How their dynamic CEOs are positioning their companies for the future – and why you must, too
Ric Edelman: It's Thursday, February 2nd. I was just interviewed for an hour by Julia LaRoche. You can listen to that podcast at JuliaLaRoche.com. A pretty cool conversation we had, pretty wide ranging. I think you'll enjoy it. Also this coming Tuesday, February 7th at 3 p.m. Eastern, I'm hosting a webinar, What's Next for Crypto in 2023. We're going to talk with Matt Hougan, the CIO of Bitwise Asset Management, about regulation. Will the crypto winter get worse or will we see new all-time highs? This virtual event is for financial advisors. You can register for free at DACFP.com. And you'll get one CE credit as well. If you want to know what's happening for crypto in 2023, you don't want to miss this webinar.
I want to talk with you though, about what's happening with three different companies right now because the news has hit about all three of these companies and they together provide an astonishing theme that I think is really worth talking about.
The first one I want to mention is Franklin Templeton. You know, Franklin Templeton, one of the oldest and biggest mutual fund companies. They're 75 years old. And they were just profiled in the Financial Times newspaper, The Financial Times called Franklin Templeton an old-school stock picker. In fact, Franklin Templeton did its own investor survey back in 2020 and found that people considered it old-fashioned. Well, that's a bit of a problem if you're trying to build a business.
So the company is now reinventing itself. Jenny Johnson is the new CEO and the Financial Times says she is pushing quickly into new asset classes and technology. The company's got $8 billion in cash and so Jenny Johnson has become one of the boldest business buyers in the entire financial services industry. She bought Legg Mason for six and one half billion dollars. Benefits Street Partners, Advisor Engine, O'Shaughnessy Asset Management, Lexington Partners and Alcentra - this is a diversified array of companies in the financial sector, a big mutual fund company, an alternative credit investment firm, a digital wealth advisory firm, an index fund manager, a manager of alternative assets, and a specialist in private credit and debt.
Franklin Templeton, under Jenny Johnson, went from being a sleepy giant with $700 billion in assets to now $1.5 trillion. They're a true, a huge global franchise. One Wall Street analyst says, "Jenny Johnson, by nature is someone who's willing to fail while trying new different things". Now, you've heard Jenny Johnson on this podcast, as well as interviews with her key team that's focusing on digital assets. That's another area where Franklin Templeton is quietly and quickly becoming a leader. That's why Franklin Templeton is one of my sponsors. They're delivering investment solutions for financial advisors, and Jenny knows that I can help her get in front of those advisors and the investors that she's trying to reach. In other words, Jenny Johnson is reinventing one of the oldest mutual fund companies into one of the most dynamic players in the financial services industry today. She's not relying on the past. She's focusing on the future. And she's not afraid to change the company to meet the changing needs and demands of today's investors and advisors.
Another company that's doing that is Toyota. The current CEO is Akio Toyoda. He's 66 years old, the grandson of the founder of the company. He's been the CEO for 14 years. He's also been a critic of electric vehicles. And so Toyota, the company, is lagging behind the other auto manufacturers in bringing electric vehicles to the market. So what did Akio do?
He just announced his resignation and he has named his successor, Koji Saito, a 53-year-old engineer. Saito led the introduction of the first fully electric Lexus, which is owned by Toyota, and he's also been working on hydrogen powered cars. This is a guy focused on the future. Akio Toyoda says, "We're facing a once in a century change in the auto industry. Younger people should be placed in the right job so they can come up with the answer to what the future of mobility should be". That's a pretty profound acknowledgment.
And let's talk about what's going on at Rolls-Royce, our third profile. This company has been around since 1884. I don't need to tell you about Rolls-Royce, but they've now got a new CEO and he just delivered an astonishing speech to the company's employees. He told them that Rolls-Royce must transform the way it operates or it will not survive. Rolls-Royce, he said, is a "burning platform". He called the company's performance unsustainable and said, "this is our last chance". He emphasized that he's convinced he can improve the company, but he warned employees that they must, "think differently and act differently so this business corrects itself, and we don't have much time".
Wow. Franklin Templeton, Toyota, Rolls-Royce. These three companies are examples of CEOs who get it. Who realized that what made you successful in the past will not make you successful in the future. Angel investor David Rose has said it best. He said any company designed for success in the 20th century is doomed to failure in the 21st. He's right.
And so I ask you, what companies are you investing in? What are the stocks in the funds that you own? The big names that have been around forever merely because they've been around forever? Or are you investing in the new companies of the 21st century, the companies that are developing or deploying the innovative technologies that are going to change every aspect of life on our planet?
And what investment advisor are you relying on? Someone who is today still giving you the same investment recommendations they've been giving you for the past three decades? Or someone who's keeping current with technology and changing economic, political, social and environmental developments and is giving you the advice you need for the future that you're going to have - not the past of where you came from. I'm talking not just about advice about investments, but about college and career, home ownership, long-term care, retirement and estate planning.
And if you're that financial advisor, ask yourself how much of what you're telling clients today is identical to what you told clients 10 years ago or 20 years ago. If you want to serve your clients well today, if you want to attract new clients, you need to reinvent your practice. Covid forced you to make a lot of changes, but some of what's going on now is much more subtle, but no less vital. Read my book, The Truth About Your Future. Come to my webinars and live conferences. Get the continuing education you need so that you're staying on top of the latest trends so you can serve your clients best and build your practice to new heights. The future is arriving fast. You're either going to capitalize on it or you're going to be left behind. The CEOs of Franklin Templeton, Toyota and Rolls-Royce have made it clear where they're going to end up. What about you? Think about that.