September 19, 2025 • 50 mins
On this episode, Barry speaks with Jaime Magyera. She was recently tapped as head of retirement and US wealth for BlackRock. They discuss her career and unique experience working at one of the world's largest asset managers, trends in retirement and wealth management, the rise of alternative investments and more.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. This is Masters in
Business with Barry Ritholts on Bloomberg Radio.
Speaker 2 (00:17):
This week on the podcast Wow What Can I Say?
Jamie Majera is head of BlackRock's US wealth advisory business
as well as running their retirement business. Blackrock is the
twelve trillion dollar investment giant, the biggest asset manager in
the world. Jamie has been working for the firm effectively
(00:39):
since two thousand and one, where she began at Merrill
Lynch Investment Managers, which was merged with Blackrock in six
She's risen through the ranks and has really seen every
aspect of the wealth management and product services, everything from
ey shares to their Alpha products to alternate lives. She
(01:01):
has quite a fascinating history, and there are a few
people better able to describe and discuss how the wealth
management business is changing and where it's going than her.
I found this conversation to be fascinating, and I think
you will also, with no further ado, Black Rocks head
(01:21):
of US wealth advisory business, Jamie Majera.
Speaker 3 (01:28):
It is so good to be here.
Speaker 2 (01:29):
It's so good to have you. I've been looking forward
to this conversation. But I want to before we get
up to the US Wealth advisory business and retirement business
of Black Rock, let's talk a little bit about your background.
You go to University of Pennsylvania undergraduate. Would you study?
What was the plan?
Speaker 4 (01:47):
So?
Speaker 3 (01:47):
I studied psychology. I went to University of Pennsylvania. My
brother went there as well. My sister went there as well,
psychology major. I didn't have a plan. I didn't know
what I wanted to do. I was that kid that
loved working. So I had, you know, any job I
had when I was growing up, I just loved. I
was a babysitter, I worked at a bakery. I taught
(02:08):
tennis lessons. I did it all and I loved it.
Speaker 2 (02:10):
Bought tennis. You still play?
Speaker 3 (02:12):
I am incredible. So I don't play well or regularly
any longer. There is a story behind that, which maybe
I'll share with you. But my husband does play tennis.
He's incredible and he coaches at West Point.
Speaker 2 (02:27):
Oh wow, that's amazing. Yeah, So what was the first
gig right out of pe?
Speaker 3 (02:32):
So, so you know, I was a psychology major, and
I knew that I was fascinated with people and also
a distribution and I'll come on set in a second.
Because I was a music person. I loved music. I
wanted to be in the music industry. So my plan was,
do I go FBI criminal psychology or do I go
into the music industry?
Speaker 2 (02:51):
Very similar?
Speaker 3 (02:51):
Very similar.
Speaker 2 (02:53):
And I'm not being sarcastic because you're profiling people who
perhaps have certain deviant perspectives about the world.
Speaker 3 (03:00):
Yeah, I'll leave it there, okay. And so I had
to make a decision. And so I was going towards
the music industry. And so people always say, well, were
you a performer? Did you sing? Were you classically trained?
The answer is no. But I was fascinated with the
business of music and the distribution of music. And so
at that time, remember it was kind of napster, right,
so like things were going.
Speaker 2 (03:21):
Like late nineties, Is that what you're talking about.
Speaker 3 (03:23):
Oh yeah, so we're going from CDs to digital distribution.
And I just found it to be fascinating and what
did that mean for the business and the implications for artists.
And so I had this dream I was going to
be a big time record label EZAC. I had internships,
I got a job at the time it was Sony BMG,
and then I realized as I got my offer letter
(03:44):
that I wasn't quite sure how I was going to,
you know, sustain my life, pay my bills. My parents
helped massively with college, but there was some student debt
that I had to pay off. And so at the time,
my brother was a financial advisor. So I called him
up and I said, hey, big bro, what do you recommend?
What should I do? And I was thinking he'd give
me some financial advice, and his advice was, get a
real job that's going to help you pay your bills
(04:06):
and then you can go back into music after. And
so that's kind of how I made my way into finance.
Speaker 2 (04:11):
So what was the real job?
Speaker 3 (04:13):
So the real job was working at Mary Lynch.
Speaker 2 (04:15):
So your whole career, you've been in the same more
or less the same place. That's amazing.
Speaker 3 (04:19):
Yeah, and there's this theme as you kind of look
through different things I've done throughout my career. But I
started at Meryl Investment Managers, which was the asset management
arm of Mery Lynch, and I wanted to be the
farthest thing away from markets because I had no experience.
I didn't know what the markets were. I didn't even
know what a mutual fund was and so I joined
(04:40):
Merrill as an analyst in their analyst program and I
was a technology project manager.
Speaker 2 (04:45):
Wait, so as an analyst, did you become a CFA?
Did you go through that process or I did not?
Speaker 3 (04:50):
So you get all of your Series sevens and everything else.
But I was responsible for again let's date ourselves here.
The late nineties, early two thousands. E business was the thing, right, so.
Speaker 2 (05:02):
It's gonna be a big one day.
Speaker 3 (05:03):
It's gonna be big one day. There's this whole thing
called the internet. And so at the time, Meryl did
not even have a website for their financial advisors.
Speaker 2 (05:09):
How is that possible? I know, can you imagine thousand
and one, We're gonna We're gonna wait and see if
this thing.
Speaker 3 (05:16):
Becomes takes off, Right, I have a feeling, right, so
I have a good feeling. Yes, yeah, yeah, So that's
where I started.
Speaker 2 (05:23):
And so did you help build out the first set
of Merrill Lynch websites for their is this for outward
facing for clients internally for advisors and brokers or a
little bit of.
Speaker 3 (05:33):
Everything for advisors and brokers? And so that's where I
first learned, you know, the role of the financial advisor
and what it is to be a financial advisor and
how you serve your clients and how hard it is
and what it is to actually sell and support and
serve those financial advisors. But that was the job. It
was translating technology speak into business and client needs really interesting.
Speaker 2 (05:56):
So I know you've had multiple multiple roles at both
Marylyn Blackrock, Let's quickly walk up the ladder. So from that,
what was the next role?
Speaker 3 (06:06):
So I always had this idea that I wanted to
get closer to the client, so I'd move and you'll
see for my career, I moved into roles that were
closer to clients. So from there I went into marketing,
which you really learned strategic messaging and how to simplify
and help people understand what you're doing. I then went
into our retirement business. We're there. I used to help
participants understand how to enroll in their four O one
(06:28):
K plant. I mean literally going around the country helping
people figure out how to save and how to invest.
And then I moved back into the wealth business, which
is where I am today. Along with leading our retirement business.
And the wealth business was the first time when I
came back into it that I actually had direct client accountability,
and that was important to me because I had done
technology and marketing and product and strategy and everything else,
(06:50):
but I had never been responsible for helping to solve
client problems directly.
Speaker 2 (06:55):
And to clarify, you didn't just kind of move into
the world health business. You are the head of BlackRock's
US wealth advisory business. That is not like just You're
not just casually drifting into that space. You're running it.
So let's talk a little bit about how you got there. So, Maryland,
Blackrock merged in two thousand and six when the dust settled.
(07:19):
What was your title back then?
Speaker 3 (07:21):
So back then I had moved into marketing and I
was the head of marketing for our wealth business. Then
fast forward to Blackrock acquired BGI and I shares.
Speaker 2 (07:31):
I recall one of the greatest acquisitions in finance history.
Speaker 3 (07:35):
And a theme for Blackrock on just structural growth and
how we view where the world is going and how
we meet the needs to be there. But at that point,
leadership had asked me to bring together all of the
retirement businesses that were legacy Blackrock Legacy, I shares Legacy BGI,
and I was part of that team.
Speaker 2 (07:53):
In other words, turn into one company instead of all
these separate pies race. How long did that process take?
Speaker 3 (08:00):
It was, I mean every day. It was another step
in that process. And you know, we learn over the
years how important it is to integrate and to acquire.
When you acquire, you're acquiring for capabilities, but you're acquiring
for talent and culture. And so the match between the
firms is really strong, and that helped us to integrate
even faster.
Speaker 2 (08:16):
So you began this process late two thousand and six
and right around the corner comes to financial crisis. How
did that get in the way or affect this entire
post merger situation. It had to be pretty disruptive, certainly
on the client level. How did it affect what you
(08:37):
were doing?
Speaker 3 (08:37):
Yeah, I mean, of course it was disruptive. And I
think this kind of goes back to part of the
vision with Blackrock always was and I mentioned the term
structural growth, but what does that really mean. It means
durable engines of growth, resilient engine of growth, growth that
can persist market cycles. And so even through a financial crisis,
(08:57):
the fact that we had our I shares ETFE, we
had fixed income, we had equity, we had cash, we
had everything you could imagine, and we had a Laddin.
Remember Aladdin, our technology platform was massively helpful to so
many firms and institutions and governments during that time, So
we had multiple ways to lead through that and help
our clients through that crisis.
Speaker 2 (09:19):
Huh. Really quite fascinating. And back then, you know, it
was a couple of trillion dollars. Now black Rock is
what eleven twelve trillion dollars. That's the largest asset manager
in the world. I want to say Vanguard is probably
ten twenty percent behind. You never knit your heels, But
between Vanguard and Blackrock, these are two of the most
(09:42):
storied firms. And in fact, the new CEO of Vanguard
used to run a division over a great friend of mine, Sting,
which really just goes to tell I recall interviewing him
when he was at Blackrock and like, Hey, that guy's
going to go somewhere one day. But what's fascinating is
just how so unbelievably successful the ieshare business became. But
(10:06):
people tend to think of retail investors tend to think
about Blackrock in terms of I shares, But Blackrock is
really so much more. It's not only passive beta, but
there are alpha seeking strategies and as we'll discuss later,
there are alternatives. So there are a lot of things
going on at Blackrock. As head of US wealth advisory,
(10:27):
What is the core focus? What are the bulls that
you keep in the air all the time.
Speaker 3 (10:31):
Yeah. So one of the things I love about the
wealth business generally is that it is changing so rapidly.
It's dynamic. Every day there is something new. Investor preferences
are changing, there's different client segments, and as you said,
it's not just about I shares. I mean, we have
so many capabilities that we can bring to bear, and
so when we wake up every day, what we think
about at Blackrock is how do we make investing easier?
(10:52):
How do we get more people access to the capital markets?
And that used to be public markets now it's public
and private markets. But that's what we do. And when
you think about our wealth business, we do that through
financial advisors and with wealth management firms. So our job
in our wealth business is to help advisors and the
firms that they work for build better portfolios for their
(11:14):
clients so that they can achieve their dreams. And we
aim to power their growth, to help them scale their
businesses so that they can do what they do best,
which is serving their clients. And so that's what we
wake up doing every single day in the wealth business.
Speaker 2 (11:27):
So I've seen a variety of areas Blackrock model portfolios.
If you have a bond ladder that you have concerns about,
you can run it by the Blackrock folks and hey,
here are your options. We really haven't talked about SMAs,
which I know is a really fast growing part of
the business. Is there a priority or are all these
(11:49):
things just day by day you're just checking off different
boxes and working on different projects.
Speaker 3 (11:54):
Yeah, So our priority is serving the client, meeting their need.
And when we look at the wealth market it and
talk to advisors every single day, there's really three call
and client segments investor segments that advisors are trying to
serve and win and build relationships with, and we're trying
to help the advisor do so. So those three segments,
think about the next gen investor, think about women, and
(12:16):
think about high net worth, and we'll hit on kind
of direct indexing and everything that we do through that.
But if you think about those three segments, and it's
a broadway to think about this. You know, there's exceptions
to every rule here. But next gen what are we
talking about. It's the millennials, right, it's Z and gen Z.
It's forty four percent of the population. So it is
a massive number by quantity, but it's also a massive
(12:39):
number by assets.
Speaker 1 (12:40):
Right.
Speaker 3 (12:40):
That generation is going to inherit seventy jillion plus in
assets over the next few years. And so what's interesting
and what's different about these folks is that they want
to invest in line with their beliefs. They're incredibly tech savvy.
In fact, they trust digital and social more than they
might even trust humans these days. But they want advice advisors,
(13:00):
and they want to invest in things that are new
and interesting. And so you think about bitcoin, right, bitcoin?
Eighty plus percent of millennial millionaires hold crypto. They're more
inclined to use crypto than stocks and mutual funds. So
we were doing and investing and innovating in in service
of client demand, is creating a bitcoin ETF.
Speaker 2 (13:21):
I BIT I bit one of, if not the fastest
growing ETF in history, fastest to a billion to five
billion to ten. I haven't even looked at what it is.
Eighty five unbelievable. This is less than two years old, right, Yes,
that's incredible. Eighty five billion dollars and no passwords, no
loss this, no that that they've taken. What was a
(13:43):
You know, whenever I see the return claims for bitcoin,
I always have to point out, hey, twenty thirty percent
of coins have been lost, last words have been lost,
drives break, so subtract a third off of that. But
really it's it's this or zero if you totally lost it.
You guys have made this a traditional financial product. So
(14:07):
it's pretty amazing, and we've seen like a general acceptance
of hey, everybody should have one percent or maybe a
little more, a little less, whatever your needs are of
some bitcoin, and this seems to be the easiest way
to do it.
Speaker 3 (14:20):
I think we'll see a lot more of that too.
I think we're going to see a lot of firms
coming out now to say we are actually going to
allow advisors to incorporate this into portfolios on the FEEBA side,
on the advisory platforms, and so I think this is
just the beginning, but it's also just a perfect example
of if you understand where clients are going, and you
have the capability set to innovate and build products around it.
(14:40):
Then you can deliver those products to market and help
advisors better serve their clients.
Speaker 2 (14:44):
And I Bit's a perfect example of that, really really
quite fascinating. Coming up, we continue our conversation with Jamie
and Manjera, head of black Rocks US wealth advisory business
and head of black Rocks Retirement Business, discussing wealth management
and retirement. I'm Barry Ritholts. You're listening to Masters and
Business on Bloomberg Radio. I'm Barry Ridults. You're listening to
(15:15):
Masters and Business on Bloomberg Radio. I'm speaking this week
with Jamie Majera. She's head of black Rocks US wealth
advisory business as well as retirement business. So let's talk
a little bit about both of these. I want to
start with the wealth management business. This is more than
just I shares. This is very holistic and comprehensive. Tell
(15:38):
us a little bit about the US wealth advisory business.
Speaker 3 (15:42):
So our business is really focused on helping those advisors
who are really trying to go after multiple client segments
and help those client segments actually meet their goals. And so,
you know, we talked a little bit about next gen
and kind of the millennials and gen Z. The other
segment that is just growing an incredible rate is women.
Women today control a third of the world's assets. In
(16:04):
a few years, it'll be fifty percent. It'll be seventy
percent by twenty fifty seventy percent. And you know, part
of this is, let's talk about what's driving this. Women
are creating wealth right. More women are having careers or
reaching executive levels or starting their own businesses. Women are
also inheriting wealth right from family or from parents. Women
are also inheriting wealth. We call it the horizontal wealth
(16:26):
treadsours right divorce or widowed.
Speaker 2 (16:28):
Tent taut live the husband. Yes, so it's a way
station before it goes to the kids.
Speaker 3 (16:32):
Absolutely, absolutely, and women are quite frankly underserved in this market.
Women were not seen as as a significant growth segment
in the past, and now people are starting to come
around to wait a minute, this is a very important
segment that we need to get right. And women do
things differently, and so advisors need to help women do
things differently, and they need to serve them a little
(16:54):
bit differently. And women, you know, like to have impact.
We talk about the fact that some people invest as
a means to an end. You know, women tend to
invest as a means to what's next, right, they want
to impact their community, they want to impact their family.
They're always thinking about what can I do with this money,
as opposed to I want to make more money, and
so that's it's a nuance, but it's a difference that
(17:16):
really requires a very personal relationship with a financial advisor
and trust.
Speaker 2 (17:21):
You know, it's been fascinating seeing what was previously a
male dominated industry slowly awakened to the idea that hey,
women have money and they're going to continue to accrue
more money. Maybe we should be more open to coming
up with a way to serve that demographic. It's like amazing.
(17:43):
It's taken so many decades for the industry to adjust,
but it's shockingly slow and sometimes stuck a little bit
in the past.
Speaker 3 (17:51):
Yeah, it is.
Speaker 1 (17:52):
You know.
Speaker 3 (17:52):
The wake up call I think for many is when
a financial advisor has a client, maybe it's the man
in the household, and perhaps there's a divorce, or there's
a or the or the client passes away. Listen, seventy
percent of women leave their financial advisor leave their husband's
financial advisor after a divorce or death.
Speaker 2 (18:14):
So obvious with divorce, but with death, it tells you
what a terrible job that advisor did speaking to both
of those. And you know, I've heard stories from advisors
about people kind of agast at somebody ignoring the spouse
in the room. It's just a totally wrong, wrong approach.
How does Blackrock help their advisor clients address this issue?
Speaker 3 (18:39):
So we believe there's such an opportunity for advice here
right there. I mean, there's just this whole world of
women who want advice, they want to coach, they want
a partner, and so what we do is we work
with financial advisors to help them better serve these clients.
We do that through products. So for example, women want
to be able to customize and personalize their investments to
(19:02):
things that are important to them, so we'll talk about
direct indexing. But direct indexing and what we're doing through
a perio is a great way for an advisor to
serve his client and help her have impact with what
she's doing. We also care deeply about educating advisors on
this And to your point, it's not that the industry
just woke up, so nobody was really talking about it,
(19:24):
and so now we're really invested in talking about this
and helping and doing events and getting advisors to bring
their prospects in and we'll join them. We are a
minority investor in a company called Willow which focuses exactly
on this. It builds practice management and education and actually
helps connect female investors to advisors, and so we're really
(19:44):
focused on this, and it's just such an opportunity for
advice but also an opportunity for advisors to grow their business.
Speaker 2 (19:50):
So you mentioned aperio. Let's talk a little bit about
direct indexing. I'm a big fan of it. We happen
to have started on a different product six years ago,
so we've been pretty locked in on that. Why do
you believe it's gaining so much popularity amongst both advisors
and clients.
Speaker 3 (20:08):
Yeah, so direct indexing it still sounds like a new
phrase to many. It's been around for quite some time,
and previously it was really used for ultra ultra high
net worth families and direct indexing and ability to create
a portfolio, a custom index, if you will, of securities
that you can choose and select what securities you want
(20:28):
in that portfolio to align with how you want to
invest and you can also then manage taxes more effectively
in there because you can tax loss harvest. And so
it's a brilliant approach for not only aligning with your
beliefs on how you invest, but also really living in
an after tax world. We need to better look at
tax alfa in our investment portfolio.
Speaker 2 (20:49):
So I'm so glad you said that. When we first
started working with O'Shaughnessy on their product, I was on
the impression that would first be like, the most common
use case would be, Hey, I don't want tobacco or guns,
or I don't want this whatever. I know. The New
York Bishop's Archdiocese Investment Pool uses it to say, hey,
(21:10):
we don't want a board efficients in our portfolio or
anything related to stuff that is in contradiction with our
belief system. I thought that would be the biggest use
And then hey, I work for Apple, so I don't
need all this tech. You could tune down tech in
my portfolio, and then taxes would bring up the rear.
(21:31):
I had it exactly backwards. In the past five six years,
after tax returns, tax alpha seems to be the dominant
usage for this concentrated portfolios low basis cost inherited stock.
Things like that really are a challenge to dealing with
capital gains. Tell us about black Rocks experience.
Speaker 3 (21:52):
With this, Yeah, so we agree completely. In fact, back
in twenty twenty one, we acquired the firm Aparo and
Aperio is a pioneer in direct indexing. A Perio led
the market working with ultra high networth. They called it
the new institutional for the purpose of tax management after
(22:12):
tax returns. And you think about it, we live in
an after tax world. I bought my coffee with after
tax dollars. Yet we manage our investments before taxes. And
so we saw this trend coming and we could have
built it. It would have taken us probably a lot
more time. But we saw what Aperia was doing in
their capabilities and just their approach, and we thought, man,
if we could match that with our distribution reach and
(22:33):
our scale, we could really make some wonderful, wonderful solutions
for our clients. And that's what we did. We acquired
a Perio and we have a very significant direct indexing business.
And to your point, Barry, it is predominantly tax customization,
tax management.
Speaker 2 (22:51):
Right any especially when we see markets or at all
time highs. People are sitting on enormous gains. Sometimes that
becomes very concentrated, to say nothing of people who work
for tech stocks and they've accumulated or other companies that
have just accumulated so much value that hey, maybe I
have too much single stock risk and I want to
(23:12):
diversify into things. Tell us, what else does Blackrock do
with direct indexing? How do you differentiate yourself? For everybody
these days seems to have a direct indexing product? What
makes black Rocks special or unique? Yeah?
Speaker 3 (23:27):
So, you know, one of the things that we did
is when we acquired a Perio, we already had a
very significant separately managed account business. I mean for decades
we had fixed income and active equity, and what we
did not have was that direct indexing capability. When we
brought a Perio into Blackrock, we then pulled it all
together and said, how can we actually make all of
(23:47):
these capabilities together better serve our clients. So that means,
for example, tax loss harvesting on UNI portfolios, right, so
being able to take a capability and not just do
it on equities, but do it on fixed income. Last
year we acquired a company called spider Rock. I'm not sure,
if you're familiar with spider.
Speaker 2 (24:04):
Structured notes, we've used them in the past.
Speaker 3 (24:06):
Yeah, and option over similar kind of.
Speaker 2 (24:09):
Not quite the same, but occasionally similar, a different solution
to a similar problem.
Speaker 3 (24:14):
Yeah. And to your point on concentrated stock, what a
great way to hedge that concentrated stock position. If I
want to continue holding that stock, but I want to
hedge against it and manage the risk, or I want
to manage for tax implications, why not run an option
overlay on top of that. And So the beauty of
what we're doing now is we're bringing all of these
discrete capabilities together into one portfolio, one holistic offering. And
(24:37):
so you'll be able to will be able to work
with advisors and say, let's look across your client's entire
book and let us help you build a whole portfolio
of public markets, private markets, direct indexing, option overlay, all
in one. Really solving for unique needs, customized, really.
Speaker 2 (24:54):
Really quite fascinating. So you mentioned you work with a
lot of different wealth management firms. What is that relationship
look like? What are these firms looking for from Blackrock?
Speaker 3 (25:05):
So I remember when I first started in the wealth business,
years and years and years and years ago, you know,
the relationship between asset managers and wealth management firms was
often a kind of a vendor relationship. Yes, right, it
was you have a product, let's put it over here.
Our position and our partnership with wealth management firms today
(25:26):
is the only word I would say. It's like true partnership, right,
it's aligned interests. We are there to not only provide
them with investment capabilities, by the way, we have incredible
breath to do so, but we're also there to help
them with their technology needs, their operational and scale needs,
their advisory needs. How can we help them think through
(25:46):
how they can grow organic growth? That's everyone's challenge. How
do I grow organically? Well, you have to scale your
business and increase your margins to do so. We help
them think through all of that. And the other thing
that we do is we have incredible people that are
so expert and working with these firms and advisors every
single day to help them achieve their goals. And our
view is if we can help our clients, the wealth
(26:09):
management firms and their advisors grow, will naturally grow with them, right,
So our job is to help them grow.
Speaker 2 (26:14):
So let's talk retirement. We're recording this post Labor Day.
But by the time this comes out, Blackrocks Big Report,
the Read on Retirement will be out tell us some
of the big takeaways for this.
Speaker 3 (26:30):
So it's really special for me personally because I've just
now returned into the retirement business and have the responsibility
for this retirement business. And I say it's a responsibility
and an honor because we think about the thirty five
million people across America that we are helping to save
for retirement, like that is what we do. Over half
(26:51):
of the assets at Blackrock. Not many people know this,
Over half of the assets at Blackrock are helping people
save for retirement in some way.
Speaker 2 (26:57):
Really, Also, when you say that it's for a wis
for three bees.
Speaker 3 (27:01):
IRA's annitionis dB.
Speaker 2 (27:04):
Wow.
Speaker 3 (27:04):
Yes, that's amazing over fifty percent and that's not a
guess tho. Yeah, not many people know that, and so
you know, it's something that we are so proud of
and really for me, it was always my north star.
I remember when I was first in the retirement business
at black Rock, I was able to go home and
tell my parents what I did and explain it to
them in a way that I felt so good about
(27:25):
and they understood, and that's what we get to do
every day. You mentioned the survey, So it's our ten
year anniversary of doing the survey. We've been doing it
for a decade now, and every time we go out,
we go to plan sponsors, who are the employers building
the plans and offering them to their employees. We go
to the savers, who are the employees at massive corporations.
And then we also talked to retirees, people that have
(27:47):
saved and had access to a four to one K plan,
but they're now no longer working and they're in retirement.
And so this year I'll break it down in this way.
Savers those that are still working, the employers of these
are the employees of this company. Savers have the highest
confidence we've ever seen, like off the charts confidence. Now
it's come down a little bit because of market volatility.
(28:08):
And I think what that calls out is, of course
we're all more confident when markets are rising, but very
strong confidence in their ability to retire. However, we've seen
savings come down, and so the question is is that
because of confidence.
Speaker 2 (28:22):
When you say savings, we mean savings.
Speaker 3 (28:23):
Rates rates, right, Savings rates have come down thank you.
And so the question is is that because of confidence
or is that because actually people are spending more money
they need to maybe inflation maybe right, So like we
have to dig into that a little bit more. But importantly,
savers are seeing more confidence or feeling more confident. You
then ask the people in charge, the experts who are
building those plans. Confidence is very low, in fact lower
(28:47):
than we've seen. And I'll come back to that in
a moment, but I think there's a really interesting tension
there of perhaps over confidence in savers and reality in
those building the plans. And then when we move on
to retirees, very low confidence once they've retired and their
ability to actually figure out how to sustain their life
in retirement. And so some of the actions are some
(29:09):
of the insights that really came out of this. One
Savers are looking for access to professionally managed solutions, think
target date funds, right life path portfolios. Black Rock invented
the target date fund thirty years ago, but target date
funds are very very important. Two is, savers are looking
for some type of clarity or solution around guaranteed income.
Give me something that will just tell me what I'm
(29:31):
going to be able to spend every month, and better yet,
make that guaranteed so I know I have it every month.
Speaker 2 (29:37):
So what does that look like? Are we talking an
annuity product or something else?
Speaker 3 (29:41):
So imagine a target date fund with a guaranteed income
sleeve in that. So we have a product called life
Path Paycheck. Life Path Paycheck is among a few other
solutions in the marketplace, but Life Path Paycheck is the
fastest growing guaranteed income solution. What's amazing about this solution, though,
is that it gives employers and employees the choice to
(30:02):
turn on that guaranteed income. So you're investing, investing, investing,
and then you come to a point and you decide
do I want that guaranteed inclip the switch, flip the switch.
Really really interesting. And then the third point is people,
both employers and employees are saying we need to close
the gap on this saving shortfall, and we need to
find more returns and more protections. And so that's really
(30:23):
where you start to point to private markets.
Speaker 2 (30:25):
So the I think of the traditional retirement savings as
classic sixty forty, and what I've been reading about and
hearing about for the past ten plus years is hey
sixty forty isn't going to get it done in the future,
especially with yields as low as they've been up until
twenty twenty two. Anyway, how do you see this side
(30:46):
of the business changing. Is it no longer sixty forty,
is it sixty thirty ten, or what does this look like?
Speaker 3 (30:52):
Yeah, so it's you know, the one thing that's different
about the retirement space is it's versus the wealth space
is retirement is quite slow moving. The market itself is
quite slow moving. And so if you actually look back
twenty years, I would say there's probably less change over
twenty years then we'll expect to see over the next ten.
Meaning people are getting very focused policymakers, employers, asset managers,
(31:14):
record keepers on how do we close the gap between
this retirement saving shortfall? And so to your question, the
sixty forty worked. It works, but actually if you were
to have a fifty to thirty twenty, but strategically and
thoughtfully make sure that that glide path, that target date
fund that also incorporates private markets is doing so in
a way that helps people get more diversification, gain alpha,
(31:40):
possibly gain more income. We've done studies that show you
can get fifteen percent more return on a portfolio with
private markets a target date fund with private markets over
a forty year retirement. And so that's something to talk.
Speaker 2 (31:52):
About, not nothing. That's pretty substantial. Coming up, we continue
our conversation with Jamie Majera, head of Blackrocks US wealth
advisory business as well as head of BlackRock's retirement business,
discussing the rise of alternatives in the investment space at Blackrock.
I'm Bury Ridults. You're listening to Masters in Business on
(32:15):
Bloomberg Radio. I'm Bury Ridults. You're listening to Masters in
Business on Bloomberg Radio. My guest this week is Jamie macgira.
She is the head of black Rocks US wealth advisory
business as well as the head of their retirement business.
(32:37):
The firm manages over twelve trillion dollars. So let's talk
about alternatives. This has been one of the fastest growing
space in investing. Tell us what Blackrock is doing. I
think a black Rock of ey shares and biggest manager
(32:58):
of public equities and in the world, what is Blackrock
doing with alternatives?
Speaker 3 (33:03):
So if you think about the capital markets, public is
only one piece of those capital markets, and for so
long private markets the other part of capital markets have
been utilized for institutions or even the ultra ultra ultra
high at Worth, and so there is a world to
believe strongly an investment thesis that if you're going to
(33:26):
do the best thing for a portfolio, for an investment,
you need full exposure to public and to private markets.
And so Blackrock is doing a lot to help advisors
and their clients have easier access to private markets. So
you may recall last year we had a whirlwind news
announcements around HPS, GIP, pre Quinn, three acquisitions all related
(33:51):
to private markets. Pre Quinn related to data, GIP, infrastructure, HPS, credit,
and private financing. And so we acquired these firms so
that we could offer to our clients not just the
full power of the capital markets through public but now
also through private. And so we're very focused on really
(34:11):
democratizing access, helping everyday people, when appropriate, gain access to
this very important part of the capital markets.
Speaker 2 (34:19):
And I mentioned earlier sixty forty. You peel ten percent
off the sixty and ten percent off the forty, and
you end up with something that looks like fifty thirty twenty.
Is that the future of this because typically we see
a lot of privates. They tend to be locked up
for a long period of time. They tend to be
complex to administer, custodians and reporting and fees. It's like
(34:42):
you buy an eye share, it's easy. You want to
get involved on the private side, it just seems so
much more complex for anyone less than I don't know,
pick a number, twenty million, ten million, and five million.
So what does the future of alternative investment look like
at Blackrock?
Speaker 3 (35:00):
Yeah, so you hit on it, right. I mean, it
was so hard for people to gain access to it.
It was complicated if they were able to get access
to it. And to your point, liquidity was not necessarily
a top priority for various reasons. When you think about
where the market is going now, there's just been so
much change over the wealth industry on how the wealth
(35:20):
industry as a whole is starting to modernize access to
private markets. And so one thing we are doing at
Blackrock is we've focused very much on technology partnerships that
allow and relieve the advisor of all of that operational complexity.
So you think about a firm like I Capital, I Capital.
Speaker 2 (35:40):
Right of which you are on the board of.
Speaker 3 (35:42):
I am on the board. And you know, I Capital
has done so much to actually pave the way for
advisor's ability, wealth management firm's ability to access private markets.
But they are a technology platform. You still need the products.
And to your point on draw down and liquidity, we've
done so much work to build solution that actually are
semi liquid and that provide that liquidity on a regular
(36:05):
basis for advisors and their clients. And so that's something
that has really held advisors back in the past. I
think the last point vary is it's still new to
so many and there's a lot of education that's needed,
and you know, it's education on the asset class and
what does this really mean? And how do I actually
strip the ten percent here and the ten percent there?
(36:25):
And so we've gone a step further to say, how
do we make it even easier for advisors to build portfolios,
Not that I have my private markets over here and
my public markets over there and another account, but instead,
how do I build a portfolio that's one account and
it holds public and private together in one portfolio, that's
professionally managed asset allocation. All of the due diligence has
(36:46):
been done, and so recently, we've engaged in partnerships with
firms like GEOL and I Capital to be able to
bring models to market strategic asset allocated models that are
professionally managed, that incorporate private markets alongside of public markets.
Speaker 2 (37:02):
So the pushback I hear from various people about alternatives.
They're expensive, they're liquid, you have these long lockups. Doing
due diligence is complex and expensive. All of the back
office aspect seem to be like a series of one offs.
There's no real scalability. How are you addressing these issues?
Speaker 3 (37:25):
We have found a way to scale and make it
more convenient. So all of that work that you just
talked about, the due diligence, the operations, the complexity, we
have taken that on. We have built model portfolios that
do all of that for the advisor. The advisor just
has to offer that to their client.
Speaker 2 (37:42):
Is this in an SMA or is this how does
this so? My firm we wear black Rock Vanguard, a
handful of other The bulk of our portfolios, either direct
indexing or mutual funds or ETFs, looks like that. Some
clients say, what do you offer in terms of alternatives?
And we have to click off and run of stuff.
(38:04):
And what I've noticed is once you start working into
the here's the costs, and here's the lockup, and here's
what the reporting looks like, and it's held at a
custodian here, the complexity tends to be like, is this
really worth it? Well, theoretically, it provides diversification, and historically
there have been some cases of outperformance. All that comes
(38:27):
off the advisor's plate and you guys handle all of it.
Speaker 3 (38:29):
So, if an advisor wanted to build a portfolio for
you, you're the client. The advisor could call Blackrock, could say,
I want to build a custom portfolio. I wanted to
have this component of public markets, maybe it's I shares ETFs,
maybe it's direct indexing APERIO. I would like it to
have this component of private markets, perhaps it's Blackrock Credit,
Blackrock Equity on the private side. We will customize that
(38:51):
for them, and then it's waiting for them on a
platform like geowealth, which is a you know, geo wealth well,
a technology platform that will automatically rebalance it for them,
and that advisor can now then invest their clients in
that portfolio.
Speaker 2 (39:04):
How about if a firm comes up to you and says, Hey,
we're pretty good on the stocks and bond side, we
really need help on the alt side. And we have
such embedded long term gains that it's painful to peel
too much off. But going forward, we want to build
this into what we offer and add this to existing clients.
(39:25):
What does that solution look like?
Speaker 3 (39:27):
Call Blackrock. We have a team of you asked about
CFAs earlier. We have a team of CFAs portfolio consultants,
tax economists who do nothing but work with advisors every
day on solving those problems. They will work, they will consult,
they will help them take the portfolio they have. We
want to meet the advisors where they are right, so
(39:47):
we want to help them build on what they have,
and we will work with them to take that portfolio
and transition it into whatever the destination is they're going for.
We'll work with them in a way to do it
tax efficiently and at the appropriate cadence for their client.
Speaker 2 (40:00):
And you guys very successfully took crypto and bitcoin and
put it into an ETF. Are we ever going to
get to a point where alts become an ETF product?
Speaker 3 (40:10):
Look, I think there is a world where so much
can happen right in the next five years. I think
we're going to see a lot of things around private markets.
Part of that is solving for data and having the
transparency around the private markets. What is an ETF, right,
it's transparency into that index. Part of our thought process
in acquiring pre Kanals would be able to offer data
(40:31):
transparency around private markets. But I also think that sometimes
people naturally go to ETF as kind of shorthand for liquidity,
convenient and low cost. And I think there's a lot
of ways that we have to figure out as an
industry and black Rocks working on this right now. How
do you structure and build vehicles that allow for liquidity,
(40:52):
allow for lower cost, and allow for easier access, less
complexity around private markets. Maybe it's an ETF, maybe it's
something else.
Speaker 2 (41:00):
Yeah, liquidity is always the challenge when you have an
investment product that buy design is supposed to play out
over five, seven, eight years. They're not public for a reason.
They need the breadth for whatever that market cycle is
to realize those gains. So I get the challenge, what
are you doing to educate advisors and clients about what
(41:21):
this process looks like.
Speaker 3 (41:23):
I'm glad you asked that because I keep coming back
to liquidity is a challenge when it does not match
an expectation of a client, and so advisors need to
fully understand what they're working with when they delve into
private markets, and in some cases it is a five
to seven year lockup if they're doing drawdowns. In some
cases you do have a liquidity interval every quarter. And
(41:44):
so we are working with advisors all across the industry
to help educate them on the new type of private markets,
the new vehicles, the semi liquid structures, but then more
so we're working with them to help them understand how
do you actually put that in a whole portfolio. Talk
to me about how private markets sits alongside of public
(42:06):
markets and what that does for the risk profile, for
the return profile, and for the liquidity profile.
Speaker 2 (42:13):
And Blackrock launched a model, i want to say, earlier
this year that uses both private and public assets under
one ticker. That sounds like really challenging to put together.
Tell us a little bit about that.
Speaker 3 (42:26):
Yeah, it was challenging, very challenging, and it was something
that we could not do alone for all of the
reasons you mentioned. It took operations and technology platforms like
I Capital. It took operations and rebalancing and trade platforms
like geowealth to be able to allow us to deliver
this portfolio. So this was something that we announced earlier
(42:49):
this year alongside of Geowealth and I Capital, and it
was the first of its kind in the industry. A
model portfolio that in one model, in one account, you
can have of public and private automatic rebalancing customized for
your client, done so easily, so conveniently.
Speaker 2 (43:07):
Some of what you're describing sounds a little bit like
OCIOs that kind of were the rage a few years ago,
outsource CIOs where a professional manager can bring a higher
level of professional wealth management to a smaller shop. Tell us,
is this similar to that or what are the parallels?
Speaker 3 (43:27):
Yeah, it is one of the most accelerated trend we
are seeing in the wealth market right now, which is
this whole notion of outsourcing and whether an advisor is
doing it because they want to professionalize what they're offering
to their client, or whether an advisor is choosing to
outsource because they want to save time and their value
(43:47):
is being with the client and talking about the holistic
wealth plan, not the investment management component of it, and
so they turn to Blackrock to be the outsourced provider,
and so we have a model's business, which is effectively
ocio business. A model's business for the wealth channel is
three hundred and fifty billion today. It's grown rapidly over
(44:07):
the past few years. We think that'll double in the
next few years. And it's because advisors are turning to
us to say, please, let us outsource to you. And
it's not just advisors, wealth managers are doing the same
because again, wealth managers are going to focus on their
core value, which is serving their clients, helping their clients
build financial plans, and helping them navigate their wealth picture holistically.
(44:29):
They turned to black Rock to help them scale their
investment management and that's where our outsourcing capabilities come in.
Speaker 2 (44:35):
So we've talked about wealth management, we've talked about I
shares and as well as alpha pursuit and retirement planning.
My last question for you is what do you think advisors, clients,
investors are not thinking about but perhaps should be. What
important topics It could be an asset, it could be
(44:55):
a geography, it could be a policy or data point.
What do you think is getting over looked but just shouldn't.
Speaker 3 (45:01):
I think taxes is still not being discussed enough. Taxes
as a concept. I mean, there is so much value
you can bring as an advisor to your client by
just having that conversation asking the question. So I would
encourage everyone to do that. That is such a way
to build loyalty, trust and deep in relationship. And by
the way, your client starts to tell you where they
have assets elsewhere. The other area, I would say, is
(45:24):
just really thinking about the future growth drivers of our economy.
So infrastructure AI. We didn't talk about AI, but.
Speaker 4 (45:32):
That the another thing might be big ones exactly, but
you know, you.
Speaker 3 (45:37):
Think about some of these future growth drivers infrastructure as
part of you know why we acquire GIP, but we
have I share solutions that really align with infrastructure as well.
And I just think that's such an under discussed opportunity.
Speaker 2 (45:51):
Really interesting. All Right, I only have you for a
few more minutes, so let's jump to our favorite questions
that we ask all our guests, starting with tell us
about your mint who helped shape your career.
Speaker 3 (46:02):
So this is such a good question and hard question.
I will answer it this way. There are so many
I love to have a board of director's approach, Like,
I have this whole crew of people that I go
to for different things, and I truly like, you know,
you mentioned Salim Ramsey, He's one of them. Martin Small,
Rob Goldstein, Rob Carpedo, Mark Weedman, Like there's so many
(46:23):
Ann Ackerley who used to run the retirement business at
Black Rock, and they've all played a different role in
my career and in my life.
Speaker 2 (46:30):
Huh really really interesting. Let's talk books. What are some
of your favorites? What are you reading right now?
Speaker 3 (46:36):
Lama Lama red pajama.
Speaker 2 (46:39):
To your kids at night?
Speaker 3 (46:40):
Is that what that three year old he loves Lama Lama.
So any Lama Lama you can imagine. But actually I
just finished a great book for the second time. A
more beautiful question, huh, warren Berger. It talks about the
art of inquiry and using inquiry too. I mean, gosh,
the heart of any in event. Why does the world
(47:01):
not have this? What if the world did have this?
How do we get the world to have this? And
so it really talks about the art of inquiry as
a way to better understand, to fuel curiosity, and to
innovate and create better solutions.
Speaker 2 (47:15):
I love that name. I'm gonna check that out. Let's
talk streaming. What are you watching or listening to these days? Netflix? Amazon? Podcasts?
Tell us what's keeping you entertained?
Speaker 3 (47:25):
So I have this this Barbell approach. I go, I
love reality TV below Deck? Do you watch Below Deck?
Speaker 2 (47:32):
No, but I know plenty of people.
Speaker 3 (47:34):
Who do so good. But that's kind of one side
of it. The other side of it is I like intensity. So,
like Mayor of Kingstown, I'm watching Terminal List Dark Wolf
right now. I think that's on Amazon. It is very good, basically, Yes,
Navy Seal turna operative.
Speaker 4 (47:54):
Very interesting, right, yeah, yeah, we just finished Killing Eve.
Oh my wife watched it, loved it and said you
have to watch this, and she rewatched it with me.
If you like that sort of high intensity espionage, really
great cast, really strong recommend So our final two questions,
(48:16):
what sort of advice would you give to a recent
college grad interest in the career in retirement services, wealth
management investing?
Speaker 2 (48:25):
How would you advise them?
Speaker 3 (48:26):
So I go back to my way my entry into
this industry. I didn't know the first thing about anything.
I didn't think I wanted to be in this industry,
but I went in with open eyes and I asked
a lot of questions, and in some ways it was
like because I didn't have the experience, it made it
easier for me to be just like an everyday person
that we were trying to serve. And so I say,
come into this industry. You don't need a traditional background.
(48:48):
In fact, I prefer people not to have a traditional
background of finance or econ. Come into this industry and
help us make it better.
Speaker 2 (48:55):
Love that and our final question, what do you know
about the world of wealth management retirement services? Investing today
would have been useful twenty five years or so ago
when you were first getting started.
Speaker 3 (49:08):
I was really fortunate to have my father tell me
that the first thing I needed to do when I
got a job was start saving in an ira and
in my four one K and even when it hurt
to do, I did it. I wish I had known
back then that I could have been saving in many
different ways. I could have been investing in many different ways.
And so you know, to anyone who is out there
thinking about are they saving enough or investing enough, the
(49:30):
answer is probably know and you should do more. And
there's so many ways to do it. You can use
a financial advisor, you can go direct. You can do
it in many different ways, but just do it. Just start.
That's something I would have done.
Speaker 2 (49:42):
Huh, really really good advice. Thank you Jamie for being
so generous with your time. We have been speaking with
Jamie Majera. She's head of black Rocks US Wealth Advisory
Service as well as head of black Rocks Retirement Business.
If you enjoy this conversation, well, be sure and check
out any of the previous five hundred and fifty we've
(50:04):
done over the past eleven years. You can find those
at iTunes, Spotify, YouTube, Bloomberg, wherever you find your favorite podcast,
And be sure and check out my new book How
Not to Invest The ideas, numbers and behavior that destroys
wealth and how to avoid them How Not to Invest
(50:25):
at your favorite bookstore. I would be remiss if I
did not thank the Crack team that helps put these
conversations together. Meredith Frank is my audio engineer. My producers
are Anna Luke and a Lesis Noriega. Sage Bauman is
the head of podcasts at Bloomberg. Shoran Russo is my researcher.
I'm Barry ert Hants. You've been listening to Masters in
(50:48):
Business on Bloomberg Radio,
Bloomberg Audio Studios, Podcasts, radio News. This is Masters in
Business with Barry Ritholts on Bloomberg Radio.
Speaker 2 (00:17):
This week on the podcast Wow What Can I Say?
Jamie Majera is head of BlackRock's US wealth advisory business
as well as running their retirement business. Blackrock is the
twelve trillion dollar investment giant, the biggest asset manager in
the world. Jamie has been working for the firm effectively
(00:39):
since two thousand and one, where she began at Merrill
Lynch Investment Managers, which was merged with Blackrock in six
She's risen through the ranks and has really seen every
aspect of the wealth management and product services, everything from
ey shares to their Alpha products to alternate lives. She
(01:01):
has quite a fascinating history, and there are a few
people better able to describe and discuss how the wealth
management business is changing and where it's going than her.
I found this conversation to be fascinating, and I think
you will also, with no further ado, Black Rocks head
(01:21):
of US wealth advisory business, Jamie Majera.
Speaker 3 (01:28):
It is so good to be here.
Speaker 2 (01:29):
It's so good to have you. I've been looking forward
to this conversation. But I want to before we get
up to the US Wealth advisory business and retirement business
of Black Rock, let's talk a little bit about your background.
You go to University of Pennsylvania undergraduate. Would you study?
What was the plan?
Speaker 4 (01:47):
So?
Speaker 3 (01:47):
I studied psychology. I went to University of Pennsylvania. My
brother went there as well. My sister went there as well,
psychology major. I didn't have a plan. I didn't know
what I wanted to do. I was that kid that
loved working. So I had, you know, any job I
had when I was growing up, I just loved. I
was a babysitter, I worked at a bakery. I taught
(02:08):
tennis lessons. I did it all and I loved it.
Speaker 2 (02:10):
Bought tennis. You still play?
Speaker 3 (02:12):
I am incredible. So I don't play well or regularly
any longer. There is a story behind that, which maybe
I'll share with you. But my husband does play tennis.
He's incredible and he coaches at West Point.
Speaker 2 (02:27):
Oh wow, that's amazing. Yeah, So what was the first
gig right out of pe?
Speaker 3 (02:32):
So, so you know, I was a psychology major, and
I knew that I was fascinated with people and also
a distribution and I'll come on set in a second.
Because I was a music person. I loved music. I
wanted to be in the music industry. So my plan was,
do I go FBI criminal psychology or do I go
into the music industry?
Speaker 2 (02:51):
Very similar?
Speaker 3 (02:51):
Very similar.
Speaker 2 (02:53):
And I'm not being sarcastic because you're profiling people who
perhaps have certain deviant perspectives about the world.
Speaker 3 (03:00):
Yeah, I'll leave it there, okay. And so I had
to make a decision. And so I was going towards
the music industry. And so people always say, well, were
you a performer? Did you sing? Were you classically trained?
The answer is no. But I was fascinated with the
business of music and the distribution of music. And so
at that time, remember it was kind of napster, right,
so like things were going.
Speaker 2 (03:21):
Like late nineties, Is that what you're talking about.
Speaker 3 (03:23):
Oh yeah, so we're going from CDs to digital distribution.
And I just found it to be fascinating and what
did that mean for the business and the implications for artists.
And so I had this dream I was going to
be a big time record label EZAC. I had internships,
I got a job at the time it was Sony BMG,
and then I realized as I got my offer letter
(03:44):
that I wasn't quite sure how I was going to,
you know, sustain my life, pay my bills. My parents
helped massively with college, but there was some student debt
that I had to pay off. And so at the time,
my brother was a financial advisor. So I called him
up and I said, hey, big bro, what do you recommend?
What should I do? And I was thinking he'd give
me some financial advice, and his advice was, get a
real job that's going to help you pay your bills
(04:06):
and then you can go back into music after. And
so that's kind of how I made my way into finance.
Speaker 2 (04:11):
So what was the real job?
Speaker 3 (04:13):
So the real job was working at Mary Lynch.
Speaker 2 (04:15):
So your whole career, you've been in the same more
or less the same place. That's amazing.
Speaker 3 (04:19):
Yeah, and there's this theme as you kind of look
through different things I've done throughout my career. But I
started at Meryl Investment Managers, which was the asset management
arm of Mery Lynch, and I wanted to be the
farthest thing away from markets because I had no experience.
I didn't know what the markets were. I didn't even
know what a mutual fund was and so I joined
(04:40):
Merrill as an analyst in their analyst program and I
was a technology project manager.
Speaker 2 (04:45):
Wait, so as an analyst, did you become a CFA?
Did you go through that process or I did not?
Speaker 3 (04:50):
So you get all of your Series sevens and everything else.
But I was responsible for again let's date ourselves here.
The late nineties, early two thousands. E business was the thing, right, so.
Speaker 2 (05:02):
It's gonna be a big one day.
Speaker 3 (05:03):
It's gonna be big one day. There's this whole thing
called the internet. And so at the time, Meryl did
not even have a website for their financial advisors.
Speaker 2 (05:09):
How is that possible? I know, can you imagine thousand
and one, We're gonna We're gonna wait and see if
this thing.
Speaker 3 (05:16):
Becomes takes off, Right, I have a feeling, right, so
I have a good feeling. Yes, yeah, yeah, So that's
where I started.
Speaker 2 (05:23):
And so did you help build out the first set
of Merrill Lynch websites for their is this for outward
facing for clients internally for advisors and brokers or a
little bit of.
Speaker 3 (05:33):
Everything for advisors and brokers? And so that's where I
first learned, you know, the role of the financial advisor
and what it is to be a financial advisor and
how you serve your clients and how hard it is
and what it is to actually sell and support and
serve those financial advisors. But that was the job. It
was translating technology speak into business and client needs really interesting.
Speaker 2 (05:56):
So I know you've had multiple multiple roles at both
Marylyn Blackrock, Let's quickly walk up the ladder. So from that,
what was the next role?
Speaker 3 (06:06):
So I always had this idea that I wanted to
get closer to the client, so I'd move and you'll
see for my career, I moved into roles that were
closer to clients. So from there I went into marketing,
which you really learned strategic messaging and how to simplify
and help people understand what you're doing. I then went
into our retirement business. We're there. I used to help
participants understand how to enroll in their four O one
(06:28):
K plant. I mean literally going around the country helping
people figure out how to save and how to invest.
And then I moved back into the wealth business, which
is where I am today. Along with leading our retirement business.
And the wealth business was the first time when I
came back into it that I actually had direct client accountability,
and that was important to me because I had done
technology and marketing and product and strategy and everything else,
(06:50):
but I had never been responsible for helping to solve
client problems directly.
Speaker 2 (06:55):
And to clarify, you didn't just kind of move into
the world health business. You are the head of BlackRock's
US wealth advisory business. That is not like just You're
not just casually drifting into that space. You're running it.
So let's talk a little bit about how you got there. So, Maryland,
Blackrock merged in two thousand and six when the dust settled.
(07:19):
What was your title back then?
Speaker 3 (07:21):
So back then I had moved into marketing and I
was the head of marketing for our wealth business. Then
fast forward to Blackrock acquired BGI and I shares.
Speaker 2 (07:31):
I recall one of the greatest acquisitions in finance history.
Speaker 3 (07:35):
And a theme for Blackrock on just structural growth and
how we view where the world is going and how
we meet the needs to be there. But at that point,
leadership had asked me to bring together all of the
retirement businesses that were legacy Blackrock Legacy, I shares Legacy BGI,
and I was part of that team.
Speaker 2 (07:53):
In other words, turn into one company instead of all
these separate pies race. How long did that process take?
Speaker 3 (08:00):
It was, I mean every day. It was another step
in that process. And you know, we learn over the
years how important it is to integrate and to acquire.
When you acquire, you're acquiring for capabilities, but you're acquiring
for talent and culture. And so the match between the
firms is really strong, and that helped us to integrate
even faster.
Speaker 2 (08:16):
So you began this process late two thousand and six
and right around the corner comes to financial crisis. How
did that get in the way or affect this entire
post merger situation. It had to be pretty disruptive, certainly
on the client level. How did it affect what you
(08:37):
were doing?
Speaker 3 (08:37):
Yeah, I mean, of course it was disruptive. And I
think this kind of goes back to part of the
vision with Blackrock always was and I mentioned the term
structural growth, but what does that really mean. It means
durable engines of growth, resilient engine of growth, growth that
can persist market cycles. And so even through a financial crisis,
(08:57):
the fact that we had our I shares ETFE, we
had fixed income, we had equity, we had cash, we
had everything you could imagine, and we had a Laddin.
Remember Aladdin, our technology platform was massively helpful to so
many firms and institutions and governments during that time, So
we had multiple ways to lead through that and help
our clients through that crisis.
Speaker 2 (09:19):
Huh. Really quite fascinating. And back then, you know, it
was a couple of trillion dollars. Now black Rock is
what eleven twelve trillion dollars. That's the largest asset manager
in the world. I want to say Vanguard is probably
ten twenty percent behind. You never knit your heels, But
between Vanguard and Blackrock, these are two of the most
(09:42):
storied firms. And in fact, the new CEO of Vanguard
used to run a division over a great friend of mine, Sting,
which really just goes to tell I recall interviewing him
when he was at Blackrock and like, Hey, that guy's
going to go somewhere one day. But what's fascinating is
just how so unbelievably successful the ieshare business became. But
(10:06):
people tend to think of retail investors tend to think
about Blackrock in terms of I shares, But Blackrock is
really so much more. It's not only passive beta, but
there are alpha seeking strategies and as we'll discuss later,
there are alternatives. So there are a lot of things
going on at Blackrock. As head of US wealth advisory,
(10:27):
What is the core focus? What are the bulls that
you keep in the air all the time.
Speaker 3 (10:31):
Yeah. So one of the things I love about the
wealth business generally is that it is changing so rapidly.
It's dynamic. Every day there is something new. Investor preferences
are changing, there's different client segments, and as you said,
it's not just about I shares. I mean, we have
so many capabilities that we can bring to bear, and
so when we wake up every day, what we think
about at Blackrock is how do we make investing easier?
(10:52):
How do we get more people access to the capital markets?
And that used to be public markets now it's public
and private markets. But that's what we do. And when
you think about our wealth business, we do that through
financial advisors and with wealth management firms. So our job
in our wealth business is to help advisors and the
firms that they work for build better portfolios for their
(11:14):
clients so that they can achieve their dreams. And we
aim to power their growth, to help them scale their
businesses so that they can do what they do best,
which is serving their clients. And so that's what we
wake up doing every single day in the wealth business.
Speaker 2 (11:27):
So I've seen a variety of areas Blackrock model portfolios.
If you have a bond ladder that you have concerns about,
you can run it by the Blackrock folks and hey,
here are your options. We really haven't talked about SMAs,
which I know is a really fast growing part of
the business. Is there a priority or are all these
(11:49):
things just day by day you're just checking off different
boxes and working on different projects.
Speaker 3 (11:54):
Yeah, So our priority is serving the client, meeting their need.
And when we look at the wealth market it and
talk to advisors every single day, there's really three call
and client segments investor segments that advisors are trying to
serve and win and build relationships with, and we're trying
to help the advisor do so. So those three segments,
think about the next gen investor, think about women, and
(12:16):
think about high net worth, and we'll hit on kind
of direct indexing and everything that we do through that.
But if you think about those three segments, and it's
a broadway to think about this. You know, there's exceptions
to every rule here. But next gen what are we
talking about. It's the millennials, right, it's Z and gen Z.
It's forty four percent of the population. So it is
a massive number by quantity, but it's also a massive
(12:39):
number by assets.
Speaker 1 (12:40):
Right.
Speaker 3 (12:40):
That generation is going to inherit seventy jillion plus in
assets over the next few years. And so what's interesting
and what's different about these folks is that they want
to invest in line with their beliefs. They're incredibly tech savvy.
In fact, they trust digital and social more than they
might even trust humans these days. But they want advice advisors,
(13:00):
and they want to invest in things that are new
and interesting. And so you think about bitcoin, right, bitcoin?
Eighty plus percent of millennial millionaires hold crypto. They're more
inclined to use crypto than stocks and mutual funds. So
we were doing and investing and innovating in in service
of client demand, is creating a bitcoin ETF.
Speaker 2 (13:21):
I BIT I bit one of, if not the fastest
growing ETF in history, fastest to a billion to five
billion to ten. I haven't even looked at what it is.
Eighty five unbelievable. This is less than two years old, right, Yes,
that's incredible. Eighty five billion dollars and no passwords, no
loss this, no that that they've taken. What was a
(13:43):
You know, whenever I see the return claims for bitcoin,
I always have to point out, hey, twenty thirty percent
of coins have been lost, last words have been lost,
drives break, so subtract a third off of that. But
really it's it's this or zero if you totally lost it.
You guys have made this a traditional financial product. So
(14:07):
it's pretty amazing, and we've seen like a general acceptance
of hey, everybody should have one percent or maybe a
little more, a little less, whatever your needs are of
some bitcoin, and this seems to be the easiest way
to do it.
Speaker 3 (14:20):
I think we'll see a lot more of that too.
I think we're going to see a lot of firms
coming out now to say we are actually going to
allow advisors to incorporate this into portfolios on the FEEBA side,
on the advisory platforms, and so I think this is
just the beginning, but it's also just a perfect example
of if you understand where clients are going, and you
have the capability set to innovate and build products around it.
(14:40):
Then you can deliver those products to market and help
advisors better serve their clients.
Speaker 2 (14:44):
And I Bit's a perfect example of that, really really
quite fascinating. Coming up, we continue our conversation with Jamie
and Manjera, head of black Rocks US wealth advisory business
and head of black Rocks Retirement Business, discussing wealth management
and retirement. I'm Barry Ritholts. You're listening to Masters and
Business on Bloomberg Radio. I'm Barry Ridults. You're listening to
(15:15):
Masters and Business on Bloomberg Radio. I'm speaking this week
with Jamie Majera. She's head of black Rocks US wealth
advisory business as well as retirement business. So let's talk
a little bit about both of these. I want to
start with the wealth management business. This is more than
just I shares. This is very holistic and comprehensive. Tell
(15:38):
us a little bit about the US wealth advisory business.
Speaker 3 (15:42):
So our business is really focused on helping those advisors
who are really trying to go after multiple client segments
and help those client segments actually meet their goals. And so,
you know, we talked a little bit about next gen
and kind of the millennials and gen Z. The other
segment that is just growing an incredible rate is women.
Women today control a third of the world's assets. In
(16:04):
a few years, it'll be fifty percent. It'll be seventy
percent by twenty fifty seventy percent. And you know, part
of this is, let's talk about what's driving this. Women
are creating wealth right. More women are having careers or
reaching executive levels or starting their own businesses. Women are
also inheriting wealth right from family or from parents. Women
are also inheriting wealth. We call it the horizontal wealth
(16:26):
treadsours right divorce or widowed.
Speaker 2 (16:28):
Tent taut live the husband. Yes, so it's a way
station before it goes to the kids.
Speaker 3 (16:32):
Absolutely, absolutely, and women are quite frankly underserved in this market.
Women were not seen as as a significant growth segment
in the past, and now people are starting to come
around to wait a minute, this is a very important
segment that we need to get right. And women do
things differently, and so advisors need to help women do
things differently, and they need to serve them a little
(16:54):
bit differently. And women, you know, like to have impact.
We talk about the fact that some people invest as
a means to an end. You know, women tend to
invest as a means to what's next, right, they want
to impact their community, they want to impact their family.
They're always thinking about what can I do with this money,
as opposed to I want to make more money, and
so that's it's a nuance, but it's a difference that
(17:16):
really requires a very personal relationship with a financial advisor
and trust.
Speaker 2 (17:21):
You know, it's been fascinating seeing what was previously a
male dominated industry slowly awakened to the idea that hey,
women have money and they're going to continue to accrue
more money. Maybe we should be more open to coming
up with a way to serve that demographic. It's like amazing.
(17:43):
It's taken so many decades for the industry to adjust,
but it's shockingly slow and sometimes stuck a little bit
in the past.
Speaker 3 (17:51):
Yeah, it is.
Speaker 1 (17:52):
You know.
Speaker 3 (17:52):
The wake up call I think for many is when
a financial advisor has a client, maybe it's the man
in the household, and perhaps there's a divorce, or there's
a or the or the client passes away. Listen, seventy
percent of women leave their financial advisor leave their husband's
financial advisor after a divorce or death.
Speaker 2 (18:14):
So obvious with divorce, but with death, it tells you
what a terrible job that advisor did speaking to both
of those. And you know, I've heard stories from advisors
about people kind of agast at somebody ignoring the spouse
in the room. It's just a totally wrong, wrong approach.
How does Blackrock help their advisor clients address this issue?
Speaker 3 (18:39):
So we believe there's such an opportunity for advice here
right there. I mean, there's just this whole world of
women who want advice, they want to coach, they want
a partner, and so what we do is we work
with financial advisors to help them better serve these clients.
We do that through products. So for example, women want
to be able to customize and personalize their investments to
(19:02):
things that are important to them, so we'll talk about
direct indexing. But direct indexing and what we're doing through
a perio is a great way for an advisor to
serve his client and help her have impact with what
she's doing. We also care deeply about educating advisors on
this And to your point, it's not that the industry
just woke up, so nobody was really talking about it,
(19:24):
and so now we're really invested in talking about this
and helping and doing events and getting advisors to bring
their prospects in and we'll join them. We are a
minority investor in a company called Willow which focuses exactly
on this. It builds practice management and education and actually
helps connect female investors to advisors, and so we're really
(19:44):
focused on this, and it's just such an opportunity for
advice but also an opportunity for advisors to grow their business.
Speaker 2 (19:50):
So you mentioned aperio. Let's talk a little bit about
direct indexing. I'm a big fan of it. We happen
to have started on a different product six years ago,
so we've been pretty locked in on that. Why do
you believe it's gaining so much popularity amongst both advisors
and clients.
Speaker 3 (20:08):
Yeah, so direct indexing it still sounds like a new
phrase to many. It's been around for quite some time,
and previously it was really used for ultra ultra high
net worth families and direct indexing and ability to create
a portfolio, a custom index, if you will, of securities
that you can choose and select what securities you want
(20:28):
in that portfolio to align with how you want to
invest and you can also then manage taxes more effectively
in there because you can tax loss harvest. And so
it's a brilliant approach for not only aligning with your
beliefs on how you invest, but also really living in
an after tax world. We need to better look at
tax alfa in our investment portfolio.
Speaker 2 (20:49):
So I'm so glad you said that. When we first
started working with O'Shaughnessy on their product, I was on
the impression that would first be like, the most common
use case would be, Hey, I don't want tobacco or guns,
or I don't want this whatever. I know. The New
York Bishop's Archdiocese Investment Pool uses it to say, hey,
(21:10):
we don't want a board efficients in our portfolio or
anything related to stuff that is in contradiction with our
belief system. I thought that would be the biggest use
And then hey, I work for Apple, so I don't
need all this tech. You could tune down tech in
my portfolio, and then taxes would bring up the rear.
(21:31):
I had it exactly backwards. In the past five six years,
after tax returns, tax alpha seems to be the dominant
usage for this concentrated portfolios low basis cost inherited stock.
Things like that really are a challenge to dealing with
capital gains. Tell us about black Rocks experience.
Speaker 3 (21:52):
With this, Yeah, so we agree completely. In fact, back
in twenty twenty one, we acquired the firm Aparo and
Aperio is a pioneer in direct indexing. A Perio led
the market working with ultra high networth. They called it
the new institutional for the purpose of tax management after
(22:12):
tax returns. And you think about it, we live in
an after tax world. I bought my coffee with after
tax dollars. Yet we manage our investments before taxes. And
so we saw this trend coming and we could have
built it. It would have taken us probably a lot
more time. But we saw what Aperia was doing in
their capabilities and just their approach, and we thought, man,
if we could match that with our distribution reach and
(22:33):
our scale, we could really make some wonderful, wonderful solutions
for our clients. And that's what we did. We acquired
a Perio and we have a very significant direct indexing business.
And to your point, Barry, it is predominantly tax customization,
tax management.
Speaker 2 (22:51):
Right any especially when we see markets or at all
time highs. People are sitting on enormous gains. Sometimes that
becomes very concentrated, to say nothing of people who work
for tech stocks and they've accumulated or other companies that
have just accumulated so much value that hey, maybe I
have too much single stock risk and I want to
(23:12):
diversify into things. Tell us, what else does Blackrock do
with direct indexing? How do you differentiate yourself? For everybody
these days seems to have a direct indexing product? What
makes black Rocks special or unique? Yeah?
Speaker 3 (23:27):
So, you know, one of the things that we did
is when we acquired a Perio, we already had a
very significant separately managed account business. I mean for decades
we had fixed income and active equity, and what we
did not have was that direct indexing capability. When we
brought a Perio into Blackrock, we then pulled it all
together and said, how can we actually make all of
(23:47):
these capabilities together better serve our clients. So that means,
for example, tax loss harvesting on UNI portfolios, right, so
being able to take a capability and not just do
it on equities, but do it on fixed income. Last
year we acquired a company called spider Rock. I'm not sure,
if you're familiar with spider.
Speaker 2 (24:04):
Structured notes, we've used them in the past.
Speaker 3 (24:06):
Yeah, and option over similar kind of.
Speaker 2 (24:09):
Not quite the same, but occasionally similar, a different solution
to a similar problem.
Speaker 3 (24:14):
Yeah. And to your point on concentrated stock, what a
great way to hedge that concentrated stock position. If I
want to continue holding that stock, but I want to
hedge against it and manage the risk, or I want
to manage for tax implications, why not run an option
overlay on top of that. And So the beauty of
what we're doing now is we're bringing all of these
discrete capabilities together into one portfolio, one holistic offering. And
(24:37):
so you'll be able to will be able to work
with advisors and say, let's look across your client's entire
book and let us help you build a whole portfolio
of public markets, private markets, direct indexing, option overlay, all
in one. Really solving for unique needs, customized, really.
Speaker 2 (24:54):
Really quite fascinating. So you mentioned you work with a
lot of different wealth management firms. What is that relationship
look like? What are these firms looking for from Blackrock?
Speaker 3 (25:05):
So I remember when I first started in the wealth business,
years and years and years and years ago, you know,
the relationship between asset managers and wealth management firms was
often a kind of a vendor relationship. Yes, right, it
was you have a product, let's put it over here.
Our position and our partnership with wealth management firms today
(25:26):
is the only word I would say. It's like true partnership, right,
it's aligned interests. We are there to not only provide
them with investment capabilities, by the way, we have incredible
breath to do so, but we're also there to help
them with their technology needs, their operational and scale needs,
their advisory needs. How can we help them think through
(25:46):
how they can grow organic growth? That's everyone's challenge. How
do I grow organically? Well, you have to scale your
business and increase your margins to do so. We help
them think through all of that. And the other thing
that we do is we have incredible people that are
so expert and working with these firms and advisors every
single day to help them achieve their goals. And our
view is if we can help our clients, the wealth
(26:09):
management firms and their advisors grow, will naturally grow with them, right,
So our job is to help them grow.
Speaker 2 (26:14):
So let's talk retirement. We're recording this post Labor Day.
But by the time this comes out, Blackrocks Big Report,
the Read on Retirement will be out tell us some
of the big takeaways for this.
Speaker 3 (26:30):
So it's really special for me personally because I've just
now returned into the retirement business and have the responsibility
for this retirement business. And I say it's a responsibility
and an honor because we think about the thirty five
million people across America that we are helping to save
for retirement, like that is what we do. Over half
(26:51):
of the assets at Blackrock. Not many people know this,
Over half of the assets at Blackrock are helping people
save for retirement in some way.
Speaker 2 (26:57):
Really, Also, when you say that it's for a wis
for three bees.
Speaker 3 (27:01):
IRA's annitionis dB.
Speaker 2 (27:04):
Wow.
Speaker 3 (27:04):
Yes, that's amazing over fifty percent and that's not a
guess tho. Yeah, not many people know that, and so
you know, it's something that we are so proud of
and really for me, it was always my north star.
I remember when I was first in the retirement business
at black Rock, I was able to go home and
tell my parents what I did and explain it to
them in a way that I felt so good about
(27:25):
and they understood, and that's what we get to do
every day. You mentioned the survey, So it's our ten
year anniversary of doing the survey. We've been doing it
for a decade now, and every time we go out,
we go to plan sponsors, who are the employers building
the plans and offering them to their employees. We go
to the savers, who are the employees at massive corporations.
And then we also talked to retirees, people that have
(27:47):
saved and had access to a four to one K plan,
but they're now no longer working and they're in retirement.
And so this year I'll break it down in this way.
Savers those that are still working, the employers of these
are the employees of this company. Savers have the highest
confidence we've ever seen, like off the charts confidence. Now
it's come down a little bit because of market volatility.
(28:08):
And I think what that calls out is, of course
we're all more confident when markets are rising, but very
strong confidence in their ability to retire. However, we've seen
savings come down, and so the question is is that
because of confidence.
Speaker 2 (28:22):
When you say savings, we mean savings.
Speaker 3 (28:23):
Rates rates, right, Savings rates have come down thank you.
And so the question is is that because of confidence
or is that because actually people are spending more money
they need to maybe inflation maybe right, So like we
have to dig into that a little bit more. But importantly,
savers are seeing more confidence or feeling more confident. You
then ask the people in charge, the experts who are
building those plans. Confidence is very low, in fact lower
(28:47):
than we've seen. And I'll come back to that in
a moment, but I think there's a really interesting tension
there of perhaps over confidence in savers and reality in
those building the plans. And then when we move on
to retirees, very low confidence once they've retired and their
ability to actually figure out how to sustain their life
in retirement. And so some of the actions are some
(29:09):
of the insights that really came out of this. One
Savers are looking for access to professionally managed solutions, think
target date funds, right life path portfolios. Black Rock invented
the target date fund thirty years ago, but target date
funds are very very important. Two is, savers are looking
for some type of clarity or solution around guaranteed income.
Give me something that will just tell me what I'm
(29:31):
going to be able to spend every month, and better yet,
make that guaranteed so I know I have it every month.
Speaker 2 (29:37):
So what does that look like? Are we talking an
annuity product or something else?
Speaker 3 (29:41):
So imagine a target date fund with a guaranteed income
sleeve in that. So we have a product called life
Path Paycheck. Life Path Paycheck is among a few other
solutions in the marketplace, but Life Path Paycheck is the
fastest growing guaranteed income solution. What's amazing about this solution, though,
is that it gives employers and employees the choice to
(30:02):
turn on that guaranteed income. So you're investing, investing, investing,
and then you come to a point and you decide
do I want that guaranteed inclip the switch, flip the switch.
Really really interesting. And then the third point is people,
both employers and employees are saying we need to close
the gap on this saving shortfall, and we need to
find more returns and more protections. And so that's really
(30:23):
where you start to point to private markets.
Speaker 2 (30:25):
So the I think of the traditional retirement savings as
classic sixty forty, and what I've been reading about and
hearing about for the past ten plus years is hey
sixty forty isn't going to get it done in the future,
especially with yields as low as they've been up until
twenty twenty two. Anyway, how do you see this side
(30:46):
of the business changing. Is it no longer sixty forty,
is it sixty thirty ten, or what does this look like?
Speaker 3 (30:52):
Yeah, so it's you know, the one thing that's different
about the retirement space is it's versus the wealth space
is retirement is quite slow moving. The market itself is
quite slow moving. And so if you actually look back
twenty years, I would say there's probably less change over
twenty years then we'll expect to see over the next ten.
Meaning people are getting very focused policymakers, employers, asset managers,
(31:14):
record keepers on how do we close the gap between
this retirement saving shortfall? And so to your question, the
sixty forty worked. It works, but actually if you were
to have a fifty to thirty twenty, but strategically and
thoughtfully make sure that that glide path, that target date
fund that also incorporates private markets is doing so in
a way that helps people get more diversification, gain alpha,
(31:40):
possibly gain more income. We've done studies that show you
can get fifteen percent more return on a portfolio with
private markets a target date fund with private markets over
a forty year retirement. And so that's something to talk.
Speaker 2 (31:52):
About, not nothing. That's pretty substantial. Coming up, we continue
our conversation with Jamie Majera, head of Blackrocks US wealth
advisory business as well as head of BlackRock's retirement business,
discussing the rise of alternatives in the investment space at Blackrock.
I'm Bury Ridults. You're listening to Masters in Business on
(32:15):
Bloomberg Radio. I'm Bury Ridults. You're listening to Masters in
Business on Bloomberg Radio. My guest this week is Jamie macgira.
She is the head of black Rocks US wealth advisory
business as well as the head of their retirement business.
(32:37):
The firm manages over twelve trillion dollars. So let's talk
about alternatives. This has been one of the fastest growing
space in investing. Tell us what Blackrock is doing. I
think a black Rock of ey shares and biggest manager
(32:58):
of public equities and in the world, what is Blackrock
doing with alternatives?
Speaker 3 (33:03):
So if you think about the capital markets, public is
only one piece of those capital markets, and for so
long private markets the other part of capital markets have
been utilized for institutions or even the ultra ultra ultra
high at Worth, and so there is a world to
believe strongly an investment thesis that if you're going to
(33:26):
do the best thing for a portfolio, for an investment,
you need full exposure to public and to private markets.
And so Blackrock is doing a lot to help advisors
and their clients have easier access to private markets. So
you may recall last year we had a whirlwind news
announcements around HPS, GIP, pre Quinn, three acquisitions all related
(33:51):
to private markets. Pre Quinn related to data, GIP, infrastructure, HPS, credit,
and private financing. And so we acquired these firms so
that we could offer to our clients not just the
full power of the capital markets through public but now
also through private. And so we're very focused on really
(34:11):
democratizing access, helping everyday people, when appropriate, gain access to
this very important part of the capital markets.
Speaker 2 (34:19):
And I mentioned earlier sixty forty. You peel ten percent
off the sixty and ten percent off the forty, and
you end up with something that looks like fifty thirty twenty.
Is that the future of this because typically we see
a lot of privates. They tend to be locked up
for a long period of time. They tend to be
complex to administer, custodians and reporting and fees. It's like
(34:42):
you buy an eye share, it's easy. You want to
get involved on the private side, it just seems so
much more complex for anyone less than I don't know,
pick a number, twenty million, ten million, and five million.
So what does the future of alternative investment look like
at Blackrock?
Speaker 3 (35:00):
Yeah, so you hit on it, right. I mean, it
was so hard for people to gain access to it.
It was complicated if they were able to get access
to it. And to your point, liquidity was not necessarily
a top priority for various reasons. When you think about
where the market is going now, there's just been so
much change over the wealth industry on how the wealth
(35:20):
industry as a whole is starting to modernize access to
private markets. And so one thing we are doing at
Blackrock is we've focused very much on technology partnerships that
allow and relieve the advisor of all of that operational complexity.
So you think about a firm like I Capital, I Capital.
Speaker 2 (35:40):
Right of which you are on the board of.
Speaker 3 (35:42):
I am on the board. And you know, I Capital
has done so much to actually pave the way for
advisor's ability, wealth management firm's ability to access private markets.
But they are a technology platform. You still need the products.
And to your point on draw down and liquidity, we've
done so much work to build solution that actually are
semi liquid and that provide that liquidity on a regular
(36:05):
basis for advisors and their clients. And so that's something
that has really held advisors back in the past. I
think the last point vary is it's still new to
so many and there's a lot of education that's needed,
and you know, it's education on the asset class and
what does this really mean? And how do I actually
strip the ten percent here and the ten percent there?
(36:25):
And so we've gone a step further to say, how
do we make it even easier for advisors to build portfolios,
Not that I have my private markets over here and
my public markets over there and another account, but instead,
how do I build a portfolio that's one account and
it holds public and private together in one portfolio, that's
professionally managed asset allocation. All of the due diligence has
(36:46):
been done, and so recently, we've engaged in partnerships with
firms like GEOL and I Capital to be able to
bring models to market strategic asset allocated models that are
professionally managed, that incorporate private markets alongside of public markets.
Speaker 2 (37:02):
So the pushback I hear from various people about alternatives.
They're expensive, they're liquid, you have these long lockups. Doing
due diligence is complex and expensive. All of the back
office aspect seem to be like a series of one offs.
There's no real scalability. How are you addressing these issues?
Speaker 3 (37:25):
We have found a way to scale and make it
more convenient. So all of that work that you just
talked about, the due diligence, the operations, the complexity, we
have taken that on. We have built model portfolios that
do all of that for the advisor. The advisor just
has to offer that to their client.
Speaker 2 (37:42):
Is this in an SMA or is this how does
this so? My firm we wear black Rock Vanguard, a
handful of other The bulk of our portfolios, either direct
indexing or mutual funds or ETFs, looks like that. Some
clients say, what do you offer in terms of alternatives?
And we have to click off and run of stuff.
(38:04):
And what I've noticed is once you start working into
the here's the costs, and here's the lockup, and here's
what the reporting looks like, and it's held at a
custodian here, the complexity tends to be like, is this
really worth it? Well, theoretically, it provides diversification, and historically
there have been some cases of outperformance. All that comes
(38:27):
off the advisor's plate and you guys handle all of it.
Speaker 3 (38:29):
So, if an advisor wanted to build a portfolio for
you, you're the client. The advisor could call Blackrock, could say,
I want to build a custom portfolio. I wanted to
have this component of public markets, maybe it's I shares ETFs,
maybe it's direct indexing APERIO. I would like it to
have this component of private markets, perhaps it's Blackrock Credit,
Blackrock Equity on the private side. We will customize that
(38:51):
for them, and then it's waiting for them on a
platform like geowealth, which is a you know, geo wealth well,
a technology platform that will automatically rebalance it for them,
and that advisor can now then invest their clients in
that portfolio.
Speaker 2 (39:04):
How about if a firm comes up to you and says, Hey,
we're pretty good on the stocks and bond side, we
really need help on the alt side. And we have
such embedded long term gains that it's painful to peel
too much off. But going forward, we want to build
this into what we offer and add this to existing clients.
(39:25):
What does that solution look like?
Speaker 3 (39:27):
Call Blackrock. We have a team of you asked about
CFAs earlier. We have a team of CFAs portfolio consultants,
tax economists who do nothing but work with advisors every
day on solving those problems. They will work, they will consult,
they will help them take the portfolio they have. We
want to meet the advisors where they are right, so
(39:47):
we want to help them build on what they have,
and we will work with them to take that portfolio
and transition it into whatever the destination is they're going for.
We'll work with them in a way to do it
tax efficiently and at the appropriate cadence for their client.
Speaker 2 (40:00):
And you guys very successfully took crypto and bitcoin and
put it into an ETF. Are we ever going to
get to a point where alts become an ETF product?
Speaker 3 (40:10):
Look, I think there is a world where so much
can happen right in the next five years. I think
we're going to see a lot of things around private markets.
Part of that is solving for data and having the
transparency around the private markets. What is an ETF, right,
it's transparency into that index. Part of our thought process
in acquiring pre Kanals would be able to offer data
(40:31):
transparency around private markets. But I also think that sometimes
people naturally go to ETF as kind of shorthand for liquidity,
convenient and low cost. And I think there's a lot
of ways that we have to figure out as an
industry and black Rocks working on this right now. How
do you structure and build vehicles that allow for liquidity,
(40:52):
allow for lower cost, and allow for easier access, less
complexity around private markets. Maybe it's an ETF, maybe it's
something else.
Speaker 2 (41:00):
Yeah, liquidity is always the challenge when you have an
investment product that buy design is supposed to play out
over five, seven, eight years. They're not public for a reason.
They need the breadth for whatever that market cycle is
to realize those gains. So I get the challenge, what
are you doing to educate advisors and clients about what
(41:21):
this process looks like.
Speaker 3 (41:23):
I'm glad you asked that because I keep coming back
to liquidity is a challenge when it does not match
an expectation of a client, and so advisors need to
fully understand what they're working with when they delve into
private markets, and in some cases it is a five
to seven year lockup if they're doing drawdowns. In some
cases you do have a liquidity interval every quarter. And
(41:44):
so we are working with advisors all across the industry
to help educate them on the new type of private markets,
the new vehicles, the semi liquid structures, but then more
so we're working with them to help them understand how
do you actually put that in a whole portfolio. Talk
to me about how private markets sits alongside of public
(42:06):
markets and what that does for the risk profile, for
the return profile, and for the liquidity profile.
Speaker 2 (42:13):
And Blackrock launched a model, i want to say, earlier
this year that uses both private and public assets under
one ticker. That sounds like really challenging to put together.
Tell us a little bit about that.
Speaker 3 (42:26):
Yeah, it was challenging, very challenging, and it was something
that we could not do alone for all of the
reasons you mentioned. It took operations and technology platforms like
I Capital. It took operations and rebalancing and trade platforms
like geowealth to be able to allow us to deliver
this portfolio. So this was something that we announced earlier
(42:49):
this year alongside of Geowealth and I Capital, and it
was the first of its kind in the industry. A
model portfolio that in one model, in one account, you
can have of public and private automatic rebalancing customized for
your client, done so easily, so conveniently.
Speaker 2 (43:07):
Some of what you're describing sounds a little bit like
OCIOs that kind of were the rage a few years ago,
outsource CIOs where a professional manager can bring a higher
level of professional wealth management to a smaller shop. Tell us,
is this similar to that or what are the parallels?
Speaker 3 (43:27):
Yeah, it is one of the most accelerated trend we
are seeing in the wealth market right now, which is
this whole notion of outsourcing and whether an advisor is
doing it because they want to professionalize what they're offering
to their client, or whether an advisor is choosing to
outsource because they want to save time and their value
(43:47):
is being with the client and talking about the holistic
wealth plan, not the investment management component of it, and
so they turn to Blackrock to be the outsourced provider,
and so we have a model's business, which is effectively
ocio business. A model's business for the wealth channel is
three hundred and fifty billion today. It's grown rapidly over
(44:07):
the past few years. We think that'll double in the
next few years. And it's because advisors are turning to
us to say, please, let us outsource to you. And
it's not just advisors, wealth managers are doing the same
because again, wealth managers are going to focus on their
core value, which is serving their clients, helping their clients
build financial plans, and helping them navigate their wealth picture holistically.
(44:29):
They turned to black Rock to help them scale their
investment management and that's where our outsourcing capabilities come in.
Speaker 2 (44:35):
So we've talked about wealth management, we've talked about I
shares and as well as alpha pursuit and retirement planning.
My last question for you is what do you think advisors, clients,
investors are not thinking about but perhaps should be. What
important topics It could be an asset, it could be
(44:55):
a geography, it could be a policy or data point.
What do you think is getting over looked but just shouldn't.
Speaker 3 (45:01):
I think taxes is still not being discussed enough. Taxes
as a concept. I mean, there is so much value
you can bring as an advisor to your client by
just having that conversation asking the question. So I would
encourage everyone to do that. That is such a way
to build loyalty, trust and deep in relationship. And by
the way, your client starts to tell you where they
have assets elsewhere. The other area, I would say, is
(45:24):
just really thinking about the future growth drivers of our economy.
So infrastructure AI. We didn't talk about AI, but.
Speaker 4 (45:32):
That the another thing might be big ones exactly, but
you know, you.
Speaker 3 (45:37):
Think about some of these future growth drivers infrastructure as
part of you know why we acquire GIP, but we
have I share solutions that really align with infrastructure as well.
And I just think that's such an under discussed opportunity.
Speaker 2 (45:51):
Really interesting. All Right, I only have you for a
few more minutes, so let's jump to our favorite questions
that we ask all our guests, starting with tell us
about your mint who helped shape your career.
Speaker 3 (46:02):
So this is such a good question and hard question.
I will answer it this way. There are so many
I love to have a board of director's approach, Like,
I have this whole crew of people that I go
to for different things, and I truly like, you know,
you mentioned Salim Ramsey, He's one of them. Martin Small,
Rob Goldstein, Rob Carpedo, Mark Weedman, Like there's so many
(46:23):
Ann Ackerley who used to run the retirement business at
Black Rock, and they've all played a different role in
my career and in my life.
Speaker 2 (46:30):
Huh really really interesting. Let's talk books. What are some
of your favorites? What are you reading right now?
Speaker 3 (46:36):
Lama Lama red pajama.
Speaker 2 (46:39):
To your kids at night?
Speaker 3 (46:40):
Is that what that three year old he loves Lama Lama.
So any Lama Lama you can imagine. But actually I
just finished a great book for the second time. A
more beautiful question, huh, warren Berger. It talks about the
art of inquiry and using inquiry too. I mean, gosh,
the heart of any in event. Why does the world
(47:01):
not have this? What if the world did have this?
How do we get the world to have this? And
so it really talks about the art of inquiry as
a way to better understand, to fuel curiosity, and to
innovate and create better solutions.
Speaker 2 (47:15):
I love that name. I'm gonna check that out. Let's
talk streaming. What are you watching or listening to these days? Netflix? Amazon? Podcasts?
Tell us what's keeping you entertained?
Speaker 3 (47:25):
So I have this this Barbell approach. I go, I
love reality TV below Deck? Do you watch Below Deck?
Speaker 2 (47:32):
No, but I know plenty of people.
Speaker 3 (47:34):
Who do so good. But that's kind of one side
of it. The other side of it is I like intensity. So,
like Mayor of Kingstown, I'm watching Terminal List Dark Wolf
right now. I think that's on Amazon. It is very good, basically, Yes,
Navy Seal turna operative.
Speaker 4 (47:54):
Very interesting, right, yeah, yeah, we just finished Killing Eve.
Oh my wife watched it, loved it and said you
have to watch this, and she rewatched it with me.
If you like that sort of high intensity espionage, really
great cast, really strong recommend So our final two questions,
(48:16):
what sort of advice would you give to a recent
college grad interest in the career in retirement services, wealth
management investing?
Speaker 2 (48:25):
How would you advise them?
Speaker 3 (48:26):
So I go back to my way my entry into
this industry. I didn't know the first thing about anything.
I didn't think I wanted to be in this industry,
but I went in with open eyes and I asked
a lot of questions, and in some ways it was
like because I didn't have the experience, it made it
easier for me to be just like an everyday person
that we were trying to serve. And so I say,
come into this industry. You don't need a traditional background.
(48:48):
In fact, I prefer people not to have a traditional
background of finance or econ. Come into this industry and
help us make it better.
Speaker 2 (48:55):
Love that and our final question, what do you know
about the world of wealth management retirement services? Investing today
would have been useful twenty five years or so ago
when you were first getting started.
Speaker 3 (49:08):
I was really fortunate to have my father tell me
that the first thing I needed to do when I
got a job was start saving in an ira and
in my four one K and even when it hurt
to do, I did it. I wish I had known
back then that I could have been saving in many
different ways. I could have been investing in many different ways.
And so you know, to anyone who is out there
thinking about are they saving enough or investing enough, the
(49:30):
answer is probably know and you should do more. And
there's so many ways to do it. You can use
a financial advisor, you can go direct. You can do
it in many different ways, but just do it. Just start.
That's something I would have done.
Speaker 2 (49:42):
Huh, really really good advice. Thank you Jamie for being
so generous with your time. We have been speaking with
Jamie Majera. She's head of black Rocks US Wealth Advisory
Service as well as head of black Rocks Retirement Business.
If you enjoy this conversation, well, be sure and check
out any of the previous five hundred and fifty we've
(50:04):
done over the past eleven years. You can find those
at iTunes, Spotify, YouTube, Bloomberg, wherever you find your favorite podcast,
And be sure and check out my new book How
Not to Invest The ideas, numbers and behavior that destroys
wealth and how to avoid them How Not to Invest
(50:25):
at your favorite bookstore. I would be remiss if I
did not thank the Crack team that helps put these
conversations together. Meredith Frank is my audio engineer. My producers
are Anna Luke and a Lesis Noriega. Sage Bauman is
the head of podcasts at Bloomberg. Shoran Russo is my researcher.
I'm Barry ert Hants. You've been listening to Masters in
(50:48):
Business on Bloomberg Radio,
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