. I know, you know, you need a few thousands managers in order to be able to to draining real conclusions. So, since you've joined the industry and progressed up the ladder at JP Morgan, what has changed within the industry for better? A lot has changed within the industry for better? I mean,

do you mean specifically for women? Are just generally no, I mean generally generally civily for women? Okay, Well, I would say I was just just a general point that I think is also very positive for women. Just think about the use of technology today versus when we started. When I started and I was covering Latin America, not only did I have to finish my model, but I actually had to face it to the client overnight and

it would cut off at least ten times. I had at least another hour or two in my schedule at the office to fax it. And because a two clock, three o'clock in the morning, Who's gonna do that for you? When you think about what BlackBerry did for us and now iPhones, where I can be anywhere and responding to what I need, I think it gave people a lot more flexibility. And I think that, along with some of the technology, just even the way those companies have operated

has even made our industry much more fluid. I mean, we're on the radio, but you see I'm in a bright blue dress today with boots. When I started at JP Morgan, I never would have worn anything like this because colorful in boots or dude suits. Women didn't wear pants really gerald shoes and a blazer, and years ago that was unthinkable. Also, I think that's I and I think that's somewhat superficial, But I think it manifests itself in terms of our openness to who is in the

who is in the organization, women moving along. I think that's all part of the same. There's much more opportunity to express your personality in our industry than there was when I started. You know, you mentioned technology, how much doesn't make a difference that so much communication is being done by email or instant message. We're big slack users. So who's on the other side of the communication You may not even know their gender, or their race or

anything else like that. Does that technology change make a difference or is it It's already adopted and pass that. I think it's adopted. I guess what I would say about technologies. I love the flexibility it it affords us. I don't love that so much is done on chat and on email, honestly, because I do think and you I'm sure you've seen this, somebody can misinterpret an email that you very easily, very easily written word to There's

also less of a self editing process. I've worked with people in the past who I've seen since horrific emails that had they turned it into a formal memo, it never would have No one would hit that send button. It would be there'd be a little more circumspection about

it rather than blah blah blah sends. And and that's the problem with two instant communication or pick up the phone call and and so when I shifted, you know, everybody in ours to use blackberries, and we were all really good with our thumbs typing with blackberries, and we've now shifted to iPhones. There are a good group of

people that still like the BlackBerry. But I made the shift to iPhones even though I'm not very good at typing on it, because I figured shorter emails are better and I'm much more likely to just pick up the phone and call a person instead of drafting an email. It's a little bit more of a pain for me to do it on an iPhone. I think that's a good thing. I'm Barry Ridhults. You're listening to Masters in Business on Bloomberg Radio. My guest today is Kelly Coffee.

She is chief executive officer of JP Morgan Private Bank, part of JP Morgan Chase, which runs the private bank runs over six d and fifty billion dollars in client assets. You were at JP Morgan during the eighth nine collapse. That had to be quite a interesting couple of months. What was it like at the back front row seat? Yes, it was interesting is a good way to say it. I think it was like always, it was always being tense and on and kind of ready for the next

punch and where it was going to come from. I think one of my most vivid memories. I have a lot of vivid memories. One of my most vivid memories is the fact that you would walk onto our trading floor on a Saturday or Sunday and it looked exactly like it did Monday through Friday. Really, why was that?

Because you don't know what was happening the weekend, and you know, I remember, you know the night that the weekend that we bought bear Sterns, you know, having that that conversation on Sunday night, like I need everybody in a six am, We're going We ran their risk. From day one, I had to walk into the building and figure out who worked for me and what they were doing, and make sure I was running derivatives marketing. Then make sure that no trade was put on around Wound without

my approval. And it was it was moving quickly, and

then the weekend Lehman failed. When when that was happening, it was it was extraordinary complex because not only you know, we have collateral posted to one another, so you knew what that was, but you had to actually think about what was going to happen in the markets and how that impacted your derivatives position and therefore what trades you might have to do when the market opened, and and you were just constantly running scenarios to make sure we

were ready for that. It was extraordinary, it really, it really was. There was a lot of second level thinking where it's not here's what's going to happen now, how it's going to affect other things that might be based on something else, and at a certain point that decision tree becomes completely unmanageable. But just for the next morning, you had at least have a sense of what was

going on. Clients were looking to us for a lot of advice on what was going on in the market, so you were really trying to take it all in and and it really was scenario analysis. The the takeover of Bear Sterns happened fairly rapidly, and Bear wasn't in terrible um shape, and if I recall correctly, you JP Morgan was the big his counterparty to Bear, so you really understood their book better than anybody else, well as well as you can from the outside. I guess it

was very quick. It was a Thursday night to Sunday night announcement. That's what A twenty nine billion dollar take over something along those lines. Huge. And the other thing I think that was extraordinary about it because Jamie has told the story I know a number of times where you know he got that diamond Jamie Diamond, right, Okay, he had that call Thursday night. It was his birthday dinner and Uma hearing about that and uh it was all Schwarts that called him and said we have an issue.

And he called, you know, the head of our investment in A couple of people. People got out. It was eleven o'clock. People got best back into the office right over to Bear Sterns to figure out and they worked all night to make sure Bear could open the next day and then through the weekend to see what we

could do for longer term. It was I think what the I'm not sure how many other institutions, if there's any other institution, could have pilled that off terms of the amount of analysis that we had to do to be able to step in and run that right from Monday, I was incredibly proud of everybody. It was a tough time,

but exciting in a way too. At the time, I was critical of the deal from the FED perspective, but objectively looking at it from a corporate perspective, I thought Jamie Diamond pulled off one of the greatest acquisitions of all time, essentially with his little risk as humanly possible for that much of that size, large risky bank, with the FED banking backing it up, and or eventually all but yeah, but when you look at all the main lane one, two, and three that were unwound, these were

the derivative positions of of Bear at the time. It really was fairly break even that that unwind wasn't wasn't horrific. And I think people from the outside we're looking and saying, oh my god, this is potentially tens of billions of dollars. It was essentially flat by the time they were done. I don't know. I think I think if you go back and you factor in all the fines that we've

paid as a result of that acquisition. You trace a lot of the fines back to that acquisition, particularly in the mortgage space um and they were second, they were the second largest mortgage and interesting that nobody was able to do the same thing with Lehman Brothers. I know, well, yeah, that really was interesting. I didn't think at the time that they were going to let that go, but it became apparent. I remember that weekend very well, series of

conference calls. I think one of the things that made JP Morgan able to react so quickly in the crisis was the fact that we had the risk infrastructure already set up. You know, Jamie also likes to say, you don't you don't declare war and then raise your army. You get your army first, and so we had risk meetings that we were doing that were this regular weekly meetings all the time, and during the crisis, what we did is we were just having them maybe four or

five times a day. So it was that same infrastructure, but just shortening so that that reporting was instantaneous up and down in terms of understanding what was going on around around the world and in the crisis, it was it was a pretty incredible thing to say, and you ended up with a fantastic building. We did really happy about. Yeah, that's one of the nicest new buildings. The bear Stearns building right next door to us, right, so our headquarters

right in the corner. You're on Park and between forty and forty seven and this is seven and Vanderbilts literally in the corner. I'm Barry Ridhults. You're listening to Masters in Business on Bloomberg Radio. My special guest today is Kelly Coffee. She is the CEO at JP Morgan Private Bank, which manages six hundred and fifty plus billion dollars. Let's talk a little bit about investing today. Uh, what are some of the more common questions that the bank is

hearing from investors? You know, investors are It's a it's a complicated world out there. You have what's going on in China, what's going on in Europe. You have negative rates in certain places. You have the elect US election going on, you have you know, the FED having moved in December and unclear what's going to happen for the rest of the year. So they're asking all of those questions, and they're asking them in terms of what does this mean for you know, for my portfolio, what I should do.

I think our job as investors, the most important thing to do is to stay invested. And if you look at if you look at the performance of clients who stay invested through market volatility. Again, this is money that is for the long term. They do far better than trying to time the market to go in and out.

Even just a simple if you look at the return of the SMP over the last twenty years called eight percent, So if you invested about ten thousand dollars you'd have today, you know, for eight thousand dollars at the end of last year, if you missed the top ten days, your investments have that amount. Nobody knows how to time that market exactly right. If you miss, if you miss the top thirty days, you're you're negative. That's amazing. You know that.

We've run some studies on that, and it turns out that the best ten days are usually adjacent in time to of the worst ten days. So if you think you're going to get out of the way, you perhaps you can, but then to get back in the next day when it comes snapping back that people don't do things. It's really hard. So I think what we can we try we take all of what's going on in the world and try to understand what we think it means

for portfolios. I think it just proves that being diversified is the best way to invest for the long term. And and so those are those are the those are the types of questions we're getting. Are you Are you getting similar questions today as to what you got a year ago, two years ago, three years ago? And how do those questions differ from what we might have heard

in the two thousand's pre crisis. I think if I think about today versus a year or so ago, I think the concern about a recession is higher today than it was then, so more more concerned about that. And then I and then obviously the politics, the political situation this year. Yeah, I think the election is coming. I think that's that's let me ask you differently because what I'm hearing from you aside there are a lot of topical things, but it seems like there are, Oh there's

always something that clients nervously ask about that. Your basic answer is always, Hey, you need to write out the volatility for the long haul, and don't worry about last year was China? The year before do you remember the Russian invasion? Oh? No, Cyprus, What is this gonna Cause it seems every year there's something horrific, and every year goes by and it's not the disaster people forking. I

think that's exactly right. I think what people have there's always going to be uncertainty in the world, and if and if you try to wait until it's all certain, I don't think you'll ever get to that place. And even when it feels more certain, you're probably too late. It's probably not the best entry point. Anyway. Market's pretty good at discounting these things in advance. They are, and I think you know, you say people at the equity market, oh it's made, it's made a big run. We do

tell clients when we're getting someone invested. It depends on where they're sitting today, right, But if they're starting from zero, we don't do that all in one day or a month. We we like to phase into that because I think over time that gives them the best return. But there's always going to be But there are times where that entry point just looks particularly attractive, and they tend to

be the scariest times to invest. And that's when you have to have the long term and just be able to say, you know, history is a guide, We're going to be fine through all of this, and and and it's it's one of the most important lessons in investing, I think. So let's let's take it in a different direction. What do you what do you think are some of the worst investing ideas that are out there these days? Again, I got the worst investing idea is to not be invested.

I mean that that is sort of the base of what we're doing. To be not very diversified. It probably the other when I would say to be to be concentrated. There are times to be concentrated, and there might be parts of your wealth to be concentrated in, but overall to be too concentrated in in one asset class or

one style I think is a mistake. Any thoughts on smart Beta, Yeah, I think smart Bida is interesting as a way to to to think about how do you take advantage of some of the um the idist and parts of the indices or sort of opportunities exist because of of miss pricing. Um. You know, when we look at it, when we look at a portfolio, we are looking at at it broadly, and I want there to be a part that is the most efficient way to capture BETA. Sometimes that's passive, right, a lot of times

that's passive UM. And then think about where are those parts of what you're investing in that you really need uh differentiated advice or or or strong management to capture UM. So emerging markets might be one of those where there's just a broader variance of performance UM certainly private equity for that portion of your portfolio. So that's the way

I think about it. Do you what do you guys do in terms of alternatives or for UM clients, Because we were talking fairly long term broad asset allocation, investing, venture capital, private equity, hedge funds. We have a very robust platform for that and and what we and and it all starts with our view on what's going on

in the world. So we may say, you know, UM, we we have a certain view on what's going on in real estate, and then we'll figure out what we think the best way and who the best is to invest on that. UM same thing in terms of something that might be happening in Europe that we want to take advantage of and then have the so it is theme based. We don't take the approach of saying you should have x percent of your portfolio and private equity, therefore,

let's just fill that bucket. It actually really is more of an investing view and that that is a great vehicle to do so, particularly when you have the time horizons that a lot of our clients have. So it's a really important part of how we invest for clients. So I've been reading how overvalued the US market is for I don't know, four or five years. Eventually they'll get it right, But um, what do you think about current market valuations in the US and Europe and any emergition.

You know, it's so interesting how people always zero in on the US market as it overvalues undervalued. I do think it's about fairly valued right now, particularly if you look versus history. But when you stop and just think about what the stock market is, it's a collection of companies that hopefully their earnings are always growing. So even

a fairly valued market should appreciate over time. The stock market spend at all times highs many many times throughout history, and when you think about it, because it's always gone up, up up, and there are moments and periods of where it comes down. So it really does again come down to your your time horizon in your perspective. But I think the overall index level probably fairly valued, not that interesting.

The parts of the market that I think are more interesting are really more sectors where we see there there's an interesting trend going on, or they may be at a discount to where their historical values have been. So healthcare and technology you are probably two within that that. I so, I think you've got interesting or inexpensive, as interesting and less expensive than they have been in the

in in the past. What about the energy sector which has gotten shell lacked over the past couple of years and talk about wanting to buy stuff when everybody else hates it. What do you think? What are you guys looking at that sector? Look carefully at that. I think there's a little bit more to play out there, but the entry point to that will will be a bit more in the fixed income side than the equity side. So for us, you know, here we are with six

years into a bull market. We're having a conversation about valuation and this and that, and I hear no euphoria. There's still a decent amount of skepticism out there. What what does that mean about the market and why we're now at at or near all time highs. Where is the euphoria this? I think when you go back and just remember what two thousand and eight was like, and then you think about what happened since, it's been a slower grind in terms of what the economy has even done.

And I think that weighs into people's sentiment today, right that that was not that long ago and it was so difficult that it really does weigh on people to it stays in investors minds quite some post traumatics, I crash disorder. I think we have a lot of clients um and we have a lot of investors who will just hold a higher level of cash than they had in the past just because of that. And and that's fine, but it it It certainly is a conscious decision, and

that's going to be a drag on their return. That will be a bit of drag, yes, because you know, I mean, you have I don't know, something like eleven billion, eleven trillion dollars that are earning nothing or negative yield in terms of the the overall market. Just look at look at where we are. We're at zero to negative yields right now, so that is a big drag. But people, let's think about as people are are are concerned. It's almost like an insurance policy. I'm concerned, so I want

to keep that. UM. I do think that you know whether you're keeping too much or not. It has to be answered on an individual level. UM. But I think we talked about earlier, all of the uncertainties that we have in the world is dragging on this and that's why it's not a euphordia. If you if you look about at the amount of liquidity that's put into the world market and the central banks around the globe, the FED is the only one that's starting to say we

should normalize a bit. And twenty five basis points was really nothing. It really doesn't mean anything to anyone, UM, But just that start has spooked the market. So I think we are We're at a point where it's kind of on precedent, and I don't think we should expect to see a euphoria like we've seen in the past, because the size of what's gone on and what's gone on around the world is such that it is it is putting a bit of a dampen heer. We've been

speaking with Kelly Coffee. She is the chief executive officer of JP Morgan Private Bank. If you've enjoyed this conversation, be sure and stick around for our podcast extras, where we keep the tape rolling and continue chatting. You can check out my daily column on Bloomberg View dot com or follow me on Twitter at rid Halts. I'm Barry rid Halts. You're listening to Masters in Business on Bloomberg Radio. Welcome to the podcast Extras. I don't know why I

do this every week, but I do. Kelly, thank you so much for doing this. This is uh, it was really fun. I have some of my favorite questions. I only have you for another twenty minutes or so. There's a ton of stuff that I didn't get to, and I'm just going through my papers and seeing what else. Yeah, everything else is, uh, everything else is is pretty standard. So so let me just go through, um, some of my usual favorite questions. Your background. Did you go right

from school to JP Morgan started on this? Basically, you found your way into finance and pretty much never left and never left, never went back for the n It was just always so fun yeah, I because I've done a lot of different jobs within JP Morgan, and every single one of them has been fascinating, challenging and interesting. And I've always felt like everything that was happening in the world impacted my day and it was interesting, which is what I ultimately that's the best part about working

in finances. No two days are ever alike. If you are in a rut and finance you're doing something wrong because it's always different. There's always something blowing up someway. Just open your eyes. That's right, the paper every morning. We're connected to everything that's going on there. I love that, and that really keeps it really keeps it interesting. So this is a really naive question. What does the CEO of a private bank actually do? That's a really great question.

I'm responsible for everything that touches a client, sort of the end to end business, and so so the advisors, the portfolios, the marketing board, across the board, strategy. I have a lot of partners on the table to help me do that. Across products investing, I have don't do that by any stretch on my own, but so there's there is a lot of different parts of my job. I try to spend a good chunk of my time somewhere around uh thirty or forty plus percent with clients.

If I could get that higher, I would. I always try as I get more efficient and things done, because when I'm with clients, I'm I'm learning from them, I'm hearing how we're doing. I'm also seeing my team in action and spending time with them. So I find that's a really good way to touch people and to stay really attuned to what's going on. I have to spend

a good portion of my time. You know, we've had a lot change on the last over the last couple of years UM in terms of the way we have to do things, and so we have a lot to do to make sure UM our client experience is excellent. We're very efficient at doing everything. So I spent a good chunk of my time on improving the business UM and how many different divisions or different department chiefs are

directly answering to you. I have about fifteen direct reports if you look at what we're organized regionally around the US, so that is the regional sort of client facing folk that directly report. And then I have the what might be a more matrix but sort of all of the operations, technology, business, finance, etcetera. That is that is also really much part of my table. Let's say as we do that, so folks, etcetera. You mentioned how things have changed over the past couple of years.

How have you guys had to adapt to Well, well, here we are in the post crisis world or in the post dot frank world. How has the compliance side of this changed either your your daily operations or is it just another thing to deal with? It's changed, It's changed everything. It's changed our daily the way we on board a client, a new client, the way we interact

with every client. That when you think about doing a mortgage towards bringing a new client in, we've we've had to make sure we're complying not only with pretty complex regulations, but a a different standard um in terms of the level of questions and the level of monitoring that we have to do. So we've we did all of that

really quickly. And I think that if you ask me what the biggest I think the biggest factor for change will be going forward is similar to what it's been in the past in terms of technology, but I think at a much faster pace because we need to make sure we're interacting with our clients digitally more efficiently. You know, their expectations of us aren't measured versus other financial institutions.

Their measured versus how they how they interacting with Amazon and Google and Apple, and we need to make sure we're we're staying pace with that. You want to be a technology play or not just to find it. So let's talk a little bit about fintech. What do you guys think about all the new technological innovations, whether it's the ability to analyze the portfolio and generate a risk score, or the robo advisors or anything along those lines. How

has financial technology changed the way JP Morgan operates. We we we are critically, We're really focused on it's critical change a lot of what we do. How you think about well, first of all, not only how you interact with your clients right, making sure they can see our thought leadership on their phone, they can move money on their phone, everything that everybody does with these with these

little devices they care in their pocket. We're changing that. Um, we're the bank, So let me just like bank JP Morgan, Bank, JP Morgan Chase actual depository bank. I mentioned we were talking earlier about the mobile Bloomberg Gap, which I think is awesome. Your mobile bank app, which I use, is great. You could you could move money around, you could pay bills, you can do different things. It's really like a full computer on your iPhone, which is really impressive. And we're

working every single day to improve it. And so that that's one of the benefits I have. When you sit at the private bank, I'm part of this huge organization that covers you know, we interact with at least half of the consumers in the US. Silly everything we do. What what I do is I just take it and adapt it for certain clients segment, whether it's the private bank or another part. And that's so it's changing everything we do how I look at how I'm looking at

data in terms of giving clients advice. You know, we have a big data team at JP Morran. That's fabulous. How we think about who our next clients should be. It's it's uh, it's changing every day. Huh. It's um and it's fun. Full disclosure. We we bank with you, My wife as an account with you guys, so we were in the household for that. Our corporate account is also there. We found that your ability to do a H S and other things, the interface was just very

ahead of everything else. We we looked at a bunch of banks and you guys were just heading shoulders above that. But that is not an official endorsement. I just wanted to disclose because someone's gonna say, hey, don't you bank with those guys. Yeah, they're not waving my monthly fee. Because if you look at everything, right, if you will, thank you for your business first of all, um, but if you look at all the money we move. We've said this publicly, it's somewhere between five and ten million

dollars a day. That day. That's insane, five to ten trillion dollars a day. So let's one of the questions I asked earlier was about some of your mentors, um, but let's talk take this uh in general about mentors for women. But who were some of your early mentors in the world to find it. I've been lucky to have a lot of great mentors. Probably what I would consider one of my first mentors, it might be a strange way to call him, was my grandfather, who ran

a bank in Pennsylvania, and he passed away. So you're from a banking fan, banking family, you could say, a small hometown bank, the old Forge Bank, and and he was pretty incredible. And so when I went into finance, and and I worked for him in the summers when I was in high school and and did a couple

other things too. But you know, it was it was a really great relationship because it's it's someone you could, you know, you could talk to about everything, including you know, at the time, what we thought Greenspan was going to do next on the FED. I mean, it was it was a really close relationship and I think, um that formed a lot of a lot of who I am.

And then when I came into the business, I've had some pretty you know, pretty amazing uh people that I've worked with that have just given me good advice as different points in time. I think, I think JP Morgan is a place where it's not too often where you're

you're a couple. I might have been just for the training program month out when they tapped me in the shoulder and sent me down to Bueno Side's to work in Argentina, uh to to do project there and then asked me to move a year or two later, and and you know, there's been a lot of either, you know, and it cuts across the levels. I have mentors that are more junior and more senior that I looked to and I learned from all the time. They tapped you right out of the training program to go to South,

so they obviously saw a little skill there. And I don't know. I think it was I spoke French. They sent me to Argentina. That's how much thought went into it. But it was. It was fabulous, and we went down. We were selling a company. We were selling a phone company. No well that we were buying the phone company in the north. But the first time I went down, we were selling a factory for European company and it was in the south of Argentina, a little place called Commodo Ladavia.

And there were no women that lived in the town except for the women that served the lunch at the factory, and they didn't really live with the town. I think they they live far away. And they sent me down to two due diligence on it, which was pretty funny. I got a lot of lot of in the town. Um. What investors influenced your approach to thinking about private banking? Uh, A lot of investors have influenced my approach. I you know, all of the greats I and I love the simplicity

of Buffett. I think, you know, us internally have some pretty extraordinary investors. Whether you you look at some of our ceios, like Mike Symbolist, who has been at jpmore in a long time. It just has a unique perspective on the world. Um. You know, we also on our platform have a number of the best managers in the world, and we have names any want to mention. I don't think I want to mention any names, but I think

that we have them. You know, we spent a lot of time with them, and when they come in and think about and talk about what's going on in the world and what they do, I learned something from every single one of them. It's an incredible position to be in. How about books, What are some of your favorite books? And they could be fiction and nonfiction, investing related or

non investing. That's a really hard question for me because I love to read, so I could give you a super super long list if you think about if I'm starting with fiction because that's fun because I do like mostly on vacation to to get into something that kind of takes my mind completely out of finance. I like books that take you to a different time period and then explore characters there. So if you think about one of my favorite series is ken Fall. It's a great

writer and um he wrote Pillows of the Earth. But the you know, The Winters of the World, the Three, the trilogy that goes from World War One through World War Two. That's that's a favorite of mine. UM. And you know, I love Henry James Portrait of a Lady. That's again that period that kind of takes you back really interesting characters. And then I and then I like to read about a lot of business books, business or investing books. So there's a great book Hilary Bossity that's

called Execution, Getting It Done. I think, you know a lot of what I have to do in my business is execute. And you know, even a great strategy poorly executed doesn't do anything. Um. I like Stephen Pinker, I like Malcol Gladwell, I like Adam Grant. So those are the types of things that I that I tend to read. I have Pinkered and Grant both queued up in the coming months. I'm excited. I just started Originals. I don't

know if you just starting that one. That's just and Pinker has so many gratefulks don't even know where to begin exactly. But he's really a deep thinker and really an interesting interesting guy. Any finance books of mentioned of note that you want to mention um House of Morgan. Okay, that's about the history ji. No, Bill Cohen didn't write that. He wrote a new it was I can't remember who the author was. I can't remember right now because it's it stops probably in or two. It's it's actually it

actually ends quite a while go. Bill wrote a newer one, and I actually I read some of his. I think they're good. My head of research just read the one of the more recent biographies of James pier what his name, Pierpont Morgan JP Morgan, the actual man, and said it was utterly rivening and he couldn't put it down. And the biography Steve Jobs, his biography was was pretty incredible. Yeah. And the Graham there's a great one about her Washington Post.

That's a really good one. The Right Brothers one everybody has been raving about on my bookshelf. I haven't gotten. I think you're making that into a movie too. Really, I thought I heard that everything. He's the author of that book who escapes Me at the moment? Who was the author that wrote I can't believe in forget his name right now. Barbarian's the Gate give me a and he wrote The Fastball. He's a Really I do read a lot of his too. It'll it'll come to me

give me a minute. That's the problem with getting older names. Just I used to have these an go on and on and on. I get out my little kindle, app on my iPhone and it it just I'm constantly putting books on there that people recommend to me. You know, we have a summer reading list and a winter reading list, so we're now preparing for our summer reading list, which is not out yet. I put one out of this is what I hope to read this summer, and then we see how many I I actually get through that. Um,

there's there's there's so many fascinating books. McCullough is the guy who wrote He's the Right Brothers and everything he's written, including was at Hamilton's. He may have written the Hamilton's book that became the basis of the play Um which is now Hamilton is incredible. All right, So we talked about the changes since you've joined the industry. Let's talk about the next shifts. You mentioned technology. What are some of the other major shifts that are coming to finance? Well,

I I think technology. You mentioned fintech. I think that is the absolute biggest, biggest change because you have a lot of different companies that come into the space that are all doing the same thing in a way, They're all trying to solve a problem that finances. The financial industries is incredibly complex. We're regulated in a complex way. What we do is somewhat complex, and they're really good at figuring out what's that pain point, how do you

solve it? How do you make a mortgage process easier? So you know what's what's you know going where you are in that process. One of the most highly regulated processes um in the world, I believe, and and so I think that's going to change the way we even we we we interact with our clients and the way we serve our clients and the way we think about it. And it's changing. Like I said before, everything we do.

A lot of the analyzes we're doing inside to make you know, I think we we just need to have used technology to interpret data better so that we're spending our time. And when I say we, I mean a banker as someone who's who's talking to a client on interpreting and advising them, but making people smarter through their use of technology. And I think that's going to be, um, probably the biggest change to our industry, and we're working

on it every day. So my we're down to our last two questions because I know they're coming to drag you away shortly. UM, So what sort of advice would you give to a millennial or a recent college grad who came to you and said, I'm thinking about going into finance. What would you tell them? I would say, take a chance and go for it. Make sure you

love it. I think one of the things that's happened in our industry that's been good is through the crisis there was a fair shakeout, and I think there was a time when everybody gravitated toward finance because it was a thing to do. It was a way to make a lot of money if the money. I think that cohort has been sort of selected out. I think it's select it out. Rising title of sallship. I think it's a great thing, um, and I think it's better for

those individuals they didn't love what they were doing. Those are the people, you know, if you're miserable doing this, that's kind of crazy because there's so much exciting things, so many things going on, and so I think we cleared that out, and so I would say, make sure you of it, um, and take some chances. I do find sometimes that are our younger UH employees or younger members of our team tend to be very, um, a

little bit risk averse. You know, they're they're they're they're purposeful, so they're moving toward a purpose, maybe maybe more strongly than certainly I was. You know, I came in on intending to stay in the industry. I look to the next thing to make sure I would be learning, having fun, you know, working with people I liked. I didn't necessarily say I wanted to be the head of the private bank.

I wanted to be this. They're more purposeful, which is good, but I think it makes them a little bit less willing to jump and move to Argentina, for example, or gives you the ability to pivot towards an opportunity that comes along as opposed to just being on the straight and arrow. Yeah, I don't don't have blinders on. I think that's really important. I think it's important to choose to work with someone you think you'll they'll learn from. Who you work for so important, it might even be

more important than what you do. One of the most surprising things Arthur of It had said when we had him on the show was don't be afraid to pick up and move to a new city and say I'm gonna I'm gonna try Chicago or New Orleans or Cleveland for a year or two, just to get that sort of experience. And if I come back to wherever, New York, San Francisco, wherever, Hey, at least I've experienced something else and I have a frame of reference abroad. I have

to say, you know why I think. I mean, I had studied abroad in in college, but moving abroad early in my career was one of the best things I did. It's it's eye opening, and you know, I sometimes I'll have a conversations with people where they don't they don't want to move across country or they don't want to move. You know, you get a job in Hong Kong and a heartbeat. I could give people Hong Kong London. Just

take advantage of it. I mean, the world is an incredible place, and um I I that's my advice would be to be open minded and to take some risks and make sure they're doing something they love. Take risks, do something you love. All right, let me let me see if I can remember that and our last question, and I'm going to change the aid on this a little bit. What is it that you know about banking and investing and running a company that you wish you

knew twenty plus years ago? You know when people always ask me, what would you go back and do differently? That's that type of question. I always say nothing because I'm afraid that I wouldn't get to where I am now. The path is what leads you to to what you know. But all that said, what do you wish you not? I'm not asking you what you would have done differently?

What did? What do I wish you knew way back when there is that you know today you didn't know then they I wish I knew how successful Amazon would be, an Apple would be. I mean, you know, investing the SEC has a temporal department that prevents people from going back in time, and I'm not allowed, so you can't. You can't use that. But but just as a like, I think back when I was younger, and I'm like, oh, what an idiot I was. If only I had at least a little more awareness of the world around me.

So that's like, I wish I knew that it was actually a full planet and it wasn't just involving around me. But career wise, I understand exactly what you're saying in terms of you don't want to change the path, but I would love to know a lot of the things I know today in terms of, uh, you know, making sure. I think there were times in particularly in my career, in particularly when I was doing M and A, where

I buried myself in my work. Um and as you know, as my husband likes to remind me, you thought it was the coolest thing in the world. You never would have wanted to be somewhere else on a Friday night

or Saturday night. But I do think sitting back and saying there you could have backed off a little bit and done some more really interesting things, and you didn't need to be so focused on one part of your life, probably for as long as I would have I tend to get that way when I'm focused on some hyper I'm hyper focused on it, and that that can be a benefit. But you know, I think your biggest strength

is usually your biggest weakness. Your biggest strength is okay, there's a blind side there, and right, the tendency to take it to to a place that's one notch beyond where it should have gone. Short, Kelly, thank you so much. This has been absolutely fascinating. We have been speaking with Kelly Coffee. She is the CEO of JP Morgan Private Bank. If you enjoy this conversation, be sure and look up an inch or down an inch on Apple iTunes and you could see the other ninety or so of these

podcasts that we've done. I would be remiss if I did not thank my booker and producer, Taylor Riggs are chief engineer Charlie Bohmer. Today's sound engineer is Genie. Is that right? And my head of research is Michael Batnick, who helps prepare all the questions for this. You've been listening to Masters in Business on Bloomberg Radio