Serving Millions, One Relationship at a Time

Penny Pennington:
[0:00] The most simple and profound questions. And our company's management system basically got built around that.

Jon Clifton:
[0:10] There's a version of finance that lives on trading floors and ticker screens where the client is an account number and the whole game is beating the market. Edward Jones built the opposite. One advisor, one office, one client at a time in small towns that most of Wall Street drives right past. Penny Pennington leads all of it. More than 9 million clients across the U.S. and Canada, and she got there on a single conviction — that the best financial advice isn't a transaction, it's a relationship. Her top strengths — Intellection, Futuristic, Input, Learner and Belief — tell you exactly why. This is Penny Pennington, and this is Leading with Strengths.

Penny, great to see you. Thank you for being in Washington with us.

Penny Pennington:
[0:56] It's a pleasure, Jon. Thanks for the invitation.

Jon Clifton:
[0:58] You know, so we're here talking about financial fulfillment. And I think one of the biggest issues right now in the country is that we did a study in 1999 where we asked people, do you think young people in this generation are going to be better off than the generation above them? And over 70% said, yeah, I think it will. Today, we replicated that. And then we found that it's plummeted. Only 40% think this generation, the young generation, is going to be better off. In your life, you had that same sentiment, a sentiment you expressed to your parents at a very young age. Can you talk about why you felt that way? And then what did you do where you felt like you broke through and became as successful as you are?

Penny Pennington:
[1:44] So let me go back in time just a little bit and trace a little bit about my family. My parents met in second grade. They grew up together. They've been together, now married, for 66 years. It's just amazing this life partnership that they had. They were two people who really strove and strive today to make a difference in the world. At 14, we moved from a home that I had lived in for all of my memory to a new home. And it was a beautiful new home. And I remember sitting on the family room floor right after we had moved in, and I was looking around and I was thinking, my gosh, I get to live here. And my parents created this. And it just hit me. And I remember saying it to my dad, sitting in the middle of the floor, Daddy, I think I'll be the generation that wasn't able to do this. But I was a little overwhelmed by the sense of gratitude and benefit that my parents were able to provide, that I had seen them striving to provide for my sister and me.

My dad said, Penny, that's not the way this country works, and that's not the way this family works. Your mother and I set goals for ourselves. We feel so blessed to have been able to work as hard as we did to achieve this. But you've been given lots of blessings as well. And therefore, we expect you to use those blessings for the benefit of other people and for you to keep going. I mean, he was basically saying, you go, girl, we're here, we got your back, we're going to give you blessings and benefits, and they did, and my life did. And I recognize that I'm very privileged to use that word in so many ways, but it really just instructed me at that moment in a mentor-like way, that this is what ambition is And I think it kind of all came together for me at that point, that I don't know where my life will go, but I'm gonna keep doing the best that I can do and live up to the potential that I think, I'm a faithful person that I think God put in me. I'm gonna keep doing that. And it doesn't matter what age or station I reach in my life, if my parents are proud of me, then I know I'm on the path that was right for me.

Jon Clifton:
[4:26] So then you went to UVA, then you went to Northwestern, your career started to take off. You went to Comerica, became an executive there. But then there's a moment where you've been quoted where you said you went, if I'm getting the quote right, you went off maybe a professional cliff. Can you talk more, what was the cliff you went off and why? Why did you do that?

Penny Pennington:
[4:49] Well, the cliff looked like a cliff to other people, but it looked like a place of potential soaring for me. And so here's the story. I was a banker for 14 years before coming to Edward Jones. I came to Edward Jones in 1999, and I had a very successful career with great organizations. Something was in me that was restless for making a bigger difference, for being a leader, for making a tangible difference in other people's lives. And there was something about the person-to-person aspect of that that was very important to me. And I just wasn't getting that where I was. I wasn't getting filled up associated with the things I knew I had the potential to do. And so I did take a leap.

I became a financial advisor with Edward Jones. And what does that mean? Well, what I saw that it meant was that it was going to matter if it was me who showed up every day to build a practice by building trust with families in this suburb of Detroit called Livonia, Michigan. That it mattered that my gifts and skills walked through that door every day, my authenticity, my skill and acumen, as a financial professional, and that I was gonna earn the right to serve every single day. It's the hardest thing I've ever done.

It is the thing that made me explore more deeply than anything I've ever done, including almost the job that I'm in today, who I am, what my purpose is, the way that I want to convey to people that I have something that can be of benefit to them, but equally as important that I want to learn from them about how to be better, how to be a better and more trusted professional, how to be a better mom, how to be a better community leader. And I'll share a story with you that really brought it home for me when I was in the first couple of years of my practice.

I was diagnosed with breast cancer at 39 years old. I was a young cancer patient. It was shocking. I'm so young. How can this be happening? And I was two years into my practice, and I realized because of my treatment that I was going to have to let my clients know that I wasn't going to be there for a minute. Now, I was pretty sure I wasn't going to die. However, I'm a new financial advisor, building a practice, meeting families. Who wants a financial advisor that they're worried might not be there next year to continue to serve their families? So I needed to write a letter to all my clients and tell them exactly what was happening. This was a time in the mail services and I was in a kind of town where you put the letter in the mailbox at four o'clock in the afternoon and they were going to get it the next day. Well, that's what I did. I put hundreds of letters in the mailbox at four.

My clients started getting that letter the next day. And I was scared to death when that happened that I would start getting phone calls. Oh, Penny, you've been terrific for us, but we've decided to go work with another financial advisor. Instead, what happened is they started pouring into my office with rosary beads, nutritional books, pink teddy bears, pink flowers, advice about what to do to make sure that I got better really, really fast. What I didn't realize, I knew how much I cared about them. I did not realize that we were building a relationship of mutual love and support. And I say to this day that it is my faith, my family, my doctors and my clients who restored my health as quickly as they did because of the type of relationship that you build in those relationships. That's when I really knew that it wasn't a cliff that I had jumped off. It was a place from which I could soar because I was learning how to be a better professional but also a better human being.

Jon Clifton:
[9:12] When you think about all those conversations you have with all those, your clients, you know, and I don't know if it is your Learner. I don't know if it's your Input. But what were some of the things that helped, the stories that you heard from, the lessons that you learned that helped inform the rest of your career?

Penny Pennington:
[9:28] We call it complexity today. But what that is is families are making decisions about two, three or four generations of their families all at one time in the context of their life stages, the context of jobs that are changing, unexpected things that come into their lives. Share a little bit more about what that felt like in 2000 to 2006 in Detroit. So think about it. Many of my clients were in the auto industry or supplied the auto industry. We were at the time of the dot-com bubble and then the dot-com bust during a period when technology was changing dramatically, right? That whole dot-com thing behind that sat a digital and internet revolution, and valuations of companies were all over the map based on whether they were a dot-com or a not-com.

And so families were making decisions generationally with so much going on in their lives. And it was my job to advise them through all of that, not just the stocks, bonds and mutual funds to buy in their financial plan. It was how to manage all of that in ways that gave people optionality in their lives because we had no crystal ball about the market. We certainly don't have crystal balls about our lives and what's about to happen to us. But my job was to listen to those hopes and fears and then help a family create optionality about them. I had one conversation in particular that I will never forget. A mom said to me, Penny, if I put money in my retirement plan rather than my child's college savings plan, does that make me a bad mother?

Jon Clifton:
[11:26] Wow.

Penny Pennington:
[11:26] This is not a math equation.

Jon Clifton:
[11:28] What do you say back to that?

Penny Pennington:
[11:30] You know, you say things like, well, think forward in your child's life and they're 40, and you're 70, and they have to worry more about you than they're worrying about their child. You help people look into the future and create that kind of optionality, put them in a place where the decisions that they're making today open up possibility for them in the future. And most importantly, let people know that the way they're feeling right now is completely understandable. She's not the only one who asked me that question. She may be one of the first ones who asked me that question, but the psychology of money, one's relationship with money and how that plays out in relationship with family and in your relationship with your financial decisions. All of that comes into play in that relationship.

Jon Clifton:
[12:31] My guess is there are some people that are very responsive to financial advice and that some might not take good advice or they're a tougher client when it comes to how they manage their money. What do you do in those situations? I mean, you guys must have seen it literally thousands of times.

Penny Pennington:
[12:53] Well, you know, one thing that you may be asking is we give sound advice. What if people don't think that's good advice for them and they choose not to take it? There are two ways to answer that. The first is perhaps it wasn't sound advice for them. Perhaps it wasn't tailored to them. The rules of the road in terms of making good investment decisions have everything to do with your tolerance for risk, your time horizon, the goals that you're trying to achieve, and a good financial professional is going to ask you questions about those things to get underneath. For example, if the market falls 20% tomorrow, are you going to put your statement aside and realize that your goals are 20-year goals and you can stomach that? Or are you going to retract and call me and say, sell everything? That's very low risk tolerance. And some people have very low risk tolerance. Poor advice would be, I think you should invest in something that has a 20-year horizon when you need your money to put a down payment on a house in a year. That would be poor advice.

And so what I'm getting at there, Jon, is we have to understand people deeply. We have to understand the time horizon, the length of time they have to achieve their goals. We have to understand their risk tolerance. And this has a lot to do with what is your relationship with money? When was the first time you found out about money? What was going on with your family? Was it a period of great scarcity? Was it a period where you felt great abundance? That has different impacts on people in terms of their risk tolerance and their relationship with money. So one thing that I'm inviting your audience to understand is that getting good advice means having a well-schooled financial advisor who's able to get underneath these questions. That they're going to ask you about your relationship with money.

Now, I had examples of where I would give folks really good advice, and they wouldn't take it, and it was so darn frustrating. I know this is what's right for you. For example, in the period of time that I was operating, remember I was in a suburb of Detroit. Many, many of my clients came out of the autos. They were retiring from, at the time, the big three. That sounds like a long time ago, doesn't it? And they were highly concentrated in the stock of the company for which they worked. But what I had to learn to understand was the emotional connection that people had to the company that they had worked for for 40 years that had enabled them and their families to do so much. And the psychology of it was: I'm disloyal to the company that has given me so much if I reduce the concentration that I have in this investment. I really had to understand. I had to understand the psychology of that and then understand the behavioral science associated with helping a family understand that they were not disloyal at all, but that in fact, their employer needs and wants for them to be whole, hale and hearty in retirement. In fact, it'll be better for that employer and the fact that they were probably paying them a pension and healthcare benefits. So what I'm getting at there is really understanding the humanity and the psychology of folks' relationship with money and the fact that people make very emotional decisions.

Jon Clifton:
[16:44] Can you say more about that? Because it's one of the reasons you and I originally got connected, which is the emotional aspect of money. And you've been advancing a lot of thought leadership of your own on this topic because I think, you know, when people talk about emotions or sentiment, whatever the case is, they go, yeah, maybe that belongs everywhere except when it comes to money, but you're saying that's not the case. Can you just say more on that topic?

Penny Pennington:
[17:10] Well, I would invite your listeners and viewers to just now stop listening to what I have to say and listen to what's going on in your own head about your relationship with money. It's fascinating. We know what to do. We know to invest according to a diversified portfolio, to not trade on emotion. We know to think long-term, to put resources away today in order to have opportunities in the future. We know those things intellectually. Do you have an example of in your own life yesterday doing something that was just the opposite of those two things? Absolutely. Money is a very emotional thing. Health, wealth, spirituality, family, those things are very emotional. And so what happens in that advised relationship is that a financial advisor understands that that is true, that people will make decisions that are counterintuitive, that are counter to what they told the financial advisor they wanted to do. And that it is that emotion showing up. And so we work hard to understand those emotions, and it means when we're thrown a curveball or we want to do something different, we kind of have to come back to that.

Jon Clifton:
[18:39] So you had this kind of, I think, I'm going to put words in your mouth, but I think you said you kind of had this epiphany about financial fulfillment with many of your clients. Because you could see that there was something more than just is their bank account growing. And so you leaned into that with financial fulfillment. And I think customer capitalism, you could argue, maybe the father of it is Peter Drucker. And interestingly enough, maybe it's driven by your Input, your Learner, or something else. But you have a copy of, I think it's actually one of the originals of Management, the 72 title, because I think he has three titles with Management as the title of it.

Penny Pennington:
[19:16] Tasks and responsibilities after that, yes.

Jon Clifton:
[19:19] Why do you keep that book so closely to you? And what is it that you take from that that helps kind of with your leadership even today?

Penny Pennington:
[19:29] I'll ask your grace in going back in time and explaining why Peter Drucker is so important to our company then. In the 1970s, our company was this tiny little inconsequential financial service and investment advice company. We were led by one of my predecessors. His name was John Bachmann. He served as our managing partner for 23 years from 1980 to 2003. He worked alongside Ted Jones. Ted was our founder's son, and Ted is the author of our business model as it exists today. Ted's insight was there were people in small towns and big towns all over middle America, we started in St. Louis, who didn't have access to advice, didn't have access even to learn about stocks, bonds and mutual funds. They had resources, and they needed to know these things and have these tools, but they didn't have advisors. They didn't have anybody in their town to help them.

This understanding of an underserved market, an unaddressed and underserved market, was coming into focus in the 1970s and early 1980s. John Bachmann and Ted Jones read Peter Drucker's original book. They sat together in a conference room. Your family would love this. Your company does this. They sat together in a conference room, and they read chapter by chapter. And they would take each chapter out of the conference room and work to run the company and build the company that way. Now, remember, we were tiny, completely irrelevant in the space. But they had the audacity, these two leaders had the audacity, the ambition, the vision to write Peter Drucker a letter. And John Bachmann said, it took me weeks to write the letter because it had to be very short, but it had to convey to Peter that we were taking his tenets, which were new at the time, and employing them in our company. And John invited Peter to come learn about our company.

Incredibly, Peter Drucker, who was one of the greatest management gurus of all time and this is still true, answered the letter and said, I'd like to know more about your company. Peter then became an informal management consultant to us through the rest of his life. He called himself an insultant to Edward Jones because what he did, he would talk to our management team, and he would simply ask questions. And the questions were derived from his book. Who is your customer? What do they value? What can you uniquely provide? Are you building your capabilities to do that? And what is your plan? Finally, how will you measure if you're succeeding? The most simple and profound questions, and our company's management system basically got built around that.

I don't want to offend anyone, but it is our management Bible about how we deeply and profoundly seek to understand the business that we're in, the client that we serve, what they value. And what they value has never been all about the money. We don't see our clients as a walking wallet. We look at them, we know them as families, as relationships, as unique human beings with unique desires and fears. And the value that we provide is the advice that we could give to them to help them achieve those goals. I say advice is our business, trust is our currency and financial fulfillment is the outcome that we are seeking.

Jon Clifton:
[23:14] You know, one of his most famous pieces of work, Peter Drucker, is managing oneself. And in managing oneself, you know, he talks about how he went through his own process of really introspection. And, you know, and many have kind of arrived at this, there are academic studies on it, that introspection is hard. And I think he comes to the conclusion in that paper that you need a feedback mechanism. Of course, that's one of the purposes of the Gallup Organization is we built a feedback mechanism, which you did. And you learned your top five strengths. When you first did that, what was your reaction the first time that you saw five words that described you?

Penny Pennington:
[23:56] Yeah. So the first one that I did was in 2008, and I've just refreshed this. And so I look back at my 2008. You know, you have those moments where you say, how do you know? You don't know me, but you know me. How did you see me in this categorization of what my strengths were? The second thing that I felt was, now that I've seen myself, what do I do with that? So I'll go back to an earlier part of the conversation, this restlessness that I have to live up to my potential. God put it in me. God's the one who's saying, Penny, look closely. You've got some gifts and skills. Make sure that they are used to their fullest. And you're going to kid yourself. You're going to delude yourself from time to time about whether you're using them adequately, whether they're showing up for other people in ways that are helpful, whether they meet your own purpose and help the organizations that you're part of.

Years later, I was with a leader who just, unlike me, who it takes me a long time to say anything. This leader was so pithy. He had 30 minutes to give a presentation about leadership. And he got up in front of the room and he said, here's leadership. Get better, help others, and get better at helping others get better. And then he sat down. That was it. And I love that ethos. Get better first. It doesn't mean that I'm not enough or I'll never be enough, but it means I got to start with me. It's that Learner's mentality. It's the desire to look deeply, to reflect, as you said, because without that, there are blind spots or I'll miss something. I'll miss an opportunity. So get better. That's on me. Help others because that's what my getting better is all about. It's in service to others. The nobility of helping others then achieve their potential is what the third part is about. Get better at helping others get better.

So the strengths gave me a window into what are the particular ways that I can do that? It also gave me a window into the fact that other people are different, that they have different gifts and skills. And then now I'll fast forward a little bit to 2026. 18 years later, I just redid my strengths. Three of my current top five were in my top five in 2008. There are two things that weren't even in the top 10 that are now in the top five. And so what that says to me is, wow, we evolve and more. Our fundamental who we are might not change that much. In fact, I don't believe that it does. But our life experiences, our successes, our failures, what we gain confidence in doing, that can change. One of the things that was number 16 for me in 2008 that is now in my top five is Futuristic. As I've learned and as I've grown, as I've grown teams and helped others think about strategy, I've grown my own confidence, but also my own vision about what the future can look like. And so now, seven years into this particular role, Futuristic pops out there as something that is now a part of me, where it wasn't necessarily such a part of me 18 years ago.

Jon Clifton:
[27:50] What was the other one that changed? You said there were two.

Penny Pennington:
[27:52] Belief, interestingly. Belief. As I read you all describe what Belief is, the way that I read it, it's the marriage of have a big vision, but interrogate it. Can you do it? How are you going to get there? What is the responsibility and accountability? What are the steps? What are the sequences? Peter Drucker's questions, how are you going to know? That's how I read Belief. There were actually some things in the Belief statements. It's like, that's not me. It's like, oh, yeah. Yeah, there was a little bit of a dark side to Belief that I thought, well, yes, I do show up with that sometimes. It was a certain kind of skepticism or pessimism about what that future can be.

I regularly say, I think skepticism is just fine. It is the healthy delay of absolute judgment that something is possible or not possible. So actually, I like being across the table from skeptics. And this is really important when you're leading the future of a company or the future of a family. If you're taking a big swing, if you've got big ambition, if you want to do really important things, probably it hasn't been done before or there's not a playbook for it. And you may be writing the first playbook for this thing. So for us as a company focused on financial fulfillment for tens of millions of families across North America, we're building that playbook. Nobody has done that before and ready to measure themselves on it. And so I need healthy skepticism around the table as we think about what is financial fulfillment? What's the algorithm to help people get there? What kind of professionals do we need to be? What sort of capabilities do we have to build in our company and in what sequence? The skepticism associated with that belief, the deep belief in it is great, but hope without a plan is just an idle dream.

Jon Clifton:
[30:14] I think a lot of people know you for your drive. And, you know, there's even a sticker on your iPad that talks about stay hungry. You even talked about it here, about just how driven you are. And then when somebody sees your strengths profile, you're dominated with Strategic Thinking themes. And I think traditionally, we would say or stereotypically, that a driven one might be Achiever, somebody that just loves to work as hard as they can, as long as they can. You present yourself into that way, but it's being driven by something else. What is that that's driving that?

Penny Pennington:
[30:51] The restlessness to make the world a better place. Going back to that 14-year-old girl in my parents' den saying, how do I live up to my potential? And the people that I love the most saying, you can do this, but you have to use your gifts and skills to do it. We got your back, and you're going to have a lot of support in doing it, but this is what we expect. And what I've realized is that when one surrounds yourself with others, not necessarily with the same group of strengths, but the similar motivation that it's about others, it's about being in service, it's about making the world a better place. All of those strengths come together to achieve what the motivation is driving us to do. And that's what is unleashing what their motivation is, unleashing from the wellspring of their motivation, all of their strengths. And so if I laid out, I have 10 members of my enterprise leadership team, if we laid out all of their strengths on the table and looked at the bars, it would be all over the map, which is just exactly the way it ought to be. For us to have the ambition that we have to serve the way that we want to serve and take the swings that we are. Thank goodness my team is made up of all of those different strengths.

Jon Clifton:
[32:29] What's next? You've got Futuristic. You've thought deeply about that. What's next look like for you?

Penny Pennington:
[32:38] Well, if you're talking about for me as a leader, that is part and parcel for me leading the incredible company that I lead. And what's next over the next three years is to ensure that our capabilities, our organization, is set up to ensure that we can be a partner to tens of millions of families across North America, to help them improve their financial fulfillment. And so ensuring that our company is evolving to do that just as we've evolved for 104 years to be even more meaningful to our clients, and this is the Peter Drucker question. In the context in which you operate today, the world as you're living in today, who is your customer, what do they value, and how are you building your capabilities to do that? So what's next then is that.

What's next for me as a leader is to keep scratching that itch about restlessness. Be more, do more, help more, learn more. And today, in today's context, it is about learning. I have a new two-year-old granddaughter, and somebody said to me the other day, if you're 63, and I'm almost there, if you're 63, you're actual digital second — I mean, think about it. I'm 62. I combine human and technology all day every day. I'm digital second. If you're 43, more likely you're digital first. If you're 3 and my granddaughter is 2, you're AI native. This is the way your world works. And so I can't let myself say, oh, I don't understand it. It's OK. Let the youngins get it. No way, because I want to be able to live in Quinn's world, be part of her world, learn from her, which means I got to keep learning.

Jon Clifton:
[34:43] You use the word visionary a few times. And I think being a visionary probably comes most natural to people with Futuristic because people with Futuristic live in the future. But actually, you've said to people you don't feel like you're a visionary. And you have a different sort of concept or a way of thinking about it. Can you say more about what that is?

Penny Pennington:
[35:05] Yeah. We learned something a number of years ago, actually, as we were working on a three-year strategy. Consider how to be an ambassador from the future, not to the future, not standing in today's shoes and looking out there. But go out there, like imagine being there, and you know what an ambassador does. An ambassador goes from their country to another country and says let me tell you what it's like here so that, again, we can discern the steps that it would take in order to get to that future that we've already painted. Fundamentally, it simply comes from the deep belief that our country, civilization, people's lives are moving up and to the right for the most part, or can, and that we have a small part to play in doing that. So we need to do our part.

Jon Clifton:
[36:07] You mentioned your granddaughter, and right now she's growing up in an interesting world, one that hopefully she doesn't inherit, which is one of the indicators that we track is whether or not somebody cares about you at work. And it spiked right in 2020, and now it's come back down. And ultimately, many workplaces that are just fundamentally broken. And now it's getting a little bit more uncertain with AI about what will work look like. What do you hope to leave behind as a legacy when it comes to work so that she gets into a workplace, a work environment where you feel like she's thriving?

Penny Pennington:
[36:43] It's not only her work. It is also her entire life for which work is really important. I mean, I think about the blessing that you and I have to do work every day that we know deeply is making a difference in the world. That we love and that we get to work with people that we not only enjoy, but we're thriving because we're shoulder to shoulder with them. We're learning from them and their strengths. My deep belief is that human beings will carve out a place for other human beings in the things that matter most. And I think those things are health, wealth, family, spirituality and their job. And that people want their job to be meaningful. They want it to make a difference in the world.

It's like that story, Jon, you and I have both probably told it, and we live it every day. You know, the passerby asking the stonecutter building a cathedral, what are you doing? And one stonecutter says, I'm cutting stone and it's damn hard. And another stonecutter says, I'm building a cathedral that will last for generations to come. Part of it is about perspective and tasks and skills and all of those things. But part of it has to do with the nobility of the work and the perspective on it. I have found in my work life that the leaders that I was mentored by and supported by and learned from the most were those who put that kind of thing in perspective, and then help me understand how to use my gifts and skills to make a difference in the world. And so I seek to do that for those that I lead, that I work alongside today. And I know the work that you do in helping people unearth their strengths is in service to creating workplaces and work lives that are noble. So thank you for doing that.

Jon Clifton:
[38:54] Penny, thank you for being here today. Thanks for being a great partner of ours, and thanks for all you do for the country and the world.

Penny Pennington:
[39:00] Right back at you. Thank you, Jon.

Transcript autogenerated using AI.