Allow your child some accountability and allow them to make mistakes”, with Jason Hartman & Leah Bennett

Allow your child some accountability and allow them to make mistakes. What I see more and more is that people want to save their kids, even young adult kids, from making mistakes. As an example, I used this comparison when I was talking with an analyst: as an analyst, you’re going to miss something with […]

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Allow your child some accountability and allow them to make mistakes. What I see more and more is that people want to save their kids, even young adult kids, from making mistakes. As an example, I used this comparison when I was talking with an analyst: as an analyst, you’re going to miss something with your analysis, but you don’t criticize yourself for making a mistake. Instead, you ask yourself how you can learn from your mistake. It’s a great way to learn, but we don’t do that as much as with college kids.

As a part of my series about strong female finance leaders, I had the pleasure of interviewing Leah Bennett. Ms. Bennett was appointed President of Westwood Wealth Management, Houston in March 2018. Prior to joining Westwood in 2016, Ms. Bennett was Co-Chief Investment Officer at South Texas Money Management, where she shared responsibility for overseeing the investment strategies of the firm. Prior to that, she was a Managing Director and Chief Investment Officer at King Investment Advisors, Inc. and a Research Analyst for Capital Research & Management. In June of 2017, Ms. Bennett was elected to the CFA Global Board of Governors, where she serves on the Audit and Risk Committee. She is a former President and Director of CFA Society Houston and is a Co-Founder of the CFA Women in Investment Management initiative and the CFA Institute Global Research Challenge of the Southwest. She currently serves on the Board of Directors for the Girl Scouts of San Jacinto Council, on the Wright Fund Oversight Board at Rice University and on the Advisory Council of Executives (ACEs) at the Bill Greehey School of Business at St. Mary’s University. Ms. Bennett earned her Bachelor of Science in economics from Texas A&M University.

Thank you so much for doing this with us, Leah! Can you tell us the “backstory” about what brought you to the Banking/Finance field?

When I was in college, I was very interested in law school because I’m an analytical person and driven by logic. However, in my sophomore year, my father made me create a budget for my entire year. I had to be realistic: I got to keep any money left over, but if I ran out, I would have had to get a job. Because of this budget, I invested in my first money market and learned about the power of compounding interest. I started buying mutual funds and educating myself about investing in general. By the time I graduated, I was interested in investing as a career, and after college I became a fixed-income specialist for Capital Group. Like many people of my generation, I didn’t plan on going into this industry — I happened into it.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

I was at the same firm for 17 years. It was a smaller firm, and eventually I outgrew it and was recruited to another firm. But this new firm ended up not being a good fit. I struggled with that quite a bit. I kept thinking that I had made a mistake.

Now I know it wasn’t a mistake. There are many things you can learn from situations that don’t work, and what I learned from three years in a difficult environment is worth a lot. In this case, I found out what a bad environment felt like. Although I didn’t think of it at the time, it was a fantastic experience.

Being able to learn from any situation has made me a great fit for Westwood. My main takeaway from this story is that instead of focusing on my errors, I need to focus on what I am learning.

Are you working on any exciting new projects now? How do you think that will help people?

For the past few years, I’ve been working on a really exciting project: CFA Women in Investment Management Initiative.

About 10 years ago, I was on a panel on women in the investment industry, and I spoke with Marg Franklin, who is now the CEO of the CFA Institute. After that, we decided we would help each other throughout our careers, like doing mock interviews together. Our friendship brought us to talking about where all the women were in our industry. In the investment industry, only 4% of women serve as president or CEO, and, at that time, women charter holders were 18%.

We both decided we wanted to get more women into the industry, and we wanted to talk about the business case for diversity. A Credit Suisse survey in 2014 showed that more than 10% of a senior management team were women and more than 15% of a board was women, the company received better returns with less risk. That’s the centerpiece of our mission: making the business case for diversity.

In 2014, I co-founded the CFA Women in Investment Management Initiative with Marg. The goal is bringing more women into the industry and ensuring employers fully appreciate the benefits that come from diversity.

One of the things we’ve accomplished so far is changing how the CFA has approached its events. At conferences, the goal is for women to be at least 30% of speakers. For the CFA Research Challenge, we aim to have at least one judge for each team to be female, and we want women to make up at least 30% of the board.

What do you think makes your company stand out? Can you share a story?

One of the reasons I was attracted to Westwood is that we’re strategic and collaborative. Susan Byrne founded the firm in 1983, when it was unusual for a woman to start an investment firm. Since she was a basketball fan, she founded it based on John Wooden’s values of collaboration and team success. A lot of asset management firms are ego-driven, but at Westwood, we give out team awards, and instead of hanging up pictures of individuals, we hang pictures of teams.

In our Houston office, I’ve emphasized the importance of team collaboration by hiring people from different backgrounds. We’ve got JDs, CFAs and CFPs in our office. This allows us to approach problems differently from how many others do, and, in our Houston office, new business is up 100%.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Wall Street and Finance used to be an “all white boys club”. This has changed a lot recently. In your opinion, what caused this change?

I think the change has been due to greater awareness around statistics as it relates to why diversity is important from a business standpoint.

Rather than talking about business from a fairness perspective, I think a better way is around business case studies, especially because people in this industry are so interested in finding more alpha. When you can put numbers around it, the case for diversity becomes palpable.

Of course, despite the progress, we still have a lot more work to do to achieve parity. According to this report in CNBC, less than 17 percent of senior positions in investment banks are held by women. In your opinion or experience, what 3 things can be done by a)individuals b)companies and/or c) society to support this movement going forward?

One of the biggest things individuals can do is investigate their hidden biases. There’s a lot of data that show women in their late 40s and early 50s don’t get promotions and exit our industry. I don’t think this is because of intentional discrimination, I think it’s because it’s hard to hire someone who thinks differently from you.

As for companies, I really like what some companies have implemented: making sure that at least one woman is present in the room during hiring interviews and hiring decisions.

For societies, I think classes and seminars that explore hidden biases and make the business case for diversity would be helpful.

Let’s now turn to a slightly new topic. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers? If you had the power to make a change, what 3 things would you recommend to improve these numbers?

One big thing would be financial literacy classes in all schools. I teach financial literacy for the girl scouts. Some high schools give basic financial instructions, but there’s nothing robust and mandatory in most schools. I think financial literacy classes would make a big difference.

I think a great way for individuals to improve their financial literacy is through budget exercises — as I said before, I learned a lot from the exercise with my dad in college. I like budget exercises because when you’re young, you’re sensitive to losses, so it’s a big opportunity to learn from your mistakes and develop a sense of accountability.

Another thing that can improve these numbers is that, as a firm, when we talk to families behind business, we tell them how to teach their kids about money, especially as it relates to investing, losses and risks.

You are a “finance insider”. If you had to advise your adult child about 5 non intuitive things one should do to become more financially literate, what would you say? Can you please give a story or example for each.

  1. Allow your child some accountability and allow them to make mistakes. What I see more and more is that people want to save their kids, even young adult kids, from making mistakes. As an example, I used this comparison when I was talking with an analyst: as an analyst, you’re going to miss something with your analysis, but you don’t criticize yourself for making a mistake. Instead, you ask yourself how you can learn from your mistake. It’s a great way to learn, but we don’t do that as much as with college kids.
  2. Do budget exercises. At my firm, we do a lot of financial planning, and clients spend, on average, 20% more than they think they do. This is especially true in a time when you can do impulse buying on your phone or on Amazon. People don’t reconcile their bank statements anymore. The biggest gap between what people think they spend and what they actually spend is on dining out. But there are also great opportunities to do financial planning and budget exercises with technology.
  3. Here’s a piece of advice I give to college students: Always be comfortable being the weakest person in the room. This is something I didn’t learn until my mid-30s, and it relates to learning in general. If young adults can learn about being around people much stronger than they are, they can become stronger as well. An important factor in this is thinking about the right questions to ask. For over 20 years, I was the only female on my investment team, and often I was not only the only female, but I was also the youngest person.
  4. Ask questions — this relates to anything to do with the financial industry. Financial professionals speak in a language most people don’t understand, so if we can encourage young adults to speak up when they need something clarified, that will be very helpful for them throughout their life.
  5. Be humble — when I meet college students who go into interviews, I often see that they either have extreme fear or are exceptionally cocky. You need to be humble and embrace your mistakes.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

One of my biggest mentors was the prior owner of a firm where I once worked. His name was Roger King, and he made sure that we had a very collegial environment at the firm, where I learned the power of making mistakes, and that making mistakes is not necessarily a bad thing. I also learned that when you want to build a good team, always hire someone who’s stronger than you are.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

It’s super easy: “Be humble.” It’s a quote that applies all throughout life. Especially in the investment industry — you make the most mistakes when you think you know all the answers. You have to be humble, and always want to be humble.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

I think it would be to start a movement to inspire people to be more inclusive with the way they think, and also constructing teams that can be more inclusive. The financial industry is sometimes not trusted because of greed egos. Thankfully, we don’t have that at Westwood, and I think if the rest of the industry wants to improve its reputation, it will need to create a more inclusive mission for itself. For example, at the CFA Global Board, we’ve updated our mission statement to say that we’re working for the benefit of society.

Thank you for all of these great insights!

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