An Interview with Carrie Schwab-Pomerantz

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Carrie Schwab-Pomerantz

8th November 2016

Carrie Schwab-Pomerantz is an expert in financial literacy, and has served on President Obama’s Advisory Council on Financial Capability, where she was Chair of the Partnerships Committee, as well as President Bush’s Advisory Council on Financial Literacy. She is Board Chair and President of the Charles Schwab Foundation, which provides financial support to a variety of charities and community events selected by Schwab employees. In addition, she is Senior Vice President for Community Services at Charles Schwab.

Q: Should investors be concerned about this election?
A: There’s no doubt that this has been one of the most contentious elections in American history, at least in our modern history. I do think from an investor perspective that you should always be aware of what’s happening in the world, and obviously this election is a big deal. But for a long term investor, which most of us are and should be, how the election turns out should not affect our strategy. We know that markets go up and down, and they ride all sorts of historical events. Certainly in the United States, we’ve withstood many different kinds of leaders of different political alignments, and the stock market in the country itself still continues to grow. I believe that this election is not any different.

Q: How well do you think brokers have adapted to the rise of the internet?
A: I think it has been a total evolution, and Schwab, throughout history, has been a very technology-dependant company; it has definitely been the backbone to our success. I think that’s been the case for many different financial institutions. Utilizing technology to better serve clients has always been in Schwab’s DNA. Technology and access to the internet has helped more Americans gain access to the markets and investing. That’s a good thing, because in my view, investing is key to building long- term wealth.
Probably when you talk about technology or the internet, you’re also thinking about robo-advisors, which is the latest advancement in utilizing technology to create portfolios for investors. I think there’s always this question of ‘will it replace financial advisors?’ We believe absolutely not. It will just augment and support humans’ work. People, especially when it comes to their money, will always need human interaction. I do think that brokers will evolve with the advancement of technology, for instance, despite robo-advisors, individuals will always need help with planning and keeping their clients focused on their goals, and monitoring their progress, and course correcting.

Q: What are the main financial literacy challenges that people face?
A: What I’ve found with my work, focusing on this for over thirty years, is that the lack of financial literacy in the United States cuts across Americans from all walks of life. It is blind to socioeconomic status, gender, and age. I think it is because the issue is driven by many different factors, including the fact that in the United States, very few schools teach young people the basics of money management.
With the rise of technology, we have more options and more innovation around financial products, which while being a good thing, also creates a sort of analysis paralysis, and keeps people from moving forward because they’re overwhelmed. Some of the most obvious challenges for people are being able to make ends meet, getting into debt, and not saving enough, which in combination are a disaster. Also, saving for retirement in the United States: not only are we required to save for our own retirement, we have to invest our savings and, as I mentioned, not many Americans really know how to invest. Saving and investing is how you get the growth that you have to have in order to build the cushion you’ll need for retirement. Quite frankly, for many Americans, it doesn’t necessarily have to be that way with these problems. Certainly, there are Americans for whom it is very tough, and they need assistance, but there are still those who can avoid it.

Q: What are some of your favourite programs from the Charles Schwab Foundation, and what do they entail?
A: I would say that there are a couple of programs I’m pretty proud of. The first is our national partnership with the Boys and Girls Club of America, which is the largest youth agency in the United States, serving four million kids in four thousand clubs. Twelve years ago, we co-built a financial education program for teenagers called Money Matters: Make It Count. It’s a pretty robust program: five modules, talking about needs versus wants, how to save, and budget, and manage debt. There are also some basics around entrepreneurship. We supplement it with games, and we have college scholarships for those teens who really embody the Money Matters concept and the values of the Boys and Girls Club. We’ve had over 800,000 teens go through the program. We’ve evaluated it three times over last twelve years, and every time it shows that not only are we increasing the knowledge of teens, but we’re also helping to change their behaviours around savings and budgeting.
The other set of programs that I’m proud of is our employee volunteerism at Schwab. We’ve got a very strong offering for our employees to get involved in the community. One of the two flagship volunteer programs is the Schwab Volunteer Week, during which about one third of our employees go out and volunteer for about half a day together in all sorts of different capacities, from teaching financial education to cleaning parks, painting, helping folks prepare their resumes, giving preparation for job interviews, and resume building. So there are all sorts of volunteerism there.
The other flagship program is the Schwab Pro Bono Challenge, and that’s where we bring about three hundred fifty employees together into small groups in order to help a non-profit with a specific challenge. So, a non-profit might have a marketing challenge, or a technology challenge, or a human resources challenge that they need to think through and strategize. And so we’ll bring folks with those different skill sets to help them think it through and create plans. We’ll have HR folks go help with the HR program, or technology folks help with the tech program. We save the non-profits a lot of money with this sort of free consulting. The majority of non-profits implement the actual strategies that we help them with, and they feel that it really helps them to become stronger.

Q: What do you think companies have to do in order to achieve gender boardroom equality?
A: I think that’s a really tough question. I think it has to start beyond the boardroom, with supporting women in executive leadership roles at the company level. Studies show that there is a real drop off in the mid-career period for women, which is when they’re forced to think about the choice between career and home. I’m not sure that corporate America really provides the support system and training and encouragement to move and advance to the next level. I think that the more women we can get at the top of the corporation, the more we’ll start seeing even more women at the corporate board level.

Q: Which books would you recommend to someone my age?
A: I like books about personal finance, and I would love for anybody your age to learn the basics of money management. I would highly recommend any young person to take a look at our Schwab MoneyWise.com website, which was created for all novice investors. It is helpful, not only for young people, but also for people who have expertise. I am a big believer in learning the basics of saving and budgeting and living within your means, and the basics of investing for your future.
In terms of a more personal perspective, I’ll share a couple books that I have read. They’re both historical nonfiction. I think that they’re inspiring and they both create a level of empathy for others. One of them is Team of Rivals, and it is written by Doris Kearns Goodwin. It’s a book about Abraham Lincoln. That book has really struck me in a lot of ways as a leader. The word they use to describe Lincoln in the book is magnanimous, and that’s somebody who puts his ego aside for the betterment of others. Abraham Lincoln, when he became President, brought all his rivals into his cabinet. Initially, they didn’t have a lot of respect for him, but over time, they grew such a close friendship and respect for one another that they created a very strong team to guide the country through the Civil War. It made me think about how we can all put our egos aside, and work with others who have skill sets we don’t have, to achieve something bigger.
The second book might be more relevant to the UK with the whole Brexit issue. It’s called Hillbilly Elegy by J. D. Vance. It’s about a young man, he’s only thirty-one, and he is a Yale educated lawyer, but he grew up as a hillbilly. His mother was a drug addict, so he was raised by his grandparents, who married at ages thirteen and seventeen. He grew up with Appalachian values and it gives you a real glimpse into the sociology of these people who are the backbone of America, in terms of blue collar factory workers, and how modernisation and technology has ripped up the American dream. It helps you reach a better understanding of what’s going on in the world at the moment with disenfranchised people.

Q: What life lessons have you learnt over the course of your distinguished career?
A: I think for me, I learned some important life lessons later in life and wished I had learned them earlier in my career. I think young people need to have a bigger vision for themselves, and aim high. When I say have a vision for yourself, literally visualize where you hope to be. I’m a big believer that when you start thinking big and start seeing yourself in this capacity, you start to take the steps to get there. There may be some twists and turns, and maybe some changes, but it creates some building blocks for you, and it also creates a level of excitement and drive to go for it.
The other is networking, and it sounds so simple. What I mean is building relationships or reaching out to people who can be potential mentors, or people you admire, or people who could be partners of some sort with you down the line. I think that the power of building relationships as a leader is how you get things done. I would say most of my work and achievements have not been through formal managerial structures, they have been based more on influencing people and bringing them along. The way you do that is to build close trusting working relationships, within your organization and outside.

Q: What did you learn in your teenage years which you think has influenced your success?
A: I come from a family that has run into some hard times. My father was a struggling businessman, and my parents divorced when I was young. I was just working hard and plugging away. I’ve been working since I was thirteen, starting with the paper route. I tried to do a little housecleaning, but that didn’t work out so well. I always had summer jobs, and I had a sense of accomplishment from paying my dues. I think paying your dues pays off in the long run. I didn’t see it at the time, but I believe that it is how you gain respect from others and your colleagues.

Q: Is there anything you wish you had done which you didn’t do when you were my age?
A: Well, getting as many experiences as possible when I was your age. Also, meeting more people: I wish I had reached out to more people that I admired or thought could be good advisors to me. I was very shy, and I didn’t see why anybody would want to spend time helping me. One regret, perhaps more as an adult than a sixteen year old, is not starting my own company. I’m not sure what it would be, but I wish I had started my own organization.

Q: Who is the most interesting person you’ve met, and why?
A: I’m thinking about that, and I’m not sure who I could say. Certainly, I’ve been fortunate in my role to meet lots of interesting people: I’ve met politicians, and philanthropists, and CEOs. I’ve met young women in Kenya living in the bush. I saw how they overcame unfortunate circumstances to get an education as girls in Kenya. Rather than picking just one person, I would say that I admire people who have drive and grit, and don’t let anyone get in the way of their North star. I would say that my twenty year old daughter is that way, she’s very driven, and she’s very focused. Now that I think about it, as I mentioned to you, there are those Kenyan girls that I met. I met one girl in particular, Rebecca, who lived in a tribe in Kenya with a lot of tribal warfare. She had a lot of relatives killed, and she was slashed as well with a machete. She found herself in a school that she’d otherwise never get to go to, and by working very hard, she is now going to college. Her hope is to go back to her community and become a doctor and have a medical centre in her hometown, thinking about all the people that were killed and hurt in the tribal warfare with no hospitals or medical care nearby.

An Interview with Ambassador Anthony Gardner

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Ambassador Gardner

2nd November 2016

Anthony Gardner became the United States Ambassador to the European Union in early 2014. One of his main objectives in this position is to negotiate the Transatlantic Trade and Investment Partnership, a proposed trade agreement between the European Union and the United States. In 1994 and 1995, he was Director for European Affairs on the National Security Council, and before becoming Ambassador was managing director at private equity firm Palamon Capital Partners.

Q: Do you think that Brexit is the beginning of the end of the European Union?
A: No, not at all. I’m often asked that question. Clearly, Brexit poses a challenge, not only for the European Union, but also for the United States across the gamut of issues on which we deal with the EU. The list is long: it includes data privacy issues, digital single market issues, sanctions, trade, and many others. We spoke out before the referendum. The results of the referendum, however, need to be respected, and we will obviously respect the decisions that were expressed in a democratic process. However, we do have interests at stake, and we won’t be shy in expressing our views, given that these interests are significant, including in the economic field. Many of our businesses are following this with keen interest, especially given rising concerns about a hard Brexit, meaning a disorderly process by which the United Kingdom could eventually find itself without privileged access to the single market. However, despite these concerns, we still think that the European Union is an important partner of the United States, and will remain so. We intend to continue working closely with the European Union post-Brexit to ensure that we can make progress on all the issues that I mentioned, and others

Q: What are your views on the Transatlantic Trade and Investment Partnership?
A: This is an important deal, not only for economic reasons, but equally for political and even geostrategic reasons. Many critics are saying that this deal is on life support, but that is not true. We have made important progress in negotiations. We’re not where we thought we would be after three years of talks, but we’re hopeful that discussions will continue into the next administration, and they should, because the economic and political benefits are substantial. It would be a real shame if the United States and the EU, the world’s two largest trading blocs – that share the same values and high standards when it comes to environmental issues, health protections, and consumer protections – are unable to come to an agreement that would set the standard for 21st century trade.

Q: How easy have you found it to negotiate with the EU? How do you think the UK will fare when it does so?
A: These negotiations were never going to be easy or fast for the following reasons: trade negotiations are never fast or simple, the US and the EU are the world’s largest trading blocs and very sophisticated partners, and there are many difficult issues at stake, including the agricultural sector, government procurement, data flows, and maritime services, just to cite a few examples. We are just three years into our transatlantic negotiation, so it’s still ‘early days’.
The UK has expressed an interest in coming to some sort of a free trade agreement with the EU, but these negotiations can only start once it has left the European Union. The process of exiting the EU will take time, possibly even more than the two years after the Article 50 withdrawal notice has been sent. And once the UK is out, an agreement is not going to be a simple thing to negotiate, partly because the deal will have to be approved, not only by the European Parliament, but also by 38 national and regional parliaments. So the idea that this will be an easy deal to negotiate and ratify is unfortunately incorrect.

Q: In your opinion, is there anti-American sentiment in the EU?
A: Many ask me that question. I have not felt it in general, certainly not from the EU institutions. I don’t believe it’s the case either in the competition field, including in the state aid investigations into a number of US companies. That’s not to say that we don’t have significant concerns: we do have concerns, particularly in the case of the Apple investigation, and we have expressed them in the form of a paper published by the US Treasury. We do not comment on competition cases as a matter of policy, for the simple reason that these are legal cases. In the case of the Apple investigation, however, we felt that a number of specific US government concerns were at stake, so we took the unusual step of publishing that paper.
More generally, in a number of member states, we are concerned at some anti-Americanism that has manifested itself as a particular focus about US technology companies. But one should be very careful about generalising this anti-Americanism. There are parts of several member states’ governments that we feel are excessively focusing on the United States, when they should be focusing on more general principles, or other countries. So the short answer is, no, I don’t see anti-Americanism in the EU, or generally speaking across Europe.

Q: How could a Clinton or Trump victory next week impact on the relationship between the US and the EU?
A: As you can imagine, first and foremost, as the US government official, I need to be non-partisan. Secondly, it’s really hard to predict the outcome of the election and the impact this would have. If Hillary Clinton were to win, I feel confident that there would mostly be a continuation of the policies of the current administration with regard to Europe, including the European Union. There may be some changes, for example, policy on Russia, but with regard to the European Union, I think we would continue to build on the good progress we have made over the last 8 years. For example, we’ve made significant progress with our relationship data privacy issues, which went through a troubled patch post-Edward Snowden’s revelations, and we’ve made good progress in our cooperation over digital issues. We’ve cooperated extremely tightly on climate change negotiations, on the negotiations to curb Iran’s nuclear ambitions, also on sanctions on Iran and, more recently, on Russia after its illegal annexation of Crimea. So we’ve had very tight cooperation with the EU and I expect that would continue under a Hillary Clinton administration. If she doesn’t win, it’s really impossible for me to speculate as to what the impact would be.

Q: Which books would you recommend to someone my age?
A: Well, let me recommend a couple of books I’ve just read that had an impact on me, and I think are relevant for someone of your age because they touch on really critical issues that we’re going to be facing over the next couple years.
The first book is called Rise of the Robots by Martin Ford. It’s about how automation in the workplace is going to have an absolutely fundamental impact, not just on blue-collar workers, but increasingly, on white-collar workers, and on society as a whole.
The second book deals with crucial issues and it’s also a very uplifting book. I think we need uplifting books because there’s so much pessimism about the future. It’s called The Fix by Jonathan Tepperman, and it’s about how certain countries have successfully addressed big challenges. The examples are very varied. It discusses Botswana, which has dealt with its diamond industry successfully – they managed to harness that industry without squandering it. It talks about Mexico, and its successful economic reforms. It also talks about Singapore, a country that had very few natural resources, but managed to become a giant in financial services. I really like the book because it reminds us that with good management and good policies and government, we can fix many of the problems we’re facing.

Q: What life lessons have you learnt over the course of your distinguished career?
A: That’s a tough one. There are a few, and this may sound a bit strange coming from me, a diplomat, former lawyer, and businessman. The first is don’t underestimate the power of passion. We can’t let just the extremists have passion, because if we do, we’re in trouble. The moderates, the people who care about facts and about making progress in the world, also need to be passionate in defence of their vision. We don’t often learn that at school, because we learn from books. I can tell you from my defence of this trade agreement all over Europe, that when pure facts meet pure passion, passion normally wins. We need to be fact based, but we also need to be passionate.
The second lesson is believe in what you do. It’s related to the first point. Many of us have very challenging careers. If you don’t believe in what you do, it’s difficult to put up with the rigor of the workplace and the work day.
The third is that keeping an appropriate work/life balance is critical for the longer term. If you don’t feel satisfied in your personal life, it becomes very difficult to be successful professionally.

Q: What did you learn in your teenage years which you think has influenced your success?
A: Well, I think that’s an easier question for me. I grew up in an international family. My mother was Italian, I lived abroad when I was young, and that formed me fundamentally from an early age. I knew then that an international career was something I wanted. I learnt that understanding foreign cultures and speaking foreign languages was important to having an open mind, and it was culturally enriching. So I would say all those things had a fundamental impact on my future career.

Q: Is there anything that you wish you had done which you didn’t do when you were my age?
A: That’s an interesting question. There were things that I wish I had done more of, formative experiences that were a bit outside the box. For example, I went to Poland in 1983. It was a very unusual time, because Poland was under martial law. My parents sought to dissuade me from going to study at the Jagiellonian University of Krakow. But I decided to do it because I wanted to be in a special place at a special time, and not just doing a typical summer job. Well, I can tell you that experience was something that will live with me forever, because I met some extraordinary people. I ended up meeting Lech Wałęsa, who was under house arrest, in his home in Gdansk. I interviewed him for the Harvard International Review, and I had a terrific time.
I also studied at the Leningrad State University for a summer program in 1982. This was early days, before Gorbachev. Again, it was an odd thing to do, but the experience stayed with me for the rest of my life.
I would urge any young person to consider doing things that are unusual, that challenge you and open your horizons, because I think as you get older, it can only be positive to look back at those experiences, and say you did something at a time when you were young and able to benefit. And I think that one’s mental flexibility is a skill for the future.

Q: Who is the most interesting person you’ve met and why?
A: Well, there are three people. Firstly, Bill Clinton. I worked with Bill Clinton in the White House in 1994 and 1995. He is a very unusual person; unusual in the breadth and depth of his knowledge, and his ability to interact with people from many different walks of life. He’s extremely intelligent, with an ability to absorb information rapidly. I witnessed this on many occasions, including when we travelled together and I had to brief him. He’s a truly skilled politician, who I think will go down in history. I should note that I had the opportunity to work with Hillary Clinton, who also impressed me with the depth of her knowledge and ability to absorb information quickly.
The second person is Jeffery Immelt of General Electric. I worked with him at GE for a number of years. He struck me, not only because of his breadth of knowledge, but also because of his international outlook, which I thought was unusual for a CEO.
The third person is our current President, Barack Obama, with whom I’ve worked now for years – I supported him from an early stage. Initially, many people thought I was naïve, and that he would never win. But I thought Obama was extraordinary from the outset, for some of the same reasons that I mentioned with respect to Bill Clinton. Also, Obama is a very cool, rational analyst of every situation. I’ve never heard him say something that was not thoroughly thought through. I’ve never seen him lose his cool, even in tough situations. And again, I think he will go down in history as a great President.