Jack Sharry: Hello, everyone. Thanks for joining us on this week’s edition of WealthTech on Deck, we try to mix things up on our podcast from time to time. And as we do each quarter I like to share my perspective on what I’m seeing and hearing and learning is I have the privilege of daily conversations with industry leaders, doers and disruptors. For this special edition, I’ll share my perspective on lessons learned from our collective experience of dealing with COVID-19. Over the past three years, it was three years ago this month that we all came to learn what this global pandemic meant him and what it would do to our daily lives. I’ve identified five key lessons where I think we all learned a great deal about where we are in the advice business, the FinTech business, and where we might be headed. We’re calling this week show what COVID-19 taught us about the future of financial advice. Once again, my friend and colleague Matt Nollman, who produces our podcast will be the host for this episode, Matt, the host microphone and chair are yours, my friend, take it away.

Matt Nollman: Thanks, Jack. It’s nice to be on the other side of the aisle. And I’m really looking forward to talking with you about this today. So we’ll jump right into it. As we’ve discussed quite a few times. I think what’s happened over the past three years as it pertains to our business, and really all businesses has been nothing short of completely impactful in a variety of different ways. So I’m really excited to hear your thoughts on how the future of advice has changed as a result of the pandemic. But let’s start with you identifying those five key headlines on the change we’ve discussed. And we’ll spend time then diving into each of those five key areas. So why don’t we start with the first one.

Jack Sharry: Cool. So as we know, COVID started three years ago, it was a harrowing experience for each one of us, our families and loved ones. Here’s what in my opinion matters and then the use ahead will continue to matter. So here goes. Number one planning matters. planning for retirement has always been important, but as we will discuss, it has become even more important in light of what COVID taught us people’s lives are more complex than ever. Planning is more complex than than any point before. And clients and advisors will need to be fluid and flexible over the course of not just years in retirement portfolio will have for many be decades long retirements. So number two purpose matters. As I learned from conversations with so many on the podcast, as well as in daily conversations with friends and colleagues, with the likes of people like Ken Dychtwald, Ken Cella, Rose Palazzo, John Thiel, Michael Liersch, Amanda Lott, Riley Etheridge, Kimberly Beck and many others. Purpose matters. Now more than ever, we’ll get into that. control matters, control what you can do, you can control taxes, and not much else we’ll discuss that in more detail, we lost a lot of control it seemed during the COVID experience. Number four human beings matter. Clients want to work with a human being they want someone who listens, cares and pays attention to them above and beyond their portfolio. As things get more complex technology will do the math, present options and next best actions. But clients want a human being not bots to manage their money and provide guidance beyond their portfolio. And number five, managing assets, liabilities and life decisions in a comprehensive way matters again, we’ll discuss in greater detail.

Matt Nollman: Jack, that’ll give us a quite a few things to talk about today. And I know we want to unpack each of them and get some really good details on each. So let’s start with the first one. Hasn’t retirement planning and financial planning always been at the center of providing sound financial advice and guidance? Or is there something else here that I’m missing?

Jack Sharry: Well, Matt, you raised a fundamental question. No one disagrees. Planning has always been essential and important. It just not been done very well by too many folks, somewhere north of 90% of clients don’t have a real working plan. We don’t like to say it out loud. But that is the reality. So COVID taught us that it is not only critically important to have a plan but also to include a healthy dose of flexibility in the plan, because the unforeseen can and as we discovered will happen. So millions of retired early during COVID. As retirement accounts swelled, then inflation struck. The market slid many trimmed expenses and tempered lifestyles. Many recently retired folks went back to work actually in record numbers. And don’t forget where and how we worked and communicate has also changed forever. Lives and perspectives were altered and that will continue to happen in the face of constant relentless change, especially as people live longer. My conversations with retirees and experts alike underscored the vital importance of advisors working with clients to manage all aspects of retirement not just their portfolio. Investors have more on their minds. They wonder, how will I deal with health care costs? Will I outlive my savings? Will I be able to help family members who need financial support? What will I leave by children and grandchildren, some can’t articulate their worries others avoid the topic they want and need advisors help in sorting it all out, as Ken Dychtwald told me in our recent podcast, and the research he’s done for Edward Jones can take well pointed out that people are living longer or conducting themselves differently in retirement or they want to do some work, some play some volunteering, some travel some time with the kids or grandkids. COVID made us all understand that we not only need to plan better, but we need to be nimble and flexible. Because stuff happens and things change.

Matt Nollman: No doubt. So switching gears a little I know that Ken Dychtwald and other leaders that you mentioned a few minutes ago think that while money is important, and seems to be the obvious reason of why consumers seek advice, the most important question that we’ve heard people ask and that we’ve examined is what’s the purpose of your wealth? And a lot of people don’t think down this line, especially all the way through. So why don’t you fill us in on why this is so important, especially given the people who have who have reiterated this information to us.

Jack Sharry: One of things I love about paying attention to the marketplace of research and just daily conversation is that the truth emerges, it just shows up so it’s kind of like well described COVID-19 He called it a near death experience that made many people consider what matters most to them in life. Most people stopped, reconsidered and ask themselves, what matters to me and my family. Michael Liersch, a good friend who happens to head up advice and planning at Wells Fargo has had a lot to say about this over time, but the purpose of one’s wealth. Michael, of course has a doctorate in cognitive psychology. He taught behavioral finance at the NYU Hughes Stern School of Business. And he built programs and tools at Merrill and JP Morgan before joining Wells Fargo. Michael worked closely with John Thiel and Riley Etheridge at Merrill. Together, they encouraged every advisor to ask clients, what is the purpose of your wealth? Today, Wells Fargo Michael leads a team that just rolled out what I consider to be an industry breakthrough. It’s a mobile app called Life sync. It builds on its financial planning and data aggregation process and has built in business intelligence to keep track of what matters to the client. We have a podcast coming out soon, I highly recommend you listening to it. It’s really talking about the future advice. Michael has captured it. The app is an advisor client collaboration tool that is designed to present information and options the client really cares about. Over and over Jones, they are investing in tech and training to shift the dynamics of the client advisor relationship. Jones hired dipole to conduct extensive and ongoing research into what they call the new retirement journey. Survey respondents said money is only part of what they think about having a purpose in life. maintaining their health and taking care of family to steer their financial decisions is what really matters to them can sell who leaves the Edward Jones branch system and can die called talk with me about this on my podcast, I suggest listening to it’s actually one of our most popular podcasts, they’ve talked about a lot of very important stuff.

Matt Nollman: I really liked that episode personally. So I would second an audience call to listen to that one moving on down our list because I know we have a few things to talk about today. One issue that a lot of folks grappled with during COVID was control, or really the lack of control that they actually had. Your third point that you made is that consumers are looking to control what they can. And in working at LifeYield, I’ve come to know and realize that taxes are really one of the only things that you can control as an investor and advisor. So why don’t you dive into this a little bit more and fill our audience in on why this is so important.

Jack Sharry: Sure, investors found during COVID They couldn’t control much they couldn’t control health events, the market inflation, domestic politics, world conflicts, so much was out of their control and felt the times out of control. And as the market became less generous as COVID grinded on and as inflation took off, it seemed about the only thing that you might be able to control his taxes. Well as it turns out, taxes are the most considerable and controllable expense in retirement period. If client portfolios are performing and you can’t minimize taxes, clients will look for someone who can. There are many strategies to achieve tax Alpha tax loss harvesting as a start, asset location has the most impact on accumulating and withdrawing money in retirement. My colleague, Paul Samuelson explains, the value of asset location accelerates as clients age have larger incomes and the impact of compounding kicks in when it’s time to convert assets into income. Clients want to know all the ways to maximize the retirement paycheck like waiting till seven eight to collect social security benefits as an example. And they also want to know the best way to minimize taxes because they intuitively understand that taxes can be reduced and should be reduced in the film The they knew how they would do it. To maximize retirement income, you need to master the tax smart asset allocation, asset location, account rebalancing long term gain deferral tax loss harvesting, buying equivalent assets and using IRA withdrawals to fund Roth conversions. And you need to do this in a coordinated way. Fortunately, I know of a technology company that can help you with all this. So for those that have not caught on to my little joke, here, it is lifeyield.com that you might want to check out. But point of all this is there is a way to control it, taxes matter. And so many firms are catching on to that and doing something about it. So managing portfolios at a household level, a unified managed household, or UNH, as it’s been called, holds the most promise for advisor and investor success over time. And it’s really just wrote about this last month. And they have said that more and more advisors are moving toward this approach. Some firms are leading the way, and challenging those who are frankly, dragging their feet.

Matt Nollman: So moving on down our list here. Your fourth point is that consumers participants and clients all want to need guidance from a human being, especially as they move closer to retirement. And things become more and more complex as they enter the decumulation phase of their life and so many different rules and regulations that they need to know or follow in order to elongate their runway and make sure their portfolio lasts as long as they want. So going back to the human piece, especially as technology is on such a rise and all of the experiences that we have, especially as they relate to wealth management, why is human advice and speaking directly to human being still so important to this process?

Jack Sharry: So it’s an interesting convergence that occurred during COVID. Not only do we have COVID to contend with, but more people retired or turned 65 than at any point in history, upwards of 10 to 12,000 people per day COVID By all accounts and that demographic shift, increased demand for personal advice when you’re going to make that move from drawing a paycheck and working each day to stepping out into the unknown. personal financial advice is a requirement frankly, at least in my mind, and I think most people found that to be the case. What’s happened since is only elevated the need for advice for from those who invest in employer sponsored defined contribution plans and those with taxable brokerage accounts. Empower CEO Ed Murphy described this trend as the insatiable appetite for advice that is unabated. Again, he was on our podcast recently refer you to that podcast. Another good one by Edie. Everyone I speak with agrees financial advisors won’t be replaced with AI or robots. Yes, there’ll be enhanced by those capabilities, but they won’t be replaced. The US Bureau of Labor Statistics predicts employment of financial advisors will grow 15% from 2021 to 2031, much faster than the average for all occupations it tracks. people crave the human touch someone with empathy and knowledge with whom they can share what they want their money to achieve for them and their families. Even when technology is doing the heavy lifting, which it has and will they want an advisor explain how and why and provide help in determining priorities and the next best thing to do. For him financial is an intriguing study and personalizing advice for selected audiences. They happen to focus on residents, fellows and practicing physicians is Chief Wealth Officer Bill Martin told me on our podcast, they built an engine through powerful tech partnerships between Orion money guide, pro and LifeYield. Data he said is the oil that powers the motor, and Wells Fargo. Our friend Mr. Liersch explained LifeSync creates, quote, collaborative fluid, normalized conversations about money. When you provide true advice, really understand what that person is trying to accomplish. It leads to specific areas about investing strategy and more. It may start with an app. But apps won’t replace human conversation. These that’s my opinion, and I have yet to be proven wrong in that regard.

Matt Nollman: Honestly, Jack, in my experience, you couldn’t be more right. I mean, I deal with a financial advisor as well. And it’s definitely the convergence of technology and the human touch that creates the most trust for me working with him. So, no doubt, is that true. We’re getting close to the end of our list here. And your final point that you made is that consumers, participants and clients all want and need a comprehensive approach to wealth management. And that’s a loaded word comprehend have. So to me, you know, just reading that it seems obvious, you know, why wouldn’t an investor want a full comprehensive approach to wealth management, but, you know, considering what this means to us, maybe explain that and explain why we kind of think this maybe isn’t happening or isn’t happening as fast as we would like.

Jack Sharry: So to successfully develop a UMH, or a comprehensive wealth management platform requires sophisticated and coordinated technologies, and a lot of human and financial capital. There are firms Morgan Stanley is a good example. They’ve been working on this since 2009. They’re the clear leader, they’ve invested the most time, energy and money in in the process, and their work is not done as they would admit. Our industry wasn’t built for this comprehensive kind of approach. But it really is now recognizing it’s a competitive imperative. We are now in a heated race to build comprehensive ecosystems, where data is consistent and fluid where different technologies talk with each other. And a multi-year effort across the enterprise is led by the highest levels of senior management. In order to make all this happen. We also have some habits to break. I’m as guilty as anyone. Our industry has had a long-standing habit of product as panacea. It seems to have reached its peak during COVID. Millions of investors flocked to online trading platforms like Robin Hood, there was the meme stock frenzy, and the Capstone cryptocurrency. Dare I say it showed how dangerous it is to rely on a single idea. As a sales and marketing leader for many years, along with many others, I’ve designed as many of my colleagues, we have designed, developed package and promoted an endless stream of products that we rolled out each purported to be better. As a sales and marketing leader for many years, I, along with many others, have designed, developed, packaged and promoted an endless stream of products that we rolled out each purported to be better than the last. Don’t get me wrong. Products are good, but no single product achieves anyone’s financial goals, stock markets swoon, inflation and tax legislation happen. pandemics aren’t new either. As my colleague Paul Samuelson reminds us history teaches us if we only listen to the work of his father, Nobel laureate Paul A Samuelson inspired Vanguard founder Jack Bogle. Their thinking has withstood the test of time, and should inform the guidance of advisors to provide to clients. Don’t time the market. Stick with your plan, even when things get rough. Don’t hold concentrated positions, including in your own company or employer. Pay as few taxes as legally possible. Look at your portfolio holistically. follow that advice and use all the levers available investment choice account selection, asset allocation, asset location and rebalancing trades and withdrawals required minimum distribution or RMD. Management and Roth conversions, all to generate the best kinds of outcomes, financial outcomes for clients, advisors, and firms. All this can be achieved through the confluence of human and digital advice, implementation and monitoring.

Matt Nollman: So Jack, before we wrap up and give our three key takeaways, I have one more question that I’d like to ask. So as an avid listener, and producer of this podcast, we do the show every quarter, and you provide your quarter over quarter views and review on what you’re seeing in the industry. So my question to you before we wrap up is what’s different now or this past quarter versus previous ones that you’ve done, or even just the period of the pandemic?

Jack Sharry: Yeah, all that we’ve described here has evolved over the past three years, what I’ve seen, since we do this type of show a quarterly review of what’s changed, since we do it each quarter, what’s changed since the last quarter as I think the key thing is that things are accelerating. All this has been in place, everything we’re describing takes time and money, a lot of each time and money, a lot of people. And what we’re seeing is it’s becoming much more we’re seeing in the daily press. And frankly, a lot of what’s going on here, you and I taught me all about it, Matt, is FOMO Fear Of Missing Out people are recognizing that the world is moving in this direction. And I observe an acceleration where there’s a greater clarity and understanding of what needs to be done and the work that needs to take place. And that’s what’s underway. So the good news, I think, for consumers, investors, participants, the good news for advisors and for firms is it’s accelerating, it’s still gonna take time progress is being made. Good example is what we talked about with LifeSync and Michael Liersch. That’s just come out. They’ve been working on that thing for a couple of years. But it’s now it’s in hand, you can literally hold this app, and you can start to make important decisions that will have a lifelong effect. So the good news is things are moving quicker.

Matt Nollman: Honestly, as a listener, it’s really encouraging to hear your answer there in that even though the economy’s you know, quote rough and things are up and down all the time very volatile that Other companies and firms that are focused on wealth management and really improving that are investing in technology still, they’re still trying to enhance their ecosystems and their processes and all the different things that affect and improve outcomes for their clients and their investors. So, and we see that with through the clients we’re working on at LifeYield. But to hear you come through with all the people you talk to, and reiterate that I think it really will land well with our audience on the shift. So look, Jack, this is an amazing episode as always, every quarter. But one thing that we do every week, as we look to wrap up is what are your key takeaways, three key takeaways specifically that you’d like to share with our audience, because I know you made a few really impactful important points today.

Jack Sharry: So frankly, all five headlines matter. But if I had to pick three, here’s what I’d say is planning matters. And you have to implement the plan in a tech smart, risk smart way we’re seeing that’s being observed across the industry. Purpose matters. Well, once you understand what is important to the client, your advice can be focused on helping them achieve their objectives. So understanding their purpose makes for better advice and better implementation across the board. And the third is managing assets, liabilities and life decisions in a comprehensive way matters. And that’s really what the industry is working on the sort of a newer element, or at least, I’m hearing it all over. So it’s popping up, and certainly can die called research, which was done during COVID. I underscore this, but this whole notion or concept around making life decisions with a purpose, I think you’re gonna be hearing more and more about that. And based on the good work we see being done by firms like Morgan Stanley, Edward Jones, Franklin Templeton empower. And now Wells Fargo has joined the ranks, consumers, advisors, and firms are all going to win. So it’s very exciting time, lots more work to be done. But it’s great to be part of this industry, as we see things unfold in a very constructive and positive way for clients, advisors and firms.

Matt Nollman: No doubt. I mean, with everything that you said, I’m definitely excited for my future in this industry, and all the things that are to come, especially with all the enhancements that our partners and the people we’re working with are making. So thank you for reiterating all of that. We’re nearing the end, Jack, as we always do. Well, first and foremost, it’s been a pleasure speaking with you again, on this format. I know we spend a lot of time together. But it’s really nice to get in and ask you some questions that maybe we don’t always get into on our other daily meeting. So appreciate that. But as we do on every show, we finished with my favorite question. And I think it’s your favorite question as well. What’s something you do outside of work that you’re particularly excited or passionate about, that people might find interesting or surprising?

Jack Sharry: So I’ve answered this question a few times Matt and I was giving it some thought as to how I might answer differently. So we weren’t so much of a broken record, I’m not so much of a broken record. So here’s what I came up with, which actually is probably as important as anything I might share. So my wife and I just spent a week with our son and his wife and their two children, our grandchildren at our home in Vermont. Talk about what matters to me and my wife, its family, especially our grandchildren. So I suppose there’s nothing interesting or surprising about that. But I was reminded as I took some time away from the day to day of our business to remember what is really important in life and that’s family and seeing what our next generation can become.

Matt Nollman: Really relevant answer for our show topic today, Jack so appreciate that. Really nice, Jack. I’ve really enjoyed our conversation today. For our audience. If you’ve enjoyed this podcast, please rate review, subscribe and or share what we’re doing here at well, tech on deck. We’re available wherever you get your podcasts. Thank you again, Jack. It’s been a real pleasure.

Jack Sharry: Thanks, Matt. This has been a lot of fun as always.