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FULL EPISODE TRANSCRIPT
Adam (00:00):

Welcome back to Count Me In. IMA's podcast about all things affecting the accounting and finance world. This is your host Adam Larson, and I'm here to bring you episode 135 of our series with featured guest, James Burton. In the wealth management space, a few can claim to have accomplished more than James, a 20 year veteran of the industry, he has held executive, management, and C-level positions at some of the most respected financial institutions in the world. He now serves as Chief Growth Officer at fintech trailblazer, Personal Finance, and joins Count Me In to talk about how to turn a crisis into opportunity. Keep listening as we head over to the conversation now.

 

Mitch (00:50):

So James, obviously the global pandemic of 2020 caused a crisis for many businesses. A lot of our listeners felt this impact. For you personally, I'd like to start off our conversation by just having you explain, how did you help clients and organizations navigate through these difficult times, particularly in the beginning?

 

James (01:09):

Yeah thanks, Mitchell. You know, something like a pandemic and the initial market slump that it caused, that really, that really makes you reconsider everything, right? All your assumptions about your business model, your strategy, your growth opportunities, trying to see into the future. And naturally many of our clients went through very similar reflections about their goals and their financial situations, and they had a lot of questions about the future too. And the demand for advice, financial advice and expert support definitely increased. And in this case, it turned out that our company, Personal Capital, we were highly prepared for the crisis because we already had a hybrid digital and human model advisory model is technology enabled to operate remotely. So in a very general sense, we just stuck to our knitting. That's a British term, I think, meaning, we stayed on strategy and we continued interacting with our clients and supporting them through their financial concerns during the pandemic, particularly in those early, very stressful months. But we also made a very crucial pivot to getting everyone to remote working, from home literally overnight. And we could do that because of how the company was designed and built. So, you know, the result was that despite the initial market slump that we went through, we actually saw strong growth last year. People want advice. They want to holistic advice and they mostly don't want to travel to a brick and mortar building or office with wood panels, you know, nice little offices. They certainly didn't want to travel during a pandemic, right. And now, you know, a year later they know that in fact they don't need to go any further than their kitchen or the home office, to work with us. So we were able to help them, right away and we were able to help them remotely, which was great.

 

Mitch (03:14):

And now, you know, kind of building on this conversation a little bit, in leading up to our recording today, I was told that you follow a quote from Winston Churchill. It's a bit of a mantra and if I can just read the quote, "never let a good crisis go to waste". So, to help explain for our listeners here, why, what does that mean to you? How, do you go about using that as a mantra?

 

James (03:37):

Yeah, so Winston Churchill, he certainly produced a lot of great motivational quotes and I do particularly like that one, "never let a good crisis go to waste". I find myself using it a lot actually. And, you know, a good crisis, is very often a great opportunity. And that's because it's when you're forced to reconsider everything, you know, all your assumptions, your business model, your strategy, your opportunities, even your very survival sometimes. A really good crisis puts all of that in the picture. And as a result, it's often when meaningful change is initiated and it's when we move forward from the past, you know, to the future way of thinking. And in the case of our company, as I mentioned, we found that as it happened, we designed and prepared very well for the lockdown and we could commit to this virtual first approach. And as a result, we've proved beyond doubt that virtual financial advice works very well. If you have the right technology and business model and it's here to stay. So a great crisis here, which it really was, and in many ways still is, you know, helped us prove that and move into a future where, you know, advice can look very different for Americans.

 

Mitch (04:55):

And now we are, you know, roughly 16, 17 months through this, you know, it's been a year and a half and, you mentioned going into the future a little bit more, not every bad thing that happens is a crisis necessarily for business, right? We don't always face something like the COVID-19 pandemic. How can this mantra, this quote still apply on a daily basis, you know, once we kind of returned to normal or the new normal, however you want to refer to it. Can you give us some examples and some response options for the daily ups and downs of business and responding this way?

 

James (05:31):

Sure, sure Mitchell, and look, you know, certainly these have been some strange and scary times in the past year. But you know, it's exciting to look into the future and see things improving. I'm definitely happy to share some examples, but, you know, as I've thought about this, as you point out, you know, real crises and real opportunities, they're not exactly daily events, you know, thank goodness. They tend to come along just when you think everything's going great in your business, like maybe early 2020 for example. So every few years you may get a really good crisis, you know, something really challenging or bad happens in the environment or, you know, in your business. I've got some examples of how to put, you know, a good crisis to work, but I have to mention that they're not really day to day examples, they're how to really harness the big situations. So if you'll indulge me, I'll happily proceed, but, you know, I generally wouldn't use an expression like, "never let a good crisis go to waste", in the day-to-day environments, right. That's just doing our jobs. So I'm happy to proceed with, you know, let's just say longer term, bigger picture examples. I'll go for it.

 

Mitch (06:48):

Absolutely. Yes, please do.

 

James (06:50):

That's great. So, first of all, I could go back in the time machine, maybe about 20 years. And, at the time I was working for a well-known stock broker based here in San Francisco, and the company had experienced huge growth in the late 1990s. And then along came the crisis, the tech bubble burst in 2000. For anybody who was active in the markets at that time, you'll know that the market just bond and, you know, trading activity and the interest of people investing in their financial accounts, it just fell off a cliff. And there was a lot of revenue pressure for businesses, like the one I was part of. And here's the thing, clients were asking, what should I do? You know, they wanted help. And at the time the company was known for being an online stock broker that would execute your stock or fund trades, but it wasn't known for giving advice. And here we were with a situation where, you know, the markets had completely changed, the revenue dynamic had completely changed, there was a lot of pressure in the business and there was pressure from our clients to help them in new ways. So there's the opportunity right there. So we responded by building out new financial advisory capabilities to meet this demand for advice that was emerging from the client base, you know, when the markets turned. And what we started back then in a period of considerable adversity, now in time it became a major part of that business. So that's, I just wanted to provide kind of a historical example of how some of these, pivotal market events in the financial industry actually could really generate a significant positive change if you can get through them successfully. So that was one example. I've got another one, which is about, the company I work for now, Personal Capital, and it's a little different. And I'm gonna, explain what I mean by that. So Personal Capital came out of what I think of as an industry crisis, by the way, it also came out of the financial crisis. It was, founded in 2009 and, at the time of the great recession and financial crisis that started in 2008. And at that time, most of the industry was really falling behind, in terms of, you know, not providing the kind of experiences that other companies, digitally based companies were providing. So, Mitchell, let me ask you a question if I may, just to, you know, break it up for myself a little bit here. Could you, just give me a, maybe a company or a brand that you use pretty regularly in your life, that has a digital component to it.

 

Mitch (09:50):

Oh sure. My wife always gives me a hard time of all the Amazon packages that we show up at the front door. It's almost a daily delivery for us. So I'm a prime member and Amazon is definitely something we use regularly.

 

James (10:03):

That's a great example I expect, you know, like my home, your driveway is probably like a FedEx or UPS shipping depot some days, right. So thank you, great example, you know, that's the kind of service that many of us have found that, you know we wonder how we do without it having gotten so used to it. And if you think about some other brands, like, I dunno, TripAdvisor or Uber, or Sonos or Stitch Fix, and some of those brands we haven't used much in the pandemic, but before that, they were, you know, very prevalent. These are brands and companies that cross the physical and digital worlds and you know, what they've done in their spaces as they've leveraged data and technology and in turn, they provide us the consumer, the customer with information and control and choice, great convenience, often great value as well. They undercut the existing pricing in the industry, and frankly they transformed our experience as consumers, right, and as a result, they grew exponentially. So I just wanted to remind us of that background because I can't trust sort of meanwhile, 10 or 15 years ago, you know, I think household finance, personal finance was having its very own crisis, you know, when it came to the user experience and it was really ready for transformation. Let me explain a little bit. I'll try and make this kind of, pretty real, because I think it will resonate with you. So, you know, at Personal Capital we have, almost 3 million users on the platform and as a result we can see a lot of, what they do and how they organize their lives and we can understand quite a lot about their financial situation, which is how we can then help them. But one of the things that's really notable is that we see that the typical household that's using the platform has about 15 financial accounts, which is a big number, right. And just, you know, think about your own situation. Maybe this will resonate. Probably you've got a bank account, you may have got, I don't know, maybe at high school, maybe at college at some point you've got a bank account, you've got a debit card. Maybe you've got a savings account too. And then maybe you went to work for somebody after college and you got a 401k or something like that. Maybe you changed jobs, so you've got another 401k. Maybe you were smart and you opened an IRA as well, and perhaps you got some credit cards along the way and maybe a mortgage if you bought your first home yet. And, maybe you have an awful loan, maybe you have a Bitcoin account, you know, it goes on and on, right. So you know, typical household has this great sort of array of financial accounts and, you know, it's a lot and it's, you know, the question is how do you really understand your financial situation when you've got the stuff spread all over the place? And that's, you know, think about the, all the different logins you have to know, all the different statements you might be receiving, put in whatnot, it's just a lot to really put it all together. So most people don't truly understand their financial situation and they don't have that control and understanding that you would expect them to have with the digital revolution that occurred, you know, 10, 15, 20 years ago. So how do you deal with that? Well, maybe you can use a spreadsheet if you're motivated, I've tried it, it was kind of fun for maybe an hour, right? And then, you know, and that's only if you really like numbers, which I do. And then it gets really tedious and it gets hard work to update it and pretty quickly it's out of date, it's dragging, you know, your, whatever you put in for savings and investments and values is old, whatever you put in for your debts or borrowings, it's old, it's very hard to keep it up to date. I think, you know, even very accomplished accountants would find that pretty tedious and probably give up pretty quickly, right? So that was essentially what we saw as the crisis in financial services, which was that just when life was getting more and more complicated, particularly with the financial crisis, people didn't have the resources they needed and that was an environmental crisis. So in this case, looking more from the outside, we saw the opportunity, the founders of the company saw the opportunity to really address that and change the way the industry works, by bringing everything together for you in a dashboard where frankly, with a few minutes, you can enter your financial accounts, it's safe and secure, it's very important to people by the way. And then you can see your net worth, you can track your savings and budget and you can really understand what's going on in your life. So that was an example of where, you know, what is essentially a crisis at the personal level for people and turn it into a really great opportunity to help them. I'll make a quick plug, by the way, if I may here little cheeky of me, but I'm a believer. So, Personal Capital is by the way free. So the tools on the platform are free for everyone to use and I would, you know, I would encourage people to give it a try if you find it complicated to track your financial life. I'll pause there.

 

Mitch (15:35):

Well, thank you and the examples you shared certainly do resonate with me. I can certainly relate to a lot of the examples and situations that you discussed. So, you know, definitely a conversation I think is very relevant to many of our listeners and the more we talk about finance and personal finance, you know, this is certainly the audience. So I think that resonates very well. I do want to kind of continue on this track, but bring us back to the whole idea of, you know, crisis management a little bit and a lot of what we talked about is opportunity recognition from the organizational perspective, right? We're talking about businesses and recognizing how to persevere and then come out on top, you know, never letting a good crisis go to waste. So how about from this individual level? You know, you talked a little bit about individuals being able to take advantage of these opportunities, but how does it relate to the individual and, you know, even if it's a supervisor managerial perspective, you know, understanding what an individual can do during and following a crisis, what do you have to say about that kind of perspective?

 

James (16:40):

Yeah, thank you. It's a great question. That's one I've reflected on a lot because I do feel that some of the most challenging situations I've been in, in my career have also been, the greatest opportunities. And so we talked already about how, from a company perspective, you know, you shouldn't waste a good crisis because it's when you get a chance to reconsider things. It's when change is initiated, it's when you start to move from, you know, the past into the future. But I think at the personal level, there's also a lot to this. I think it's when people are tested, they can test themselves and they get tremendous personal growth opportunities. Obviously it can be in a very stressful situation, but, if you can survive that, you know, that can be full of opportunity. It's also when teamwork, your teamworking skills, your resilience and attitude, your work ethic, they really count, you know, when things are difficult. And as a result, I think it's when, many careers are actually made. That's certainly been my experience. Oftentimes the crisis is a really a great career opportunity. And in the financial industry, you know, in years, like 2000 to 2002 or 2008 to 2010 or 2020, and we're not fully out of the woods yet either. You know, you can already learn and grow, you know, at greatly accelerated rates relative to what you would generally be doing day-to-day when things are going relatively smoothly. Because you're solving for so many problems and issues. And also, you know, I think it's very exciting you get to work in different ways. Now, sometimes you may work very intensely with people you don't usually work with, you know, teams are reformed, new problems have to be solved so people come together in different ways. New leaders emerge and you forge new relationships with colleagues or business partners, that can be very deep and can carry forward for many years. And that can be very exciting and very rewarding as well. So, you know, these situations can be many different things. They can be a big strategic place such as, an acquisition or merger deal. It doesn't matter which side you're on, it's going to be a very intense time. You know, and you may be an owner or an advisor, but still you're going to be super busy and you're going to be working with new people. It could be a legal issue. Those obviously come up in businesses from time to time and it can be very stressful, but again require the same discipline of focus and teamwork and getting the right people together. And also it could be a market crisis and it doesn't matter which of those it is, my advice is to lean in and make the most of it in terms of, you know, what you bring to the table and the people you get to meet.

 

Mitch (19:40):

Well, thank you. I know from an IMA perspective through all of this, we really emphasize the importance of upscaling and rescaling through all of this, right. We looked at this, you know, the last year and a half as a great individual learning opportunity for many of our members, you know, many of our listeners here. What can we do to better ourselves during this difficult time so that when you know, that next phase does come about, we're prepared to take advantage of it. So, you know, to kind of wrap up our conversation, I do want to kind of build on that a little bit further. I'll ask you to take out your crystal ball if you could and if you had to offer up some advice to our listeners, as far as crisis management, managing others, personal development, anything we've talked about so far today, when it comes to preparing for the future, what is your stance and what would you like to share to wrap things up?

 

James (20:32):

Thanks first, Mitchell. That's a great question and I'm, you know, I'm very fortunate to have learned so much from so many great colleagues over the years, and I try to distill it down and simplify it in terms of, you know, any perspective I would share to just really three things. And those three things are, your customers, your purpose for your mission and the people you work with. And let me just say a few words about each of those. Starting with customers. You know, so I've personally, I've spent most of my career working in direct to consumer businesses and, but I think the same would apply in that business to business environment as well. And I think the thing is to be as up close and personal as you possibly can be and remember that, you know, your customer is a person or a couple or a family. They have hopes and dreams and fears just like everyone and they're really busy people. So we need to do everything we can to understand them, what they need, what they think, what they experience, and particularly in a time of crisis and particularly a time of crisis for customers, really understand the problems they face and why they face them and get to the root causes. And if you can get to the truth as experienced by your customer set, that's incredibly valuable in helping you, frankly at any time. It should be something we all work on all the time, but it's particularly valuable in a time of crisis or stress. So that's customers. I think, you know, if we do a good job of that, we can develop and refine our purpose, our mission, you know, what are we here to do? What are we trying to achieve? How do we help our customers address their challenges and do better? And so a strong purpose is obviously very inspiring to us and to others, and it galvanizes us to make things better, drive for change. And, you know, if you have a really strong mission, it makes work so meaningful and it makes your time incredibly valuable because you'll never have enough of it, right. You're just so focused and busy all the time and so I do think that, and it's advice I give actually to, you know, younger folk who are starting out on their careers, is to find an organization where you feel very onboard with their purpose and their mission and you will find you are inspired by it and your time flies by. And so that brings me to people, my third thing that I always focus on in times of crisis, but also any other time, which is, you know, for me at least, the people that we associate with, they're the single most important decision you can make, or maybe it's accidental, but they're still the single most important factor, in how, you know, how things are going to go career wise and so on. And the sort of questions I would ask is, you know, do we share similar values? Do we believe similar things? Do we have a similar ambition to make things better and to drive positive change in the industry we're in or the world? Do we love to collaborate with each other and team up? Are we going to be courageous when faced with a crisis and obstacles? And frankly, you know, when you're thinking about joining a team or a company, are these people that we're going to enjoy spending potentially years working on something very difficult and challenging, is that going to be a rewarding experience? And if the answer is, yes, that's really fantastic. And the chances are, you know, these are the sorts of people who are going to see opportunities and they're going to be motivated to strive after them, rather than just seeing difficulties everywhere, which is the other way of seeing it, right? So that's what I would really try and synthesize down as customers and purpose and people, and then sure, you know, you need to have the right kind of talent on the team. You need to have the right technical skills and expertise. I'm kind of assuming you have that. I'm more focused on, some broader things. I would also say you need to have the right planning and operational discipline, but again, if you have the right people, those things will come.

 

Closing (24:52):

This has been Count Me In. IMA's podcast providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.