Karin Kimbrough, head of investment strategy for Merrill Lynch Wealth Management, joined Bank of America in 2014 after working for the Federal Reserve and for Morgan Stanley. The economist, who earned her Ph.D. from Oxford, says her background in research and analysis affords her a broad perspective on the work advisors do and what their clients need.
How did you begin your career in wealth management?
I joined the Office of the CIO two years ago, coming from nearly a decade at the Federal Reserve Bank of New York. It really came up as an opportunity that a mentor suggested to me in the course of discussions about expanding my horizons beyond central banking.
The wealth-management industry sits at the fulcrum of a massive demographic wave and offers a chance to harness the power and direction of financial markets to support people in achieving their goals. The aspect of helping people mixed with markets and macro is what really drew me to this industry and particularly to working with our Chief Investment Officer, Chris Hyzy.
What have you learned from your supervisors?
I have had the amazing luck to work for brilliant thinkers. Each one has taught me an invaluable lesson you can’t get in graduate school.
My first boss, who is still a thought leader in the financial-services industry, shaped my analytical approach. He taught me the beauty of clear thinking and simplicity. We always start with a framework and keep it simple.
Too many people weave a complex tapestry of words and jargon that sounds great but no one else fully understands. What’s the point of that? This boss taught me that if you can’t articulate an idea, you don’t really have it fully fleshed out. As a result, I have a preference for plain speaking, clear, jargon-free explanations. I start simple and add complexity if needed.
Another boss taught me the importance of loyalty to your network. By that I mean you have obligations to your colleagues to support them and share the credit and glory of the wins as well as the regrets and lessons of the losses. You have obligations to your clients as well.
This is where Merrill really stands out to me. The firm’s focus on delivering to clients, communicating, being accessible and responsive is second to none in my opinion. Maintain your internal and external network, and you’ll find opportunity and support.
What have the broker-dealers you have worked for taught you that has most influenced your career?
When I finished graduate school, London was blossoming, and I gained a position as a junior economist at Morgan Stanley. I turned down several opportunities in Washington because the lure of financial markets was so strong.
The job was amazing, and humbling. I sat with foreign exchange traders that were all at once tough, smart and very unassuming. Many of them could process an amazing amount of information, from macroeconomic data to geopolitical news and translate it into a view in the currency markets.
From that experience on the trading desk, I learned a range of essential professional skills — including the knack of the quick response, when to trust a quantitative model and when to trust your gut, and — most importantly — how to wake up at 4:30 a.m., five days a week.
But the most important lesson I learned from that role was that you have to have a view and own it, whether it turned out right or wrong — no waffling allowed.
What is the most significant change you have seen at your firm?
Eighteen months ago, we combined the Merrill Lynch and U.S. Trust Chief Investment Office to better align them with the goals-based wealth management platform that we’ve created for our financial advisors and clients. At the same time, we built an end-to-end investment process that brings the benefits of institutional quality research to our private clients through their relationships with financial advisors.
The combined CIO team now includes economists, portfolio managers, investment strategists and fund analysts who deliver timely thought leadership, a broader range of portfolio solutions and careful due diligence to our solution set. Financial advisors can now deliver a consistent, robust client experience focused on achieving client goals and backed by the support of a CIO team that incorporates the best thinking of our organization with a wide range of solutions built through solid and thoughtful due diligence.
We have become the only CIO organization on Wall Street to connect every component of the investment process — research, asset allocation, due diligence, portfolio construction and oversight — on a common platform.
What is the biggest challenge facing your today, and what is its response?
The challenge lies in bringing the full capabilities of our organization to the client in the way that works best for them.
We recognized early that we can’t look at the markets in isolation from the personal financial goals of our clients. We developed a goals-based wealth-management platform that puts the clients’ priorities at the center and brings the firm’s resources to the clients through either an advisor or an online platform.
Our goals-based wealth-management platform underlies all of our offerings, including Merrill Lynch, Merrill Edge and Merrill Lynch Guided Investing, which will launch in January. Merrill Lynch Guided Investing allows investors to pursue their financial goals through an online investing experience enhanced with professional portfolio management from the CIO team.
We’ve created more tools, more due diligence oversight, a consistent, robust experience that are all focused on achieving the goals set between the FA and the client.
What are the biggest issues confronting the wealth-management field today, and how should it be addressed?
I’d say that the biggest issues are complexity and speed. Markets change rapidly; technology moves information faster than ever; our clients have complex needs.
The mission of the GWIM CIO office is to help our clients make sense of the markets and a complex world in the context of their own lives. We are focused on providing actionable guidance, anchored in our goals-based approach to help our clients achieve desired outcomes.
Over the last few years, we’ve simplified our platform so that our financial advisors and clients can look across their accounts for an accurate view of all of their holdings, rather than viewing them in separate account buckets. Along with that, we simplified our fee structure and made it more transparent, so that clients know what they are paying. And we’ve re-focused on the importance of goals-based wealth-management supported by CIO team research.
What challenges do you face in your career?
I don’t really see challenges. I prefer to think of them as opportunities to expand my understanding and to gain experience.
Would you like to share anything else?
My approach is to consider every interaction and opportunity for me to learn from someone else, and to share ideas with them. Connecting in this way makes every interaction positive.
My other observation is that while hitting the occasional home run is great, striving to be consistently good can also serve you very well.