Jack Sharry: Welcome, all. Thanks for joining us for this week’s edition of WealthTech on Deck. I’m very pleased to have a longtime friend and colleague of the business join our podcasts conversation. I’ve known and admired Jay Link for a long time. I think we can count the number of years we’ve worked together in some capacity, you can do that in terms of decades. Jay is the managing director and the head of fiduciary programs and platforms at Bank of America Merrill Lynch.He leads a team that is responsible for all aspects of a $1.2 trillion multi channel investment advisory business with annual revenue north of 10 billion. Today, we’re going to talk about what he and his colleagues have been up to as one of the leading advisory firms in our industry. Jay, so good to have you join us on WealthTech on Deck.

Jay Link: Hey, Jack, first, thank you. That’s very kind. I’ve got to say, I’ve also admired you in so many ways for so many years. I’ve listened to many of your podcasts. So I feel very grateful to have been asked to participate. So thank you. It’s really good to be with you.

Jack Sharry: Yeah. And we, Jay and I saw each other at the MMI meeting not too long ago and got caught up. We hadn’t spoken in a bit. So good to catch up, as always, so. So, Jay, let’s start with you taking a short trip down memory lane. If you’d share with our audience about your background, career journey, how did you get into the business and a little bit about how your career has evolved?

Jay Link: Sure and Jack to answer those questions, if you’ll bear with me, I’d like to go way back.

Jack Sharry: Sure.

Jay Link: If that’s okay, just for some context. So I grew up in the rural Deep South, a very small community, great people, modest means, mostly farmers actually.

Jack Sharry: Really? What state was this?

Jay Link: South Carolina.

Jack Sharry: Okay.

Jay Link: Literally in the middle of nowhere. And there are lots of benefits to small town life. But from a very early age, I really felt like I was missing out on something bigger. And I think it was mostly because I had personal dreams. I had some aspirations for a different lifestyle. And I kind of saw myself in a more refined professional work environment, if you get what I mean.

Jack Sharry: Sure.

Jay Link: My mother tells me that I insisted on wearing my three piece Easter suit to kindergarten. I was a teenager in the 80s. I loved reading business biographies, watching TV shows like LA Law because they were exciting and they kind of brought to life what I really wanted.

Jack Sharry: Wow. Yeah.

Jay Link: So fast forward. I had a family member on my mom’s side, he was an account executive. That’s what we used to call financial advisors, an account executive at Dean Witter, which I know you and I both have in common. He was later a branch manager in Florida, in Chicago, and during my junior year in college, he turned me on to a summer internship opportunity in the big Dean Witter flagship Chicago branch. It was kind of a formal program, maybe a dozen college kids, mostly from the Midwest that knew people. But for me, it was a world away and I got a spot and despite the fact I was 20 years old at the time, when I stepped off the commuter train on that first morning in downtown Chicago, it was the first time I’d ever really seen skyscrapers in person.

Jack Sharry: Yeah.

Jay Link: How we were really in a position to help them. So at the time, it wasn’t fully formed in my mind, but it really struck me that, wow, what advisors do is really important. And then what we do to support advisors is really important. And of course, what asset managers do equally so. So it wasn’t just, you know, a way to rescue me from simpler country life, I appreciated wealth management as a, I guess, a noble profession. So as luck would have it, you know, I was assigned to a team that did a lot of taxable bond business, I would occasionally call for bond bids in New York, and I came across this support desk at Dean Witter called bond line. And it was an entry level 20 member desk, they helped facilitate trades. And you know, long story short, I got an interview and I was offered a spot right after graduation so I was able to move from that little South Carolina town to New York City. I mailed myself everything I owned in three cardboard boxes. I walked out on the trading floor at World Trade Center. I slept on a sofa for a month while I looked for an apartment. But it was such a great environment because you know, we had watcher, it was all about Fed policy, interest rates, conflicts between traders and FAs. And over the next 15 years, you know, Dean Witter became Morgan Stanley and I earned some larger home office roles in capital markets and investment advisory including one of my favorite assignments, which was creating and launching Morgan Stanley’s rep is portfolio manager platform, which we were the last to offer… Years at JP Morgan asset management, and then Merrill called because they needed help with rep SPM as well. And it’s been almost 14 years and I now lead a great team that looks after the whole investment advisory business.

Jack Sharry: That’s great. One of the things I love about this podcast is I get to hear stories like you just shared. It’s so many of us had humble beginnings, and just had the dream. And if you work hard enough, and have a couple of smarts and put your nose to the grindstone, here we are, so that’s great. Let’s zero in on what you’re doing at B of A Merrill, what you and your colleagues are up to, and I know you have a lot going on. So fill us in, what are you guys working on?

Jay Link: Yeah. As a company, maybe just from the top of the house, we’ve been focused for years now on what we like to call responsible growth. Simply put across all of our lines of business, including Merrill, we, of course, want to do more with our clients, but we want to find new clients and do it the right way. And so realize that strategy at Merrill, we have declared a few things. And I’ll sort of get into what it means for for my team, but we want to continue to be the best place to be a client, full stop. We need to create and deliver a great experience for our advisors. And of course, we need to focus on developing the next generation of advisors to sustain the impact on the future. Because you know, just like clients, advisors are aging, and they’re going to retire eventually.

Jack Sharry: Sure.

Jay Link: So when we think about those aspirations in the fiduciary business, a few things, I mean, we balance our days pursuing a lot of initiatives that kind of run the gamut. So on one end, a lot of things that are not very sexy, but we’re relentlessly focused on removing friction and pain points, and potholes, because these are the administrative nuisances that we hear a lot from our teams that waste time, they’re outdated, they’re redundant, they’re manual. So taken together, they can make a big difference in capacity. But on the other end, and this is the fun stuff, delivering on value add innovation. So for example, we’re not the only one, but a few years ago, we introduced some overlay, tax loss harvesting capabilities across all strategy types, also ensuring that all cash flows and withdrawals were done on the most tax efficient basis to reduce tax drag, that’s seemingly becoming so critical in the eyes of clients. They’re optional. But adoption is at an all time high. And next up, we’re going to be introducing some client reporting that will show clients their estimated tax savings for any group of accounts over any time period, in very simple dollar terms. You know, so this is your tax alpha, that sometimes more than offsets your advisory fees. So we’re excited about that. It’s just a beginning foray into sort of a value report. Another example, modernizing what is admittedly an old school concept in our business, which is the dual contract arrangement. So we introduced recently a service called premium access strategies. So our flagship advisory program is great for most clients, but ultra high net worth, in particular consistently shared that, hey, we’re interested in some pricing power, the ability to negotiate fees, we have more customized needs, sometimes we want access to the portfolio managers that are managing our money. These are all attractive features that typically have not been available in model delivery. Mostly, they’re cumbersome and they’re manual, but we ported those features over to our flagship platform, which offers all of those benefits, but also scale benefits around workflows, risk controls, other features that advisors love about the platform, and we really think unlock some interesting opportunities in other strategy types and multi asset in particular. Another example, you know, we’ve invested a lot recently in creating a modern, integrated planning and proposal tool that replaced two standalone systems. They were completely disconnected, they were sort of complicated to use, therefore, they weren’t used very often. So that’s really helped to significantly increase planning adoption. I think we’re north of 62% of clients have an updated plan within the last couple of years.

Jack Sharry: Wow.

Jay Link: But importantly, with one click, advisors can take the results of a proposal and port that directly into our enrollment system, which populates probably two thirds of the client data and attributes. So for the first time, we’re connecting, planning, proposal, and implementation. It’s beginning stage, but you know, we have a roadmap to further that cycle, just to make sure that this is an ongoing activity and not sort of, you know, once and done and get stuck in the drawer, if you will.

Jack Sharry: So, Jay, I’m always interested to hear from our guests on what they’re especially excited about, you’ve got a lot going on. I love what you’re doing around planning, proposal, and implementation. I think that is the holy grail, ultimately. So if you’d share with us what’s, what are you excited about? What are some things that you’ve got up your sleeve that you’d be willing to share?

Jay Link: I think in a general sense, lots of people find change uncomfortable, but for some reason, I’ve always been really energized by it. Because in my experience, at least, it presents so many amazing opportunities for those who are curious. And I guess well prepared. And of course, we’ve seen such remarkable change over the past decade or more, it’s only accelerating complexity seems to be spiraling. Think about the pace of wealth creation, wealth transfer, peak 65, just longevity challenges, you know, all to us points to a massive opportunity, and arguably the biggest bull market for advice, maybe of our lifetime.

Jack Sharry: I agree.

Jay Link: People need us, like we said before, and we have a unique ability to help navigate, you know, all of this. So for those reasons, I also think that wealth management can and will become a destination for young people entering the workforce, maybe more so than it’s been the last 20 years or so.

Jack Sharry: Gotcha.

Jay Link: It’s cool.

Jack Sharry: Yeah, yeah.

Jay Link: I actually think a lot about the economics of our business and the value chain. And Jack, here’s what bothers me to no end. I think, as a collective industry, the value of what we do for clients has never been higher. And yet, our fees have never been lower.

Jack Sharry: Yep.

Jay Link: And, you know, despite inflation everywhere else, fee compression is a reality. We know the reasons for it. But I personally think that there’s significant unrealized value across the value chain that could be extracted and realized, not necessarily in a zero sum way, partly because the pie is growing. But also because technology can deliver new capabilities that themselves are valuable. And I, you know, I see that for clients, I see that for advisors, and I even see that in the work we do with with asset managers. I guess the final thing I’d mention is, you know, what, I guess I’ve realized is maybe the most important thing that I can do as a as a leader of teams, and that is to lead and to develop others and to give back. I spend a considerable time every week on team culture and creating a supportive performance environment that really promotes engagement and frequent recognition. To me, there’s nothing more satisfying than watching someone who you’ve coached and mentored achieve really important milestones or promotions or delivering on successful projects. We all remember what it’s like early in the careers and challenges we face.

Jack Sharry: Sure.

Jay Link: So that’s really something that I have a lot of passion that I didn’t realize that until I really started doing that, and…

Jack Sharry: So I had the opportunity to connect with Jay at the MMI along with a number of other younger folks in the industry. Jay joined our session, which I was quite heartened to see, along with John Drahzal, CEO of Horizon Investments. We had a robust conversation about AI, we, it was really a moderated conversation I did with Danielle Learned from Horizon, as well as Nick Alfier from BNY Mellon. So we had a conversation, it was designed this way to have conversations around leadership and where it all goes. And Jay played just such an important role as a senior leader in our industry for a long time. And I’m not at all surprised that this is a passion of his to develop culture, develop team, develop the next generation. And he really weighed in importantly, Jay did as well as John Drahzal. Both senior folks, been around a long time, know their stuff, really great leaders in my observation. And it was great to work with a couple of younger folks in the industry, who will soon be leading the way for our industry at large. So, Jay, I’d love to have you weigh in. And I know it was a wonderful experience for me, it seemed to be a great experience for you. You seemed to be every bit the student as well as the teacher in that session.

Jay Link: Yeah, that was one that I really enjoyed more than I expected to I think it was built sort of as talent management. But you described it really well. And the engagement from most of the room at various levels about the way people want to be led and what’s important around authenticity and communication and recognition. I did I learned a lot and I’m glad that I was able to contribute. So thanks for mentioning that. And thanks for doing that. Oh, you mentioned listening, Jack. And there’s so many things that I’ve heard you say over time, that for some reason, really stick with me. And one of the things that you stressed during that session, too, was the importance of being interested and not interesting, which really speaks to the art of listening for purposes of learning and listening not, you know, to determine what you’re going to say next, that was really impactful for me.

Jack Sharry: Yeah, it was it was a whole lot of fun. And one of those wonderful surprises, I figured it would be all young folks trying to figure out how to how to be a leader, how to evolve in their career, that’s an important part of their perspective, as it should be. But what was so much fun about it, it was all different levels, all different tenures, if you will, in terms of people’s experience, and we really had a wonderful conversation and it got back to what I just learned in an earlier conversation with Jay before we got on the air is he has a passion for persuasion, as do I, I’ve written a book on the topic. He recently gave a presentation on the topic of persuasion, you want to…. touch on that if you would like, Jay. But what was interesting about the dynamic of all that, what we all got back to was about listening, about connecting, as Jay just mentioned the fundamental issues of authenticity and trust. So it was a really robust conversation. And Jay, I just salute you, because you really added to it, it was great for especially the younger folks in our audience to hear what someone who’s been around for a while had to say and what they seek to do in their, their position as a leader in their organization. Yeah, a lot of fun, really enjoyed it. So we’ve talked about your career, which I love the story, we’ve talked about what you’re doing at Merrill, which is a ton. And I’m sure there’s a lot more behind that. Let’s talk a little bit about where things are going. Where do you see the industry going? Where do you see Merrill going? Talk a little bit about your future view.

Jay Link: Well, I think it’s safe to say that advisors will continue to move around, you know, the testing alternative models and platforms, because there’s so many more options. And, frankly, more motivations now that are unique to the individual. But having said that, no matter where they practice, the role of the advisor will continue to evolve well beyond investments. And that’s not new. But I think that’s going to drive more and more to form large, sophisticated teams. Because to stay competitive, they’re going to need specialization, but they’re also going to need capacity to grow, to serve more family households, but also diversity, to better address the multi generation wealth transfer, and also societies that we serve. And I think some are going to be pretty big businesses, and certain members will need to emerge and understand skills that I think have been those of CEOs, which is a growing dynamic. I also think the expectations of clients are going to continue to evolve. You know, our research shows that, especially as investors age and they approach retirement or maybe other goal milestones. They increasingly prefer a single primary provider who can handle, you know, holistic wealth management needs, including both the advised and self directed investment, but also banking, and we believe the winners will be those that can truly serve as that primary one stop provider. I also think that alternatives and private markets have to become more accessible and integrated. Generally speaking, there’s broad agreement on the benefits of diversification risk return benefits and the like. But we continue to see and I think we’re not alone, vast under exposure for most clients, year after year, despite what we try to guide. And you know, there’s a lot of structural and administrative and educational challenges that I think we need to address. But I think with new exposures, new technology, new platforms, new product structures, I think that’s going to become a big deal in the coming five to 10 years.

Jack Sharry: Yeah, I just attended the Tiburon conference. And one of the things I was frankly not surprised, a little shocked, but not surprised to learn is that the lion’s share of the growth in our industry has concentrated in the big national firms. It’s not the RIAs. Now, you mentioned RIAs just in passing…. as someone you pay attention to, as you should. But it’s sort of interesting, the real growth in our industry, and in order, in terms of net new assets, organic growth, stripping out M&A, stripping out, sort of double counting of assets and so forth. It goes Fidelity, Schwab, Vanguard, Morgan Stanley. And then after that, I’m not sure I have the exact right order, but it includes Merrill, LPL, Edward Jones, and there’s one other I’m leaving out, but it’s all the big firms that are leading the growth. And if you look at the rest of the growth of the industry, again, stripping out for M&A and markets and that kind of thing. All the growth is from those firms. In other words, the rest of the industry has negative growth. Basically, in negative territory. I’m curious what you think. I mean, it seems to me that competition is good that you pay attention to all those different types of firms, and you’re always trying to get better, but weigh in, if you would in terms of that whole dynamic that, that’s the big one stop shop firms that seem to be leading the way.

Jay Link: Yeah, I mean, some of the companies you mentioned, we don’t necessarily think of as peer group competitors, but they’re certainly competitors. Because you’re right, they are extremely capable at client acquisition. And I think a lot of that is because what they offer continues to grow and evolve. It’s not just self directed like it was. It’s a lot of advised. It’s a lot of sophisticated solutions, but they’re also incredible marketers, and they’re very good at I think getting the attention and keeping things simple. And sometimes, speaking for myself, we sometimes make things more complicated.

Jack Sharry: I have an old boss, he used to say, “This is a pretty simple business.” So and he’s right, even though there’s a lot of complexity under the hood. So. So, Jay, this has been great, really enjoyed our conversation, as always, and as we look to wrap up, if you would be kind enough to share a few takeaways from your observation from where you sit at Merrill.

Jay Link: Sure. So I think this hopefully has come out. I mean, I believe there’s never been a better time to be in the wealth management industry. And there’s so much change, creating so many compelling opportunities for the bold and the curious. Second, I guess I would just encourage everyone to find the time, make the time, find the joy, in giving back and helping others realize their potential and their aspirations. You know, we it’s on all of us to shape the leaders of tomorrow. And at the risk of maybe sounding a little bit corny, I think there’s probably never been more of an exciting time to be alive. I mean, there’s so much divisiveness and risk and churn and danger in the world. But at the same time, it’s really exciting to me to anticipate what we might experience over the next 10 years, things that are probably impossible to imagine today. I mean, our research, our B of A global research puts out some really interesting thematic pieces. And they know things like you know, we’re gonna see flying cars unveiled in Paris at the Olympics this summer. And, you know, AI has, I think, discovered over 2 million new materials, some of which are likely to dramatically improve everything, the cost and performance of even the mundane like batteries or huge opportunities and healthcare, like mapping DNA to predict diseases well in advance, which should lead to a great improvement in quality of life and length of life. So there’s a lot of disruption that will come with that and lots of rescaling but it could really produce a world of abundance.

Jack Sharry: That’s great. So, Jay, as always, my friend great to have this conversation. We should do this more often. Not necessarily with a mic in front of our face, but really enjoyed the conversation very much. One last question, my favorite each week, what’s something that you do outside of work that you’re either excited or passionate about that people might find to be interesting or surprising?

Jay Link: Well certainly in the vein of, of passion, the importance of family to me. And my wife happens to be in our business. And we have a wonderful 17 year old daughter that despite being 17 is still a total sweetheart. We do lots together. International travel in particular. As a family, I think we’ve visited 28 foreign cities in 18 different countries.

Jack Sharry: That’s great.

Jay Link: We play a lot of golf together, we cook together, I love to take both of them on one on one date nights. That’s fun. And I guess the other thing, you know, in our business, we sort of deal in the abstract at times, we sell ideas, we sell dreams, you can’t always see the tangible results. As a result, I find that I love to work with my hands. I’m so excited when my wife orders something online that I actually have to assemble. Because I get to get out my toolbox and put it together and see it, the before and the after. So to me, that’s really fun. I don’t know if that means I’ll be a carpenter or a woodworker one day, but we’ll see.

Jack Sharry: That’s great. You know, Jay, I think, I know we’ve known each other at least 30 years, I think I’m gonna guess there. I haven’t done the math, but it’s somewhere in that neighborhood, and we’ve never had this level of conversation. I love it. We got to do this besides when we’re on a podcast. So thanks so much. This has been a wonderful conversation. For our audience, if you’ve enjoyed our podcast, please rate, review, subscribe, and share what we’re doing here at WealthTech on Deck. We’re available wherever you get your podcasts. Thank you again, Jay. It’s been a blast. I really enjoyed it.

Jay Link: Thanks, Jack.