Investing in Financial Security: Masters in Business with Salim Ramji

SPEAKER_1 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News.

Barry Ritholtz (0:07)

This week on the podcast, yet another fascinating conversation. I sit down with Vanguard CEO, Salim Ramji. Previously, he was at BlackRock helping to oversee iShares and indexing. He's got a fascinating background and really one of the people in the wealth management industry who is so uniquely situated to see all of these different things that are going on. What a great perch to observe the future of wealth management. I thought this conversation was fascinating. And I think you will also, with no further ado, my conversation with Vanguard's Salim Ramji.

Salim, welcome to Bloomberg.

Salim Ramji (0:58)

Well, thanks Barry. It's great to be back. I think we did this about half a dozen years ago. Right in the middle of...

Barry Ritholtz (1:03)

In peak COVID. Yeah, it was a frightening time.

Salim Ramji (1:06)

Yeah. I want to talk... It's nice to be in a studio.

Barry Ritholtz (1:09)

Yes. I want to talk about your career and what led you to Vanguard.

But I have to start by asking about your academic background. Bachelors in Economics and Politics from the University of Toronto, and then a Masters in Law at Cambridge. And I'm assuming a Masters in Cambridge is like a JD here, is that right?

Salim Ramji (1:32)

Kind of, yeah.

Barry Ritholtz (1:32)

Kind of? Was the original career plan becoming an attorney?

Salim Ramji (1:37)

Neither of my parents finished high school. My dad used to run a grocery store that I worked in as a kid.

And from my parents' point of view, they just wanted me to go to college. And so I don't think there was any great kind of original plan other than I thought like going to college would be a good thing. And I was drawn to the law, and ultimately my first job was at a law firm in London, in part because there were so many exciting and interesting things happening in the world of kind of law and business in the early 90s in Europe at the time. And so that for me was kind of a compelling piece, but I wasn't one of these kids who was like, you know, from the age of 10, they wanted to be a lawyer from the, you know, from, from that. It was more, it felt like a really interesting time at that point with like markets liberalizing and lots of markets opening up all over the world.

Barry Ritholtz (2:41)

I'm curious how your upbringing affected how you look at money. You mentioned you worked in your dad's grocery store.

Both your parents were immigrants working and living in British Columbia. How did that affect how you have a relationship with money and work?

Salim Ramji (2:56)

It probably, you know, some of these things you don't really truly understand until years later. But we didn't always have a lot of financial security growing up. And I'm at a company that cares very deeply about people's financial security. And you can sometimes abstract kind of that away in terms of what it means. But at least for me, I know what having it is and I know what the absence of it is. Obviously, having some financial security is far better.

And I think it really drove home for me the real importance at a kind of very personal level as to what financial security means in somebody's life or somebody's family and the importance of it to so many other things in terms of like the general kind of happiness of the house, the levels of stress in the house, the freedom to be able to do things kind of once you've attained it. And so, financial security isn't a...

It's something that I know kind of deeply, because I know it's absence too. And so I think it makes it meaningful for me, even if you ask the 20 year old version of me, I wouldn't have thought of it in that way.

Barry Ritholtz (4:12)

I think a lot of people don't realize the first checkbox is lack of financial stress is a huge weight off people's mind.

Salim Ramji (4:19)

Yeah.

Barry Ritholtz (4:19)

If you could solve for that, everything after that feels like gravy.

SPEAKER_1 (4:23)

Yeah.

Salim Ramji (4:24)

No, I absolutely agree.

Barry Ritholtz (4:26)

So you're working in London in Clifford and Chance. You also spent some time in Hong Kong.

Salim Ramji (4:31)

I did.

Barry Ritholtz (4:32)

Was that doing legal work? It was doing legal work. And then how do you transition from that to McKinsey? What led to that?

Salim Ramji (4:39)

It was, you know, like I enjoyed the business part of being a lawyer. Like I'd work in financial markets, I'd work in M&A, and I was always interested in what happened after the deal closed in the business aspects. And McKinsey, for me, kind of offered the chance to still be in a professional services firm, which I liked.