1 00:00:00,440 --> 00:00:03,640 Speaker 1: Because you're a subscriber to this Bloomberg podcast, we thought 2 00:00:03,680 --> 00:00:06,760 Speaker 1: you'd be interested in a sponsored podcast called The Great 3 00:00:06,840 --> 00:00:11,360 Speaker 1: Client Transfer, produced by Prudential and Bloomberg Media Studios. Here's 4 00:00:11,360 --> 00:00:13,039 Speaker 1: the reason episode. 5 00:00:13,320 --> 00:00:17,160 Speaker 2: Welcome to The Great Client Transfer. If you're a financial advisor, 6 00:00:17,200 --> 00:00:19,720 Speaker 2: I'm sure you've heard about and thought about the Great 7 00:00:19,760 --> 00:00:22,800 Speaker 2: Wealth Transfer. This is an inflection point where there's a 8 00:00:22,880 --> 00:00:27,360 Speaker 2: huge opportunity to try to solidify a new generation of clients. However, 9 00:00:27,600 --> 00:00:30,080 Speaker 2: when the money moves, there's a very good chance your 10 00:00:30,120 --> 00:00:34,199 Speaker 2: clients will move to Demonstrating true understanding of how this 11 00:00:34,280 --> 00:00:38,199 Speaker 2: new generation thinks about wealth and retirement will be essential. 12 00:00:38,720 --> 00:00:41,720 Speaker 2: Today we'll discuss the data behind the wealth transfer and 13 00:00:41,760 --> 00:00:44,560 Speaker 2: how financial advisors can make the most of this moment. 14 00:00:47,640 --> 00:00:50,680 Speaker 2: I'm Maggie Lake, a financial journalist, and I've heard experts 15 00:00:50,720 --> 00:00:53,720 Speaker 2: opine on this issue for years, but today I want 16 00:00:53,720 --> 00:00:57,120 Speaker 2: to boil it down to some hard facts and actionable ideas. 17 00:00:57,440 --> 00:01:00,360 Speaker 2: To do that, I've put together a fantastic panel. We 18 00:01:00,440 --> 00:01:03,960 Speaker 2: have Chelsea Ransom Cooper, a financial advisor with Zenith Wealth 19 00:01:04,000 --> 00:01:08,039 Speaker 2: Partners who's actively working to retain current clients and attract 20 00:01:08,120 --> 00:01:12,360 Speaker 2: new ones. Britney Castro, a financial planner will offer a 21 00:01:12,440 --> 00:01:16,640 Speaker 2: behavioral finance perspective for our conversation. She's here to decode 22 00:01:16,640 --> 00:01:19,679 Speaker 2: the why behind a lot of client actions we've been seeing. 23 00:01:20,240 --> 00:01:23,360 Speaker 2: And we have David Blanchette, the head of Retirement Research 24 00:01:23,640 --> 00:01:31,800 Speaker 2: for Prudential Financial and portfolio manager at PGIM. So welcome everybody. 25 00:01:31,840 --> 00:01:33,679 Speaker 2: It's wonderful to have you here in person. 26 00:01:33,959 --> 00:01:34,920 Speaker 3: Thank you for having us. 27 00:01:34,959 --> 00:01:37,319 Speaker 4: Yeah, great to be here. This is a really important topic. 28 00:01:37,360 --> 00:01:38,800 Speaker 2: So I think we're going to have some fun and 29 00:01:38,800 --> 00:01:42,240 Speaker 2: hopefully give some people some stuff to learn about. David, 30 00:01:42,400 --> 00:01:45,839 Speaker 2: Prudential has done a lot of research on this great 31 00:01:46,040 --> 00:01:47,240 Speaker 2: wealth transfer. 32 00:01:47,800 --> 00:01:48,880 Speaker 4: What's the research telling you? 33 00:01:49,160 --> 00:01:51,200 Speaker 5: I mean it's a really big number, right according to 34 00:01:51,200 --> 00:01:54,960 Speaker 5: our Serulei report, over one hundred trillion dollars it's estimated 35 00:01:55,000 --> 00:01:57,720 Speaker 5: to be transferred to generations in the next twenty five years. 36 00:01:57,800 --> 00:02:00,080 Speaker 5: So I mean we're talking about just this tremendou and 37 00:02:00,120 --> 00:02:02,720 Speaker 5: this you know, opportunity in this risk. Because if you 38 00:02:02,800 --> 00:02:04,760 Speaker 5: look at at people when they're asked like are you 39 00:02:04,800 --> 00:02:07,880 Speaker 5: going to stick with your parents' advisor? Only about nineteen 40 00:02:07,960 --> 00:02:10,800 Speaker 5: ish percent say they're going to stay with their advisor, 41 00:02:11,040 --> 00:02:12,040 Speaker 5: you know, going forward. 42 00:02:12,080 --> 00:02:12,919 Speaker 1: So I think that what this. 43 00:02:12,960 --> 00:02:15,359 Speaker 5: Creates is just is just this question, like, how are 44 00:02:15,360 --> 00:02:19,079 Speaker 5: you preparing as an advisor to meet this new possible demand. 45 00:02:19,680 --> 00:02:23,160 Speaker 2: That's a shockingly low number. I think I was not 46 00:02:23,320 --> 00:02:27,119 Speaker 2: expecting to hear that. Brittany, you focus on the behavioral 47 00:02:27,160 --> 00:02:30,680 Speaker 2: part of finance. Why why is that number so low? 48 00:02:30,760 --> 00:02:33,519 Speaker 2: Why do people feel like they have to make a change. 49 00:02:33,600 --> 00:02:36,600 Speaker 6: Well, I think for so long they feel unheard or 50 00:02:36,680 --> 00:02:40,399 Speaker 6: unseen by the financial advisor, Especially in this scenario where 51 00:02:40,400 --> 00:02:43,600 Speaker 6: it's the next generation, they probably are looking at that 52 00:02:43,680 --> 00:02:47,200 Speaker 6: advisor as like no offense, but old dinosaur, Like they're 53 00:02:47,240 --> 00:02:49,440 Speaker 6: not talking to me in a way that makes sense. 54 00:02:49,560 --> 00:02:52,440 Speaker 6: They're not like relating to me where I'm at with 55 00:02:52,520 --> 00:02:56,800 Speaker 6: my goals, with my different lifestyle. I mean, planning is 56 00:02:56,840 --> 00:03:00,440 Speaker 6: a lot different for millennials and younger than it is 57 00:03:00,480 --> 00:03:04,760 Speaker 6: for the baby boomer generation. So if they're feeling unheard, unseen, 58 00:03:04,919 --> 00:03:08,200 Speaker 6: uncomfortable asking questions of the person that they're supposed to 59 00:03:08,280 --> 00:03:11,120 Speaker 6: hire as their professional, of course they're going to leave 60 00:03:11,639 --> 00:03:14,560 Speaker 6: and find somebody who is more relatable, who can help 61 00:03:14,600 --> 00:03:17,600 Speaker 6: them where they're at, help them feel empowered, not feel 62 00:03:17,600 --> 00:03:19,840 Speaker 6: bad about the decisions they've been making with their money 63 00:03:19,880 --> 00:03:21,000 Speaker 6: up into that point. 64 00:03:21,200 --> 00:03:24,160 Speaker 2: And I find it surprising because there is it's a 65 00:03:24,200 --> 00:03:26,360 Speaker 2: big important thing. It can be stressful, So you would 66 00:03:26,360 --> 00:03:28,840 Speaker 2: think continuity would be the easy path, the path of 67 00:03:28,919 --> 00:03:31,800 Speaker 2: least resistance, But they're blowing it up and saying, I 68 00:03:31,840 --> 00:03:33,600 Speaker 2: want something different, I want to find a change. 69 00:03:33,840 --> 00:03:34,640 Speaker 4: Are you seeing that? 70 00:03:34,960 --> 00:03:37,000 Speaker 3: Absolutely, I'm seeing it with a lot of the clients 71 00:03:37,000 --> 00:03:39,440 Speaker 3: that are even coming to us right now. So I 72 00:03:39,520 --> 00:03:42,800 Speaker 3: worked with a family who was going through the similar situation, 73 00:03:43,480 --> 00:03:46,240 Speaker 3: and as they were planning for their wealth transfer to 74 00:03:46,240 --> 00:03:50,320 Speaker 3: their children, the children met that advisor and when they 75 00:03:50,320 --> 00:03:51,880 Speaker 3: walked out of that meeting, they're like, this is not 76 00:03:51,960 --> 00:03:54,320 Speaker 3: our guy, this is not our person. It felt like 77 00:03:54,360 --> 00:03:57,200 Speaker 3: a dinosaur to Britney's point, and they wanted somebody that 78 00:03:57,240 --> 00:03:59,200 Speaker 3: could actually understand where they were coming from based on 79 00:03:59,240 --> 00:04:02,040 Speaker 3: where they were in their life as millennials. So I 80 00:04:02,040 --> 00:04:04,160 Speaker 3: think that's the element where they decided to look for 81 00:04:04,240 --> 00:04:06,840 Speaker 3: somebody on their own and then start to have family 82 00:04:06,840 --> 00:04:11,360 Speaker 3: conversations with this newer advisor akame instead of that traditional advisor. 83 00:04:11,680 --> 00:04:14,600 Speaker 2: This has to be a tough statistic for some to hear, 84 00:04:14,720 --> 00:04:17,599 Speaker 2: because I certainly know when I talk to people who 85 00:04:17,640 --> 00:04:22,400 Speaker 2: work so hard trying to grow their net assets and 86 00:04:22,880 --> 00:04:26,400 Speaker 2: have something to leave for the next generation. They've worked 87 00:04:26,440 --> 00:04:29,320 Speaker 2: so hard, they want to protect their life's work and 88 00:04:29,360 --> 00:04:31,599 Speaker 2: they want to make sure that it is able to 89 00:04:31,640 --> 00:04:34,560 Speaker 2: transfer in a seamless way. But now we hear this, 90 00:04:34,640 --> 00:04:36,279 Speaker 2: there's this big disruption. 91 00:04:36,720 --> 00:04:38,360 Speaker 5: So I think that for better for us, A lot 92 00:04:38,360 --> 00:04:41,560 Speaker 5: of times we're talking about about portfolios and financial advising. 93 00:04:41,839 --> 00:04:45,000 Speaker 5: We're not focusing on household or focusing on individuals and 94 00:04:45,640 --> 00:04:48,560 Speaker 5: perceptions of what matters really differ across men and women. 95 00:04:48,600 --> 00:04:51,479 Speaker 5: I think women are much more interested in things like protection. 96 00:04:51,800 --> 00:04:53,600 Speaker 5: But if you look at at surveys out there, there's 97 00:04:53,640 --> 00:04:56,480 Speaker 5: these huge gaps that exist in terms of what advisors 98 00:04:56,560 --> 00:04:59,440 Speaker 5: think they're doing for their clients and what people actually report. 99 00:05:00,040 --> 00:05:02,159 Speaker 5: Ording to an Alliance for Lifetime in Come peerp study, 100 00:05:02,279 --> 00:05:04,919 Speaker 5: sixty two percent advisors think they're talking about protecting with 101 00:05:04,920 --> 00:05:07,520 Speaker 5: their clients. Only twenty seven percent do. And so I 102 00:05:07,560 --> 00:05:09,920 Speaker 5: think I think it requires being intentional understanding, like where 103 00:05:09,920 --> 00:05:11,599 Speaker 5: your strength and weaknesses are, because if you if you 104 00:05:11,600 --> 00:05:14,080 Speaker 5: don't have a plan how to how to engage you know, 105 00:05:14,200 --> 00:05:16,440 Speaker 5: the spouse, the next generation, like you're going to be 106 00:05:16,480 --> 00:05:18,400 Speaker 5: part of that eighty percent, not the twenty percent, and. 107 00:05:18,400 --> 00:05:20,400 Speaker 6: I've heard it so many times in my career where 108 00:05:20,440 --> 00:05:23,799 Speaker 6: women would leave the financial advisor after the husband died 109 00:05:23,920 --> 00:05:27,599 Speaker 6: or passed away because they didn't feel seen or heard 110 00:05:27,720 --> 00:05:31,360 Speaker 6: that entire relationship. And so while the advisor thought it 111 00:05:31,400 --> 00:05:35,200 Speaker 6: was a successful relationship, the client immediately when she had 112 00:05:35,200 --> 00:05:36,239 Speaker 6: the chance, she left. 113 00:05:36,520 --> 00:05:38,920 Speaker 2: Chelsea, this is interesting because you're in, you're on the 114 00:05:38,920 --> 00:05:41,719 Speaker 2: front line on this. Is it that the advisors are 115 00:05:41,720 --> 00:05:45,839 Speaker 2: not talking about it or that the clients aren't hearing 116 00:05:45,920 --> 00:05:47,000 Speaker 2: everything they're saying. 117 00:05:47,200 --> 00:05:49,160 Speaker 3: I think it's a bit of both, because I think 118 00:05:49,160 --> 00:05:52,000 Speaker 3: as advisors were taught away on how to deliver advice 119 00:05:52,279 --> 00:05:54,799 Speaker 3: and how to have conversations with individuals to make sure 120 00:05:55,080 --> 00:05:57,280 Speaker 3: that we're you know, dotting all our eyes and crossing 121 00:05:57,320 --> 00:05:59,640 Speaker 3: our t's when it comes to retirement planning, estate planning 122 00:05:59,680 --> 00:06:03,320 Speaker 3: and protect But if they're not receiving it because they 123 00:06:03,320 --> 00:06:06,360 Speaker 3: are just not prepared for that conversation or they're not ready, well, 124 00:06:06,360 --> 00:06:08,280 Speaker 3: then we're missing each other. And I think that's something 125 00:06:08,320 --> 00:06:10,919 Speaker 3: pretty common where we're doing something because we know this 126 00:06:11,000 --> 00:06:13,719 Speaker 3: is important to have this conversation, but maybe they're not 127 00:06:13,800 --> 00:06:15,040 Speaker 3: ready to receive it yet. 128 00:06:15,120 --> 00:06:17,840 Speaker 6: It's a huge problem, and I think for financial advisors 129 00:06:17,880 --> 00:06:20,479 Speaker 6: when they start to realize the value that they bring 130 00:06:20,520 --> 00:06:25,000 Speaker 6: to clients is more about helping that client make decisions, 131 00:06:25,040 --> 00:06:29,400 Speaker 6: helping them feel empowered with their money, excited, confident, versus 132 00:06:29,480 --> 00:06:32,160 Speaker 6: putting the data in front of them. They'll say everything 133 00:06:32,240 --> 00:06:36,120 Speaker 6: in one meeting, go over cash flow, tax planning, retirement planning, 134 00:06:36,120 --> 00:06:38,200 Speaker 6: and stay planning, all of it. But it is so 135 00:06:38,360 --> 00:06:40,960 Speaker 6: much information. And remember, money is emotional. 136 00:06:41,400 --> 00:06:42,240 Speaker 4: So what I. 137 00:06:42,240 --> 00:06:45,520 Speaker 6: Retain in a meeting, even if you've told me everything, 138 00:06:46,040 --> 00:06:50,240 Speaker 6: I'm filtering through my own history, my own emotions, behaviors, 139 00:06:50,360 --> 00:06:52,560 Speaker 6: mindsets with money. So maybe I walk out of that 140 00:06:52,600 --> 00:06:55,039 Speaker 6: meeting only hearing ten percent of what Chelsea told me. 141 00:06:55,480 --> 00:06:59,159 Speaker 6: That's a problem. So what advisors can do to help 142 00:06:59,279 --> 00:07:02,360 Speaker 6: combat that is also just deliver it in short forms. 143 00:07:02,600 --> 00:07:05,480 Speaker 6: So we have to remember that as financial advisors give 144 00:07:05,560 --> 00:07:09,560 Speaker 6: clients information in bite sized pieces, have more meetings, more regularly, 145 00:07:09,640 --> 00:07:12,040 Speaker 6: talk about only one or two things at each meeting. 146 00:07:12,400 --> 00:07:14,600 Speaker 6: That's going to help the client so much more than 147 00:07:14,640 --> 00:07:16,160 Speaker 6: trying to dump everything in one meeting. 148 00:07:16,360 --> 00:07:16,520 Speaker 3: Right. 149 00:07:16,560 --> 00:07:18,400 Speaker 5: So, I mean, I'm an investment guy. I love me 150 00:07:18,440 --> 00:07:22,560 Speaker 5: a good portfolio, but portfolio is one very small component 151 00:07:22,560 --> 00:07:25,400 Speaker 5: of achieving a financial goal. I think what we're seeing 152 00:07:25,480 --> 00:07:29,480 Speaker 5: is this evolution or a profession away from advisors defining 153 00:07:29,520 --> 00:07:33,240 Speaker 5: their value propositions. I build portfolios to I help you 154 00:07:33,240 --> 00:07:36,040 Speaker 5: accomplish your financial goals right, and that's retirement, that's everything, 155 00:07:36,280 --> 00:07:39,239 Speaker 5: And to me, like that should have always been the focus, 156 00:07:39,280 --> 00:07:41,920 Speaker 5: but it hasn't been. And it does require advisors to 157 00:07:41,920 --> 00:07:43,800 Speaker 5: think about how are they going to rise to the 158 00:07:43,840 --> 00:07:44,680 Speaker 5: occasion and do this? 159 00:07:45,040 --> 00:07:47,280 Speaker 4: How do you see that? How do you deal with that? 160 00:07:47,640 --> 00:07:50,520 Speaker 3: I absolutely see it, especially as I'm training the newer 161 00:07:50,520 --> 00:07:53,080 Speaker 3: advisors on our team as well, because there's so much 162 00:07:53,080 --> 00:07:55,360 Speaker 3: pride when you build that financial plan right, and you 163 00:07:55,360 --> 00:07:57,760 Speaker 3: have all your pages and you know all the math works, 164 00:07:57,800 --> 00:08:00,560 Speaker 3: and you show it to them and then is just 165 00:08:00,600 --> 00:08:02,480 Speaker 3: not as excited as you are, And it's like why 166 00:08:02,480 --> 00:08:05,440 Speaker 3: are they not as excited? It's like they're not emotionally 167 00:08:05,440 --> 00:08:07,560 Speaker 3: connected to all of this data you're putting in front 168 00:08:07,560 --> 00:08:09,560 Speaker 3: of them. So you have to find a way to 169 00:08:09,640 --> 00:08:11,920 Speaker 3: tie it to their values and what's important to them. 170 00:08:12,240 --> 00:08:15,680 Speaker 3: But I also encourage advisors to ask two really important questions. 171 00:08:16,000 --> 00:08:18,280 Speaker 3: The first one is what does wealth mean to you? 172 00:08:18,800 --> 00:08:21,200 Speaker 3: So when they talk to a new client and they're 173 00:08:21,240 --> 00:08:25,920 Speaker 3: starting to build that rapport, really understand their relationship with 174 00:08:26,000 --> 00:08:29,200 Speaker 3: money and what wealth truly means to them, but also 175 00:08:29,280 --> 00:08:32,800 Speaker 3: what does financial success look like in having a relationship 176 00:08:32,840 --> 00:08:33,880 Speaker 3: with a financial advisor. 177 00:08:34,000 --> 00:08:36,480 Speaker 6: And I think financial advisors have to be willing to 178 00:08:36,559 --> 00:08:39,160 Speaker 6: go to that place with clients, which is more emotional 179 00:08:39,200 --> 00:08:43,800 Speaker 6: intelligence versus just data. And so even having that open mindset, 180 00:08:43,840 --> 00:08:45,760 Speaker 6: like David's saying, there's things you could do. You can 181 00:08:45,840 --> 00:08:49,320 Speaker 6: learn skills to talk to your clients in a different format, 182 00:08:49,440 --> 00:08:52,800 Speaker 6: like there's financial coaches, or bring in a financial coach 183 00:08:52,840 --> 00:08:55,960 Speaker 6: if you don't know how to have these conversations. But 184 00:08:56,160 --> 00:08:59,640 Speaker 6: being that holistic, you know it's more than just numbers. 185 00:08:59,640 --> 00:09:03,280 Speaker 6: It's the life, it's their dreams, it's their family, it's 186 00:09:03,679 --> 00:09:06,440 Speaker 6: like what they care about most. And like Chelsea was saying, 187 00:09:06,440 --> 00:09:08,320 Speaker 6: and when you connect those two, they're going to be 188 00:09:08,360 --> 00:09:11,040 Speaker 6: so much more motivated to one implement, but then two 189 00:09:11,600 --> 00:09:15,640 Speaker 6: senior praises, and you'll probably get a lot more referrals. 190 00:09:15,280 --> 00:09:17,920 Speaker 4: And that story may be different than the original client. 191 00:09:18,120 --> 00:09:20,559 Speaker 5: We talk about gaps. According to the Alliance for Lifetime 192 00:09:20,600 --> 00:09:24,520 Speaker 5: and Computer Purport, seventy percent advisors say they frequently discuss 193 00:09:24,880 --> 00:09:26,520 Speaker 5: how their clients are going to spend their time and retirement, 194 00:09:26,760 --> 00:09:31,000 Speaker 5: But clients report only twenty nine percent have those conversations, right, So, like, 195 00:09:31,040 --> 00:09:33,760 Speaker 5: I mean, retirement's about a lot more than money. And 196 00:09:33,800 --> 00:09:35,679 Speaker 5: I think if you're not talking about like how you're 197 00:09:35,679 --> 00:09:38,280 Speaker 5: going to fill your time, how you're going to structure 198 00:09:38,320 --> 00:09:42,120 Speaker 5: what you have to maximize that time, you're not doing 199 00:09:42,120 --> 00:09:43,280 Speaker 5: the best job you could. 200 00:09:43,520 --> 00:09:45,360 Speaker 3: And I think it's a hard conversation for a lot 201 00:09:45,400 --> 00:09:47,880 Speaker 3: of individuals to have to really think about that behavioral 202 00:09:47,880 --> 00:09:50,640 Speaker 3: component of what are you going to do, what's in enquirenment, 203 00:09:50,760 --> 00:09:53,400 Speaker 3: and what's next. And I think sometimes clients are so 204 00:09:53,520 --> 00:09:56,280 Speaker 3: eager to work towards that goal where they can get 205 00:09:56,400 --> 00:09:58,280 Speaker 3: out of that nine to five or quit the corporate 206 00:09:58,320 --> 00:10:00,800 Speaker 3: rat race, that they're not actually thinking about what are 207 00:10:00,800 --> 00:10:02,199 Speaker 3: they going to do in that time so they still 208 00:10:02,240 --> 00:10:05,040 Speaker 3: feel fulfilled and all the other elements of their life. 209 00:10:05,320 --> 00:10:07,360 Speaker 3: But I think those are the core pieces that we 210 00:10:07,480 --> 00:10:09,880 Speaker 3: need to focus on to make sure that their values 211 00:10:09,960 --> 00:10:12,760 Speaker 3: are mapped to their financial plan in that roadmap. 212 00:10:13,160 --> 00:10:15,400 Speaker 5: I don't love the word retirement because I think as 213 00:10:15,480 --> 00:10:18,360 Speaker 5: negative baggage. I like the word financial independence. You know, 214 00:10:18,440 --> 00:10:20,600 Speaker 5: like think about if you were to be financial independent, 215 00:10:20,600 --> 00:10:21,960 Speaker 5: like how would you spend your time. Like, I like 216 00:10:22,040 --> 00:10:24,680 Speaker 5: that question more because I just like, maybe it's just me, 217 00:10:24,760 --> 00:10:27,440 Speaker 5: but I have like, like people golfing are going on, 218 00:10:27,840 --> 00:10:30,720 Speaker 5: I don't know that. Imagine when you don't have to work, 219 00:10:30,720 --> 00:10:32,240 Speaker 5: what would you do. I think that's a better way 220 00:10:32,240 --> 00:10:35,240 Speaker 5: to think about the end of life stage versus quote 221 00:10:35,280 --> 00:10:35,960 Speaker 5: unquote retire. 222 00:10:36,200 --> 00:10:38,840 Speaker 6: I think that's also a great point too for financial 223 00:10:38,880 --> 00:10:41,520 Speaker 6: advisors to start to pay attention to the language they're 224 00:10:41,600 --> 00:10:44,360 Speaker 6: using with clients, because I agree, like the next gen 225 00:10:44,480 --> 00:10:48,600 Speaker 6: millennials and below are not thinking about retirement. We're thinking about, well, 226 00:10:48,960 --> 00:10:51,840 Speaker 6: let's find something that we enjoy that we can have 227 00:10:51,920 --> 00:10:56,559 Speaker 6: financial independence. Yes, but even the idea of stopping working 228 00:10:56,800 --> 00:10:58,760 Speaker 6: seems kind of like very odd. 229 00:10:59,160 --> 00:11:01,079 Speaker 3: And that's exactly what a lot of my clients talk 230 00:11:01,080 --> 00:11:03,840 Speaker 3: about because they are first generation wealth builders and the 231 00:11:03,920 --> 00:11:07,000 Speaker 3: term they'll use as a work optional lifestyle where they're 232 00:11:07,000 --> 00:11:09,600 Speaker 3: working for their passion because they choose to and not 233 00:11:09,640 --> 00:11:12,679 Speaker 3: because they feel obligated to. And that's really the number 234 00:11:12,720 --> 00:11:14,839 Speaker 3: that they're working towards, is where they have that piece 235 00:11:14,840 --> 00:11:16,360 Speaker 3: and that flexibility in their life. 236 00:11:20,320 --> 00:11:23,679 Speaker 2: The other thing that Prudentials Research has touched on is 237 00:11:24,160 --> 00:11:25,360 Speaker 2: a confidence gap. 238 00:11:25,679 --> 00:11:26,840 Speaker 4: What do you mean by that? What does that mean? 239 00:11:27,000 --> 00:11:28,160 Speaker 5: Yeah, I mean, you know, you could call it a 240 00:11:28,200 --> 00:11:31,160 Speaker 5: gap or a paradox, but you know, there's this like 241 00:11:31,200 --> 00:11:34,080 Speaker 5: people don't always have the best assessment of where they 242 00:11:34,080 --> 00:11:37,200 Speaker 5: are financially what they should be doing. There are large 243 00:11:37,200 --> 00:11:39,840 Speaker 5: gaps in what you'd call like subjective and objective knowledge 244 00:11:39,840 --> 00:11:42,839 Speaker 5: when it comes to finances. According to the Prudential's latest 245 00:11:42,840 --> 00:11:47,600 Speaker 5: pul survey, about ninety percent of mass affluent Americans think 246 00:11:47,640 --> 00:11:51,080 Speaker 5: that they're on track to cover their essential expenses in retirement, 247 00:11:51,200 --> 00:11:53,920 Speaker 5: but only about forty percent of people have an advisor, 248 00:11:53,960 --> 00:11:56,120 Speaker 5: only about a third of a financial plan. So there's 249 00:11:56,200 --> 00:11:59,080 Speaker 5: kind of this misalignment from where folks think that they're 250 00:11:59,360 --> 00:12:02,280 Speaker 5: in a really good spot, but the data might suggest otherwise. 251 00:12:02,960 --> 00:12:05,199 Speaker 2: Brittany, can you help us make sense of that? How 252 00:12:05,240 --> 00:12:07,800 Speaker 2: can you be confident and have no plan at the 253 00:12:07,840 --> 00:12:10,679 Speaker 2: same time two things seem like they would be polar opposites. 254 00:12:10,840 --> 00:12:12,800 Speaker 6: I think a lot of people have this with their money. 255 00:12:12,920 --> 00:12:15,280 Speaker 6: They might know what to do, they might think they 256 00:12:15,320 --> 00:12:18,640 Speaker 6: know what to do, they might research everything what to do, 257 00:12:18,800 --> 00:12:20,960 Speaker 6: but they don't actually do it. And that is for 258 00:12:21,040 --> 00:12:24,040 Speaker 6: many reasons. I think money, like I said earlier, is 259 00:12:24,080 --> 00:12:26,920 Speaker 6: super emotional for people. So there's a lot of concepts, 260 00:12:26,960 --> 00:12:29,559 Speaker 6: a lot of mindsets, a lot of scripts that we 261 00:12:29,640 --> 00:12:35,040 Speaker 6: inherit from parents, from family, society, school and to really 262 00:12:35,080 --> 00:12:37,840 Speaker 6: get clear that yes, you can have a crystal clear 263 00:12:38,040 --> 00:12:40,959 Speaker 6: plan in place, but that doesn't mean you're actually going 264 00:12:41,040 --> 00:12:44,359 Speaker 6: to implement or behave in that manner with your money. 265 00:12:44,480 --> 00:12:47,719 Speaker 3: So oftentimes when I work with clients, sometimes they'll come 266 00:12:47,720 --> 00:12:49,840 Speaker 3: to us because they feel obligated because this is the 267 00:12:49,880 --> 00:12:52,880 Speaker 3: thing to do. I know I should talk about my finances. 268 00:12:53,160 --> 00:12:55,400 Speaker 3: I know I should have an advisor, But deep in 269 00:12:55,440 --> 00:12:57,480 Speaker 3: their soul, they're really not at that place yet where 270 00:12:57,480 --> 00:13:00,240 Speaker 3: they're ready to do the work or actually engage and 271 00:13:00,280 --> 00:13:03,080 Speaker 3: like taking care of their finances. And that is okay 272 00:13:03,360 --> 00:13:06,120 Speaker 3: that maybe that's not their moment yet, but it's really 273 00:13:06,160 --> 00:13:08,679 Speaker 3: hard to work with somebody if they haven't reached that 274 00:13:08,720 --> 00:13:11,400 Speaker 3: phase and they know what their internal why is. So 275 00:13:11,440 --> 00:13:13,640 Speaker 3: I think there's an element of as advisors, we need 276 00:13:13,679 --> 00:13:15,280 Speaker 3: to do the work to make sure that we're bringing 277 00:13:15,559 --> 00:13:17,840 Speaker 3: the knowledge and the empathy to the table. But I 278 00:13:17,840 --> 00:13:20,600 Speaker 3: think clients also need to internally know their why too, 279 00:13:21,120 --> 00:13:23,960 Speaker 3: of what they're building, why they're building towards these goals, 280 00:13:24,200 --> 00:13:26,280 Speaker 3: so that it can really be a really good partnership. 281 00:13:26,440 --> 00:13:28,320 Speaker 5: You know, I think what we often overlook is that, 282 00:13:28,440 --> 00:13:31,960 Speaker 5: like we've kind of solved inertia for people in accumulation 283 00:13:32,080 --> 00:13:34,160 Speaker 5: right now, we have defaults. You know, we talk about 284 00:13:34,160 --> 00:13:37,640 Speaker 5: behavioral finance, like you know, automatic enrollment, default savings rates, 285 00:13:37,640 --> 00:13:40,320 Speaker 5: you know, targeted funds. All these things make the default 286 00:13:40,320 --> 00:13:43,080 Speaker 5: path easiest. Is you get closer to your retirement, like 287 00:13:43,120 --> 00:13:45,680 Speaker 5: you have to start making decisions, yes, right, And so 288 00:13:45,720 --> 00:13:48,000 Speaker 5: I think like that's where advisors are so viable, because 289 00:13:48,040 --> 00:13:50,280 Speaker 5: like you can't not make decisions or you'll make the 290 00:13:50,280 --> 00:13:52,360 Speaker 5: wrong ones. And so all of a sudden, you know, 291 00:13:52,520 --> 00:13:54,920 Speaker 5: like this this this knowledge gap. Well, like we're kind 292 00:13:54,920 --> 00:13:56,559 Speaker 5: of creating an environment here we don't have to be 293 00:13:56,679 --> 00:14:00,920 Speaker 5: very knowledgeable to build wealth. But then how how do 294 00:14:00,960 --> 00:14:03,280 Speaker 5: you even figure out how to accumulate that? That's an 295 00:14:03,360 --> 00:14:04,400 Speaker 5: entirely different skill set. 296 00:14:04,480 --> 00:14:06,640 Speaker 3: I actually was talking to a client recently where they're 297 00:14:06,640 --> 00:14:09,199 Speaker 3: about two years out from retirement, and just the thought 298 00:14:09,240 --> 00:14:11,360 Speaker 3: of pulling money out of that account where they've worked 299 00:14:11,360 --> 00:14:14,840 Speaker 3: so hard to see it grow every single year, and 300 00:14:14,880 --> 00:14:17,000 Speaker 3: now the element that we are pulling money out so 301 00:14:17,040 --> 00:14:18,880 Speaker 3: that they can live off of it was it was 302 00:14:18,920 --> 00:14:21,480 Speaker 3: a tough conversation. We had to have an in depth 303 00:14:21,520 --> 00:14:24,400 Speaker 3: meeting about like that feeling and why there is so 304 00:14:24,520 --> 00:14:27,160 Speaker 3: much hesitation around this when we had run the plan 305 00:14:27,200 --> 00:14:29,680 Speaker 3: and the analysis that they were okay. So I think 306 00:14:29,720 --> 00:14:31,960 Speaker 3: those are the elements of having somebody in your corner. 307 00:14:32,000 --> 00:14:34,440 Speaker 3: It's just so important the work that we do as advisors. 308 00:14:34,760 --> 00:14:37,000 Speaker 5: They need more help and they often realize. 309 00:14:39,480 --> 00:14:43,120 Speaker 2: So what should financial advisors be thinking about doing next week? 310 00:14:43,480 --> 00:14:46,120 Speaker 2: How can they make the change? What do those changes 311 00:14:46,200 --> 00:14:46,680 Speaker 2: look like? 312 00:14:47,080 --> 00:14:50,200 Speaker 6: One have an open mindset. I think learning is something 313 00:14:50,240 --> 00:14:53,320 Speaker 6: that you have to constantly be willing to do, no 314 00:14:53,320 --> 00:14:55,680 Speaker 6: matter what age you are, and that's just because of 315 00:14:55,760 --> 00:14:58,640 Speaker 6: the world we live in with technology AI, it's constantly 316 00:14:58,720 --> 00:15:01,160 Speaker 6: changing things. So we all have to have that open 317 00:15:01,760 --> 00:15:05,200 Speaker 6: beginner's mindset. And for a financial advisor, if they go 318 00:15:05,320 --> 00:15:07,600 Speaker 6: next week, look at their practice, look at how they're 319 00:15:07,600 --> 00:15:11,720 Speaker 6: communicating currently with their ideal client, tele maybe start to 320 00:15:11,760 --> 00:15:15,680 Speaker 6: identify are there just terminology gaps? Like instead of saying retirement, 321 00:15:15,720 --> 00:15:18,440 Speaker 6: should we start saying financial independence? You know, in our 322 00:15:18,480 --> 00:15:20,680 Speaker 6: marketing and in our meetings with clients. 323 00:15:20,840 --> 00:15:23,680 Speaker 3: I think these are the elements wheref we're missing people consistently, 324 00:15:24,080 --> 00:15:26,880 Speaker 3: they're looking for somebody that is using the same language 325 00:15:26,920 --> 00:15:29,600 Speaker 3: that they're using, but understands the trajectory that they're trying 326 00:15:29,600 --> 00:15:31,360 Speaker 3: to go and can meet them on that path. 327 00:15:31,600 --> 00:15:34,400 Speaker 2: So you have an audience of financial advisors listening. Some 328 00:15:34,480 --> 00:15:36,800 Speaker 2: are earlier in their careers, some have a very well 329 00:15:36,920 --> 00:15:40,240 Speaker 2: established book of business with well healed clients. 330 00:15:40,400 --> 00:15:41,080 Speaker 4: What should they know? 331 00:15:41,760 --> 00:15:41,960 Speaker 6: You know? 332 00:15:42,000 --> 00:15:44,280 Speaker 5: So if you look at its surveys of financial advisors 333 00:15:44,320 --> 00:15:47,000 Speaker 5: in terms of, you know, threats that they perceive or challenges, 334 00:15:47,080 --> 00:15:50,680 Speaker 5: client acquisition is first follow intergenerational transfers, and so they're 335 00:15:50,720 --> 00:15:53,560 Speaker 5: kind of acutely aware that they need to get more 336 00:15:53,600 --> 00:15:55,560 Speaker 5: business and the need to retain the business of GOT. 337 00:15:55,640 --> 00:15:58,280 Speaker 5: If you've built a business doing something for a certain subset, 338 00:15:58,440 --> 00:16:00,400 Speaker 5: I think there's a really good chance that that might 339 00:16:00,440 --> 00:16:02,280 Speaker 5: work for a few more years. But to be long 340 00:16:02,360 --> 00:16:04,320 Speaker 5: term durable, you have to be able to meet with 341 00:16:04,360 --> 00:16:06,160 Speaker 5: the next generation. You got to have different paths to 342 00:16:06,200 --> 00:16:08,920 Speaker 5: offer services. I think that requires like a team model 343 00:16:09,280 --> 00:16:11,080 Speaker 5: and just doing more than what we've seen. And I 344 00:16:11,080 --> 00:16:14,400 Speaker 5: think there's been a really exciting evolution of our industry 345 00:16:14,440 --> 00:16:16,120 Speaker 5: over the last at least two decades in terms of 346 00:16:16,120 --> 00:16:18,920 Speaker 5: being more holistic, more advice. I think that has to continue, 347 00:16:19,480 --> 00:16:21,480 Speaker 5: and it's easier more now than ever given the tools 348 00:16:21,520 --> 00:16:22,440 Speaker 5: we're seen being created. 349 00:16:22,720 --> 00:16:26,480 Speaker 3: Yeah, I heard you say yes absolutically, And I think 350 00:16:26,520 --> 00:16:29,320 Speaker 3: the team based approach is so crucial because we can't 351 00:16:29,360 --> 00:16:31,960 Speaker 3: be everything to everyone and that's naive to assume that, 352 00:16:32,480 --> 00:16:34,600 Speaker 3: but we want to make sure that we're able to 353 00:16:34,640 --> 00:16:36,920 Speaker 3: add the right people on our team to make sure 354 00:16:36,920 --> 00:16:39,800 Speaker 3: that we can connect with different individuals. So I always say, 355 00:16:39,840 --> 00:16:41,800 Speaker 3: you know, trust is earned, and it's not just your 356 00:16:41,840 --> 00:16:44,440 Speaker 3: credentials or the performance you're able to get a client, 357 00:16:44,640 --> 00:16:46,760 Speaker 3: but it's really being there in those moments and having 358 00:16:46,800 --> 00:16:49,360 Speaker 3: people on your team that can connect with other members 359 00:16:49,400 --> 00:16:51,360 Speaker 3: of their family or different groups that you just may 360 00:16:51,360 --> 00:16:52,320 Speaker 3: not be able to connect with. 361 00:16:52,440 --> 00:16:54,120 Speaker 5: I mean, I think it's important to just acknowledge where 362 00:16:54,120 --> 00:16:54,920 Speaker 5: you are on that spectrum. 363 00:16:54,960 --> 00:16:55,080 Speaker 1: Right. 364 00:16:55,080 --> 00:16:56,840 Speaker 5: If you've got a bunch of younger clients, like you 365 00:16:56,840 --> 00:16:59,160 Speaker 5: should be in attack mode, right, you should build the 366 00:16:59,160 --> 00:17:03,160 Speaker 5: infrastructure to engage the next generation to get these clients 367 00:17:03,040 --> 00:17:05,920 Speaker 5: as they gain wealth. If you have an older, larger 368 00:17:05,920 --> 00:17:09,080 Speaker 5: book of business, how are you actively protecting it? What 369 00:17:09,119 --> 00:17:11,639 Speaker 5: are you doing to make connections to the spouses, to 370 00:17:11,640 --> 00:17:13,720 Speaker 5: the next relation to ensure that you know when things 371 00:17:13,760 --> 00:17:16,080 Speaker 5: happen your position actually maintained those. 372 00:17:15,920 --> 00:17:23,320 Speaker 4: Assets to bring it all together. 373 00:17:23,440 --> 00:17:26,720 Speaker 2: The world that financial advisors work in is changing. 374 00:17:26,400 --> 00:17:28,680 Speaker 4: In a couple of key ways. The people who will be. 375 00:17:28,720 --> 00:17:31,719 Speaker 2: Their clients in five years probably aren't their clients today. 376 00:17:32,000 --> 00:17:34,120 Speaker 2: They need to be ready and receptive to this new 377 00:17:34,119 --> 00:17:37,360 Speaker 2: group of investors, and this new cohort wants an advisor 378 00:17:37,359 --> 00:17:41,280 Speaker 2: that's available, empathetic, and adaptable. If that describes you in 379 00:17:41,320 --> 00:17:43,840 Speaker 2: your firm, then you're in good shape moving forward. Thank 380 00:17:43,840 --> 00:17:46,560 Speaker 2: you to David, Brittany and Chelsea for being with me today. 381 00:17:46,960 --> 00:17:50,040 Speaker 2: Thank you to Bloomberg Media Studios and Prudential for producing 382 00:17:50,080 --> 00:17:53,440 Speaker 2: and sponsoring this episode. I'm Maggie Late, Thanks so much 383 00:17:53,440 --> 00:17:56,400 Speaker 2: for joining us.