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The BID

Money talks, stress walks

This week featuring BlackRock's Chief Marketing Officer, Frank Cooper

Money is ranked the #1 source of stress in people’s lives, higher than physical health, work or family. But while we’re often willing to talk about the rest of these stressors, money is surrounded by taboo. How can we turn this concept into something approachable and part of cultural conversation?

The key: Making wealth a part of our overall picture of well-being. On this episode of The Bid, Chief Marketing Officer Frank Cooper discusses why starting the conversation and taking small steps around our wealth can have benefits not just for the future, but also for our well-being today.

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    Mary-Catherine Lader: Fun fact: jogging used to be considered strange. In the 1960s, jogging wasn’t correlated to health at all, nor was it commonplace behavior. But then Nike made the connection. They turned something that was feared and doubted, into something that is part of the overall picture of our well-being. Today, you can’t walk on the streets of any city, or really anywhere, without passing by someone who is on a run. Decades later, the rise of gyms, countless types of classes and athleisure wear, has made fitness something for everyone, and frankly, part of a lifestyle.

    Those changes – Nike’s push to make jogging normal, the rise of gyms, the classes, the athleisure – they were driven by marketing. They were driven by companies that had a product that they thought could make peoples’ lives better.

    Forty-nine percent of individuals globally rate money as the top stressor in their lives; that’s more stress than physical health, work, or family. What’s most surprising? Fifty-seven percent of those people aren’t investing at all. So what’s stressing them out, and what can they do about it?

    On this episode of The Bid, we’ll talk to BlackRock’s Chief Marketing Officer Frank Cooper. His career spanned Pepsi, BuzzFeed, Def Jam, and today, financial services. We’ll talk about why money should be part of our overall picture of well-being and how we can tackle making investing approachable, one small step at a time.

    Frank, thank you so much for joining us today.

    Frank Cooper: So happy to be here.

    Mary-Catherine Lader: Your background before you came to BlackRock was in consumer and entertainment, and well before that, in law. Now that you’ve been here and you’ve been diving into this question of what gets more people investing around the world, what have you learned?

    Frank Cooper: Let me explain my background, because it seems like a chasm between where I’ve been and where I am today, right, so consumer goods and technology, and entertainment, and now financial services. But there is a common denominator to all of it. In marketing, what we’re trying to do is make change happen; we’re trying to change peoples’ perception and we’re trying to change their behaviors. And that’s what I’ve done my entire career, you can do that in food and beverage, you can do that in entertainment, you can do that in technology, just applying that same discipline now here in financial services. And I feel like there is no better time than now to actually be in financial services, because we’re at a moment in time where people are starting to awaken to the fact that their relationship with their money is important to their overall sense of well-being.

    Mary-Catherine Lader: And what’s been the catalyst for that change, why now?

    Frank Cooper: If you look at just what is happening in culture, with institutions, it all has come together in a way that I think has led people to this place. Mindfulness overall has increased; people are much more conscious about what actually makes me happy. And much more demanding about that. And we saw it happen in food, right, where people said, I need to understand how nutrition actually gives me greater energy and improves my sense of well-being. We saw it happen in physical exercise. And if you’ve ever been to SoulCycle—I’ve never been to these places, by the way—but if you’ve been to SoulCycle or Flywheel or Barry’s Bootcamp, I know the names –

    Mary-Catherine Lader: I’m a big Barry’s fan, have to say, really big Barry’s fan, twice a week.

    Frank Cooper: I hear incredible things happen in there.

    Mary-Catherine Lader: They do, it’s amazing.

    Frank Cooper: But people come out and they feel this greater sense of energy, but a heightened sense of well-being. And so now that’s the expectation that people have, that I want things that actually contribute to my overall sense of well-being. If it doesn’t, it’s actually put into another category, it’s put into the category of the mundane or a commodity and they’re not going to pay a premium for it; they’re not going to pay attention to it. What I believe is that we’ve artificially separated our relationship with money from our sense of well-being. And now we have that chance to bridge the gap. There’s this deep sense that money actually contributes or can prevent you from achieving a certain level of well-being but no one has really unpacked that. Because there’s taboo around talking about money, there’s a lack of clarity about what it means to earn your money and spend it, and save it, and borrow it, and give it, and invest it. There are all these barriers, cultural, social, familial, that actually prevent people from exploring that relationship and understanding and how money contributes to their overall sense of well-being.

    Mary-Catherine Lader: That resonates with probably most people. But from where you sit, what can you do about it? We don’t touch consumers, we’re an investment firm, we’re an asset management firm, we don’t have a consumer brand. So much of what you mentioned feels deeply personal and about human behavior, so what levers do you have where you are to help drive that change? We’re an input in the outcome, but how can we be a driver?

    Frank Cooper: The way I think about any business in any industry is I start with a deep obsession about the customer, the end customer. Everything flows from that end customer. Think about when I worked at Pepsi Co., people often think of Pepsi Co. as a consumer brand only. But we don’t go direct to consumers, we never did. But they see a Super Bowl commercial with Beyoncé or a World Cup promotion with Messi, and it feels like it’s a consumer brand, but what Pepsi did was they sold to retailers, an intermediary, that had the direct contact with the shopper. But if we didn’t actually have the obsession with that end consumer, what makes them tick, what brands do they love, what enhances their sense of value, how do they perceive value in a product, then you could never actually provide value to the retailor. Same thing in financial services. Yes, we serve intermediaries, institutions, financial advisors, but ultimately, all of us are serving an end investor, we’re serving a person at the end of the chain. And I like to work back from that. And if you can understand that person better, not only can you serve them better, but you can serve the intermediary better. So, I spend almost all of my time being obsessed with the end customer and working back from there.

    Mary-Catherine Lader: That end customer, as you say, cares more about the things in their life contributing to their sense of well-being: where today does money and investing stack up? It sounds like you think there is a lot of room for improvement.

    Frank Cooper: Well, first I’ll say money is definitely not a panacea; money is not the answer. I’m not here saying that you will find happiness if you could only achieve a certain level of money. In fact, I think that is the wrong way to think about it. The thought is, people need to reconcile their life goals with money. And I think the challenge for us as a society, and for individuals within our society, is to reconcile that across the full dimension of money. How do you earn your money? And people are talking about that all the time and we’re starting to crack the code of that. People are now demanding, I want something as I earn my money and have my job, I want something that is fulfilling to me, that actually meets my own personal sense of purpose, my own sense of values. And Larry’s letter to CEOs, both this year and the year before, which speaks to this idea of purpose, in part is driven by employees who are increasingly demanding that the companies for which they work actually serve some higher purpose and that meets their own personal sense of purpose. But it’s also how people save their money and how they give it. It’s easier to see it in how you spend it, because that’s the most visible thing. If I spent some money and suddenly I have—I don’t buy this—but you have a Gucci belt or Gucci purse, or whatever it might be, like okay, I have this item, it’s visible, I can enjoy it, other people can enjoy it, it says something about me. When you save, you don’t see it, so that becomes a more difficult thing for people to grasp. When you invest, oftentimes, people don’t see it. And so the opportunity I see now though is that as we look at technology, and its ability to actually give people signals back from the things that were previously invisible—so if you save and there is something that happens on your mobile phone that indicates that you’ve saved and gives you a signal that, wow, isn’t this a great thing. That’s our opportunity now to start to send those signals in ways that enhance peoples’ sense of accomplishment and to nudge them toward the behaviors that we think would improve their relationship with money.

    Mary-Catherine Lader: And so investing you would put in that category of positive signals to get people to invest? And the reason I ask is because so much research shows that actually the best investor outcome for the average consumer is to think very little about their investments, and to just save, put it aside and not think about it. So is what you’re suggesting just a more dynamic relationship with what’s happening, even if it’s not an active set of choices that people are making?

    Frank Cooper: I’m suggesting that, but I’m also suggesting that there is—we found this in our own Global Investor Pulse, there’s a large percentage of the population across the globe, that just believe investing is not for them. It’s too complicated, I don’t have enough money, this is for a small, elite group of people, it’s not for me. And so the best way to actually transition from that belief is partly knowledge, but knowledge we found is not in and of itself an effective tool. You can do financial literacy all day, and the percentage of people who actually shift their behavior is pretty small. And it’s really almost the Nike mantra, just do it. We found that people who actually just invest something—it’s not about the amount—invest something, that behavior in itself creates momentum, creates a sense of confidence, creates trust. And that is the behavior that kind of reinforces itself and allows them to become investors. The last thing is this, some people may never even perceive themselves as investors. The image of an investor, and the role models that they’ve seen in advertisements are far away from how many people perceive themselves.

    Mary-Catherine Lader: Right.

    Frank Cooper: But that’s okay, as long as they’re doing the behaviors that we believe investors should, right. So are they actually contributing in a consistent way? Are they thinking long term? Do they believe in the growth of the equity market, are they balancing it in a way that meets their expectations, are they developing a realistic retirement fund for themselves? To me, those are the behaviors that we want. They can call themselves savers, investors, earners, believers, whatever they want to call themselves.

    Mary-Catherine Lader: Right.

    Frank Cooper: But those are the behaviors that we want to instigate.

    Mary-Catherine Lader: A phase that you’ve used internally at BlackRock and in a lot of your public appearances, is the importance of bringing well-being through wealth to more and more people. “Wealth” is a really controversial term, particularly in that more broad/mainstream context, so how and why did you choose that? Not only was your background as a lawyer and then your particular attention to language – that must have been a very deliberate choice. So how do you think about what wealth means today and what power you think it has to mean something different in the future?

    Frank Cooper: Yeah. I really wanted to reinforce this idea that wealth is not just for the wealthy. And so part of what I wanted to do was make a distinction between being wealthy, which often times is perceived as a destination, which changes. And so when people say, when I just cross this threshold of net worth or investments, at that point, I’m wealthy. And then I can have some sense of relief. That goal keeps moving, number one, but even if it didn’t, even if it remained static, it excludes way too many people. And what I saw in coming into this industry, is that wealth, this idea of your relationship with money, is really rooted more in a set of behaviors than it is in a particular destination. Are you saving, are you spending in ways that are conscious, are you conscious about what you’re earning and what you’re giving, are you investing? And I wanted to use that term precisely because it was provocative. We could soften it and say, it’s peoples’ relationship with money and how that actually contributes to their well-being. But I think because that phrase is softer, it’s easier for people to gloss over it. I want people to pause. But here is the interesting thing, the people who pause the most, the people who cringe the most, are people in the industry. Because partly it’s a term of art in the industry, and when they say “wealth management”, they mean people who have investible assets over a certain amount. Cringe. They hear “wealth”, they think isn’t that alluding to the elitism and the inequality that may exist, and that term feels so loaded. You go outside into general culture, you get less of a sting. In fact, what you find is that the average person is unafraid of the term wealth, they just think it’s inaccessible. And so for me, I saw it as an opportunity to define it for what it is, wealth means a set of behaviors which allows you to move forward, no matter where you stand. And so I love the term, it’s proactive, it starts conversations. Being wealthy is different from acquiring more wealth.

    Mary-Catherine Lader: We’ve been talking about a lot of big themes, big consumer insights and a few big picture ways that can change the way people feel about money and investing. We do this Global Investor Pulse once a year, this year’s results show that people still feel a ton of stress when it comes to their personal finances. What actions would you hope to see in 2019, such that 2020’s results might be a little different?

    Frank Cooper: One action I’d love to see is to demystify the language of financial services. Can we speak in a language, and in a way, that is intuitive to people? And so I think having that more intuitive short form, easy to understand language is one step forward; two, I’d love to make money part of the cultural conversation. It’s been taboo, people don’t want to talk about it, but increasingly we’re seeing parts of the population talk about it. One of my jobs before had a really young population of employees, really young. I think the average age was 24.

    Mary-Catherine Lader: This was BuzzFeed?

    Frank Cooper: Yeah. This was BuzzFeed. And what I noticed is they were very open in talking about money, very open. They shared salary information with each other, they talked about money and renting in a way that I had not seen for other generations. And so I am encouraged by this idea that money can become part of the cultural conversation. The third thing is I think in our advertising, we need more relatable role models. What we know about this whole idea of self-efficacy, of people advancing, whether it’s in sports, or money, or anything actually, seeing relatable role models actually makes you feel like, I can do it. So suddenly this notion that investing is not for me is diminished significantly, because I see someone who is like me actually doing it. And the last piece is this, is technology. Are there ways in which people can start to advance through small steps, mostly through technology, by leveraging the knowledge and expertise that we have, but doing it in a way that makes it easy and comfortable for them? Small steps are meaningful steps.

    Mary-Catherine Lader: Demystifying financial services is an important step, but there are also persistent concerns about whether the public trusts financial services and trusts our industry in the wake of the financial crisis, even though it was ten years ago. We’re now looking at a crisis of trusted technology. How important do you think trust in institutions is in driving some of that change? The reason I ask is all the things you mentioned could be driven outside financial services actually, right? You can have some of those role models, you can change the conversation through popular culture, and not as much have the existing financial services institutions lead the way. So my question is, where do you think we are in terms of public trust of financial services, and how important is that in driving these changes?

    Frank Cooper: Yeah. Well, first this whole decline of trust in institutions is a broad theme that’s been happening for at least the past 30 years, arguably the past 40 years. And it’s been consistent. Look at any poll, you can look at the Edelman Trust Barometer, you can look at the Gallup Polls, they’re all saying the same thing that there is a declining trust in institutions. It’s accelerated recently, but it’s accelerated on a global scale because we’ve seen the Panama Papers, we’ve seen the Tesco meat scandal, we’ve seen the Global Financial Crisis. If you look at where trust sits today, it sits on platforms that allow people like us ordinary people to be the checkers of truth, right. So you’ll sit on a platform like an Uber, or an AirBnB, and you’re effectively saying, I actually trust this stranger more than I trust an institution because I believe that the stranger has less motivation to do me wrong. And that’s what we’re seeing over and over and over. Meanwhile, the institutions that we’ve seen over the years, people believe that their motivations have not been aligned with the customer, not have been aligned with society at large. And you get to financial services, it gets even more acute. Financial services tends to be at the bottom of the trust surveys along with journalism. And it’s in part I think because there’s the truth that the financial services industry, particularly asset management and investment management, have been perceived as serving a small percentage of the population. And that perception is hard to overcome, in part because there’s a segment of the industry that absolutely does that. But there are other segments of the industry that serve that ordinary person, we just don’t talk about it much. The fact that we have at, BlackRock, two-thirds of our assets under management related to retirement, retirement for teachers and nurses and fire fighters, and policemen. But we don’t really talk about that and people don’t perceive it that way, they look at a narrow slice of what we do. And I think the industry has done it to itself. And I think we have an opportunity now to be a lot more transparent about the full range of what we do. I think there is a lot of good in what we do, but we need to share it, but we also need to be honest about the areas in which we could do better. And so for us, what I’m excited about, is that we now stand in the place where we have this opportunity to help more people, that this idea of financial inclusion can be a reality, that our expertise can help people beyond just our clients. And I think it stems from really the reason why we exist as a firm, is to do that, is to help more and more people build their worth, both financially and sense of self-worth.

    Mary-Catherine Lader: I want to end with a rapid fire round, but I’m going to ask one personal question before I do that.

    Frank Cooper: That’s scary.

    Mary-Catherine Lader: Especially when it’s about money.

    Frank Cooper: Yeah.

    Mary-Catherine Lader: Is there a moment you can think of, a decision you made, a realization, good or bad incident that changed your relationship with money?

    Frank Cooper: So when I came out of law school, I clerked for a judge. And what I learned is, I got out of law school, first week before I was going to go in to start working for the judge, I loaned a friend a significant amount of money, which never got paid back.

    Mary-Catherine Lader: How long had you known this friend?

    Frank Cooper: For a long time, all my life.

    Mary-Catherine Lader: Okay.

    Frank Cooper: Twenty some odd years. And then when I went into work, I realized that my paycheck was going to come a month later, because of the way the pay cycle worked. And for me, that was a hard lesson because at that point, I was committed to the idea that I never wanted to be in a position where I had not thought through personal cash flow and savings and how I actually manage my own money against all the things I want to do. So after that point, I was much less impulsive, much more thoughtful about how I handled money. The interesting thing is it didn’t make me, I hope, more stingy, it just made me more thoughtful about how all these things relate together.

    Mary-Catherine Lader: And do you find that as you learn about financial services, about investing, your own behavior has changed?

    Frank Cooper: I’m more conscious of how money works and how investments work, yeah. It’s changed my behavior; it’s also changed even how I discuss money with other people, family members, for example. At first, I would say I was talking about it in more technical terms, because I was picking up the jargon here.

    Mary-Catherine Lader: Right.

    Frank Cooper: But now I have actually gotten to a point where I can actually translate that in ways that are easier for family members or friends to understand. And so, I don’t go around every night preaching, what are you doing with your money, how’s your wealth?

    Mary-Catherine Lader: You’d have fewer friends.

    Frank Cooper: But I found that I can actually be more helpful with people who are close to me in explaining how they might actually take a step forward to have greater financial stability.

    Mary-Catherine Lader: I want to end with a rapid fire round. As we’ve mentioned, your background goes well beyond the world of BlackRock and investing, from Harvard Law School to Def Jam, to Pepsi, BuzzFeed. So I’m going to ask you a series of this or that questions, ready?

    Frank Cooper: Okay. Let’s go.

    Mary-Catherine Lader: Kanye or Drake?

    Frank Cooper: Kanye or Drake, that’s a tough one, but I have to go Kanye—I have a deep bias because I’ve worked with Kanye and worked extensively with Kanye, and I have not worked as closely with Drake. But even if that were not true, I’m still going to be a Kanye person on that front. Because I feel like he’s actually changed music in a much more fundamental way, bringing in samples from jazz, using voice in a way that actually had never been used before. If you listen to a Kanye song, he’s layering voices and different types of voices throughout the song. But also, opening the way for people like Chance the Rapper and Kendrick Lamar, by making the lyrical content of rap a little bit more thoughtful and more expansive beyond just money and cars.

    Mary-Catherine Lader: I love that you say you haven’t worked with Drake as much, as opposed to not at all. So another one, now that you’re not on their payroll anymore, Coke or Pepsi?

    Frank Cooper: It’s definitely Pepsi.

    Mary-Catherine Lader: Come on.

    Frank Cooper: It’s no question—you guys don’t remember the Pepsi Challenge? Just do a blind taste test, and you’ll find out which one is better.

    Mary-Catherine Lader: BuzzFeed Tasty or the Try Guys?

    Frank Cooper: That’s an easy one, Tasty all the way. I’m not even a foodie and I certainly don’t cook, but I’m mesmerized by a Tasty video. It’s like 45 seconds to one minute from a first-person point of view in a hyper lapsed video, and you see it from the first ingredient to the final product. It’s just something about that that’s almost like meditative in a way. And so Tasty, all the way. And I love the Try Guys, but Tasty.

    Mary-Catherine Lader: Okay. Frank, thank you for sharing your insights with us today, it’s been a pleasure having you.

    Frank Cooper: Thanks for having me. Appreciate it.

    Mary-Catherine Lader: Interested in seeing more of the numbers behind our Global Investor Pulse? Visit BlackRock.com/InvestorPulse to learn more about the largest ever study conducted on wealth and well-being.