Lena Haas, Head of Wealth Management Advice and Solutions at Edward Jones, joins us to discuss new client expectations, the demand for holistic advice, the evolution of women and wealth, and much more.

Hi, I’m John.

And I’m Julie.

We’re the hosts of the Hartford Fund’s human -centric investing podcast.

Every other week, we’re talking with inspiring thought leaders to hear their best ideas for how you can transform your relationships with your clients.

Let’s go.

Lena, welcome to the Human Centric Investing podcast. We’re so excited to be here with you today.

Thank you so much for having me.

Lena, you know, we live in a world that seems like the pace of change continues to increase in all facets of life, but as it applies to financial professionals, financial advisors, how do you think expectations of clients are changing and how does that shape the service offerings that we present to our clients?

Well, you’re right, the expectations are changing very fast. So I’ll maybe share three trends that we are observing. First is clients are increasingly expecting holistic advice and planning from their financial advisors. And we’ve seen that even in the last six years, that expectation that need for financial planning increased 79 % from a recent McKinsey study. So like. astounding pace of change. Clients are really looking for somebody who would not just help them pick investments, but partner and guide them throughout their lifetime to make good financial decision. The second thing that we are seeing is an interesting almost sub trend of that, which is, you know, women increasingly are in charge of more and more assets in the households. they are increasingly making more both day -to -day and investing decisions serving as sort of CFOs of their households and yet they too feel particularly not confident in their financial decisions and are really looking for somebody who sees them and their needs and priorities and can help them. And lastly, all of that is happening against the backdrop of what we call the great wealth transfer. So what that means is that over the next decade, about 48 % of Americans expect to get some sort of inheritance from somebody. So if we think about it, sort of givers and receivers, that affects almost every family. And over the next 20 years, 84 trillion is going to be transferred between the silent generation and the baby boomers and the younger generations. And so it’s not just that the client expectations are changing, it’s also who our clients are.

That’s also changing. Those are such interesting points. And maybe we could go back to the first one that you mentioned, Lena, the one around the demand for holistic financial advice. Could you talk a little bit about maybe your observations on why clients are asking for this financial advice and maybe how financial professionals can respond to this and how they really can address those needs of clients?

Yeah, that’s a great question. We did an in -depth study to understand what is it that clients and their families most care about? And it was interesting, regardless of their age, regardless of how much they have in terms of assets, what American adults told us is that fundamentally they care about four areas. We call those four pillars of life. The first one is purpose. What is my purpose in life, in my work, in what I do for the community? What does this mean for me? The second is well -being, both physical and mental well -being and health. Third is family. spending friends with people who bring you joy, family, friends, loved one. And the fourth is financial. And it’s interesting how financial stability and security is the fourth almost like a foundational area because when people are confident in their finances, they’re also more successful in terms of those other three areas. And so our clients are looking for a financial advisor who really takes the time to go through what we call a deep discovery process and really understand, you know, how does the client think about their life, their values, their legacy, and do that not just for the individual, but for an entire family and oftentimes across generations.

You know, Lena, one of the questions I have is about the financial advisors themselves. When we talk about this topic of holistic advice, it pulls in a lot of topics other than just straight investment advice. It can involve taxation, estate planning, even the psychology of retirement and living. And so, when you think about all we ask advisors to do, two things. one, you know, I read a recent study that said that you know, the financial advice profession is rapidly aging at the time that the demand for services is going through the roof. So how does Edward Jones think about future growth in terms of the number of advisors that you’ll have out there? And then how are you preparing advisors to provide this holistic advice?

Yeah, that is such a great question, because we’re in the middle of this now. We see the demand for holistic financial advice increasing, the depth of the conversations, the breadth of services, that is all increasing, but the number of financial advisors in the industry is decreasing, resulting really in an advice gap. the industry will need around 50 ,000 more financial advisors by 2030. What’s interesting also that at Edward Jones, we are responsible for 108 percent of the financial advisor. Thanks for watching! industry growth over the last decade. So 100 day percent, how is that possible, right? So in other areas, other firms, the number of financial advisors shrunk while we really grew. What I am though really heartened to buy is, you know we are observing how financial advisors are thinking about delivering on the need for holistic financial planning and I increasingly see our financial advisors pursuing various designations most notably CFP certified financial planning designation. So at this point we have over 5 000 financial advisors with CFP designation. and that’s increasing almost on a daily basis. So that tells me that financial advisors see how critical it is to deliver holistic financial planning to their clients and they’re investing their time and their energy in partnering with clients that way.

Lina, will this financial planning foundation aid financial professionals in the great wealth transfer trend that you mentioned at the beginning of our conversation? And I guess maybe a tack on question, will you tell us a little bit about what you’ve been observing in that arena as well and how you’re preparing financial professionals to have those conversations with clients? Thanks for watching! regarding maybe their thoughts and philosophies on educating them around their options, around transferring their wealth and how they think about that with their families and their situations? Yeah, Julie, absolutely.

It’s a great question because when we think about the wealth transfer, we’re not just talking about securities or dollars and cents. We asked our clients, how do they think about wealth transfer? And they talk about values that their family has and that the older generation wants to teach younger generation. and they talk about the importance of being aligned around. you know charitable giving or the importance of education or smart financial decisions so that goes right back to the need to holistic financial planning beyond just the focus on you know investing and what we also see is that while the wealth transfer will really touch just about everybody Families are not having these conversations. We are hearing how hard it is. to have the conversation around wealth transfer and how this could be a very emotional topic. And so it’s much easier to sort of procrastinate, but really having thoughtful conversation between parents and children and other family members around wealth transfer could make all the difference between the legacy of just pure love or the legacy of... pain and confusion. And so it’s so important to have the wealth stock, if you will, before the wealth transfer.

You know, Lena, you were talking to Julie and I previously about some of the research that you’ve done where you describe kind of four different scenarios of how this wealth transfer may take place in the future. Can you share with our listeners a little bit about kind of those different pathways?

Yes, absolutely, because that too is changing, especially if we think about longevity, right? So we all used to talk about wealth transfer in the context of traditional giving. Older adults pass on their wealth to children. But what we see now is that over 60 % of older adults now do what we call giving while living. So that means that rather than passing along a traditional inheritance, older adults support, in real time, their children, their grandchildren, buying family experiences that they all enjoy, or contributing to important priorities such as maybe education for the grandkids, or purchasing of a home. So, um... That is going directly to that priority of, you know, joy from family and friends. The second thing we see is the generational skip. So oftentimes older adults see that, gosh, we have children who are really settled and have successful career. So rather than prioritizing how we help our adult children, we instead want to give to our grandchildren for things like education or paying off debt or future security. And so about a quarter of older adults help their grandchildren and feel like they will be better stewards for their wealth. And then finally, the other side of... or longevity is that, you know, unfortunately, many older adults are living for a longer period of time with health conditions and, you know, have to also finance their, you know, lifestyle for a longer period of time. So, unfortunately, we also see instances with no inheritance. And so, in a situation like that, it’s actually doubly important to have the conversation. because somebody might say, oh, well, you know, no inheritance. What is there to talk about? But I think it’s important to say, well, maybe it’s no inheritance because, you know, the grandparent or the parent had to prioritize their health and expenses and retirement, not because they don’t love and care for the family member.

So interesting. Lena, could we touch on the third theme that you mentioned at the beginning, which is the women and wealth study that you’ve done. And I know that this is something that we as an industry talk about. And I would love to hear what you found in this arena and how you’re educating financial professionals on these discussions and how to help advisors really think about this and connect with women and help them. be great stewards of their wealth as they really are, you know, oftentimes the CFO of their household.

Yes. This topic is really interesting. very near and dear to my heart. So we know that 85 % of all household spending decisions are made by women. And we also know that nearly half of women have sole responsibility for investment decisions in their households. And then another quarter or so share that responsibility. But here is the thing, while we see that, and we know that women are gradually controlling more and more assets, I think at this point, the assets controlled by women amount to GDP of top 10 country. So that is all true, but where little progress has been made is that 50 % of women still really don’t feel confident in their financial future. And women say that, you know, they are balancing so much in their lives. Women, for instance, are much more likely than men to be caregivers, either to their children or to their parents and other family members. And frankly, some are sandwiched between the two and have to provide caregiving support to both younger and older generations. Women are there. really taking care of the family, of multiple priorities, of just about everybody else but themselves. And so what we see is that women really need help getting educated, getting confident, and also creating that time and head space to focus on their future, not that just day to day. And we know that a financial advisor can be particularly helpful in serving as a guide, but also an accountability partner to a woman, making sure that there is a holistic financial plan that builds towards a secure retirement and that takes into account all the different needs wants wishes. of the woman they’re planning with and her family.

You know, I’m going to switch gears on you a little bit because I’m interested in, you know, one of the things that the entire industry has wrestled with, especially post pandemic, is the kind of communication channels, right? I know, look for having worked with Edward Jones and your advisors in the field for many, many years, Edward Jones is just known for that heavy, local, high touch presence. 2020 rolls around, the pandemic rolls in, everything shuts down. for a year or so, right? And then, but we’re still carrying out or expected to carry out these holistic services, if you will, for our clients. Now we get on the other side of the pandemic over the past year or two, and there’s kind of a thaw in terms of, we can see our clients again. How does Edward Jones guide their advisors in terms of navigating virtual in -person is, How do you train? your advisors to think about the optimal service model given the new forms of technology and communication.

Well, you’re right. Edward Jones is known for deep, personal, trusted, and high -touch relationship with our clients. And this did not change during the pandemic at all. In fact, going virtual using Zoom gave us the flexibility to serve our clients even more completely and meet them where they are, literally. So Zoom, for instance, it didn’t replace face -to -face interactions. we see that what it did was replace the traditional phone call, or now financial advisors are able to have this more real -time connection, more face -to -face connections with clients when they’re traveling. But what was really fascinating to me is we also wanted to understand what are trends in terms of younger investors. So we did a study. was what we called on Gen Next of investors, it’s 18 to 34 year olds. And we thought, well, you know, this generation grew up with all sorts of digital devices. Surely they want digital first interaction model. And to my great surprise, what we saw is that, although that generation certainly has grown up with the internet, They value and prioritize meaningful interactions that really contributes to their personal and financial wellness. And so 66 % said that they prefer face -to -face connection with a financial advisor because they really want somebody who they can trust, who they build relationships with over time. and who really sort of sees them and their priorities and values. I thought that was just really fascinating.

It is. It’s kind of a counter to what I think many advisors would even think.

Absolutely. I think you have to be careful not to assume. I think that’s a good lesson for all of us. I’m curious, Lina, what is Edward Jones’s approach to AI? How are you utilizing it? What is your philosophy? Is it a blended approach? I just think it’s so interesting because it’s such a topic that we’re all facing right now. Where to use it? What makes sense? How does it enhance our day -to -day? conversation operations, where does it create efficiencies, et cetera.

That’s such a great question because, you know, we talked about the pace of change. AI is a great example of that. And so we think about two types of AI, artificial intelligence and advisor intelligence. And we really think that it’s the two together. It’s the financial advisor armed with AI who is going to be most effective. Because financial advisor brings that human intelligence, that empathy, the listening for what is said and what goes unsaid, the true understanding of emotions and goals and priorities. Now, at the same time, we at Edward Jones... have this amazing privilege of helping so many clients. We have over half a million interactions between clients and our financial advisors every single week. So for us, AI is an amazing tool to bring all of this knowledge, both transactional and relational to the fingertips of financial advisors when they need it. in the moment of helping clients with their unique situation.

So, Lane, I wanna take a step back to one of the things we talked about earlier, the great wealth transfer. And when we think about, so as I think about the things we’ve already talked about on today’s podcast, we talked about kind of the breadth now of discussions that go on, the multi -generational approach to involving family members in the talk, as you said it, or the family money talk. What’s the role of the financial advisor? I’m sure there are some advisors that say, hey, I’ve never kind of ventured into these waters. When it comes to facilitating or suggesting that a family have a discussion around the distribution or management of the family wealth, what’s the role that you see a financial advisor playing in that scenario?

a really important role. So the vast majority of our clients say that having a financial advisor in this process really, really helps both from the emotional standpoint and sort of tackling the procrastination issue as well as from getting ready with financial plan standpoint. And so there are four roles that comes to mind. One is... Financial advisor can be the organizer and the agenda setter. So, you know, wealth transfer conversations don’t happen very well if family members are ambushed in the middle of a Thanksgiving conversation, right? At a dinner table. Financial advisor can work with a client to prepare in advance, you know, who should participate in the discussion or where can we have a conversation? Maybe their office kind of neutral ground is the base setup. What should be covered in the agenda? How could everybody come prepared with their homework? The second role financial advisors play is that of a coach and an organizer. So financial advisors have a good perspective on, what are all the different facets involved in the conversation? What are different financial professionals? who should be brought in. So maybe having a tax professional at the table or having an attorney at the table or maybe somebody who can provide really that facilitation in terms of family dynamics conversation would really help and financial advisors can bring those different professionals to the table and organize and be the central point of interaction. Thirdly, our financial advisors, of course, have the role of a planner. So it’s engaging the client, engaging the family to develop and implement a full wealth management and inheritance plan. And make sure that, you know, life happens. They review it with clients on a regular basis and see if any of the priorities of family situation has changed. And then finally... the execution of the plan. So, you know, when a loved one passes away... So empowering to know that financial advisor has got the client in terms of the logistics, in terms of the plan, and the client can focus on being there for the family and on their own emotion, and the financial advisor will both execute the steps that have been agreed on in advance, and educate the client and family members. But since you asked me about the, while transferring the role of advisor, I can tell you that the most important role a financial advisor can play is to really impart to their clients. Please don’t procrastinate. Have this discussion with your family. Now it makes so much difference and it’s worth separating the emotions from the financial conversations and. encouraging the family to have that talk.

I could not agree more because I’m sure that many of our listeners have gotten to experience the negative downside of families not having those kind of conversations where confusion, family disruption, and sometimes just inefficient planning comes into play.

And on the flip side, when family members understand the rationale and everything is organized for them, just gratitude, that’s the overwhelming emotion.

Absolutely.

such an important reminder. Lena, I’m curious in your studies and research and experience, you know, a question that I receive very frequently, and I’m sure that you do as well, but would love your guidance on, you know, on how financial professionals should think about or frame in their mind approaching conversations with women. What are some best practices to deepen those relationships and really help make those connections so that they continue to. feel confident and comfortable, you know, having that trusted financial relationship that’s for the long term.

Yeah, and that’s such a great question. What we see is that, first of all, it’s important to understand sort of where a woman client is at. Women still find themselves struggling to catch up. It’s the pay gap plus longevity. So on average, women live longer than men by six years. And, you know, oftentimes women have taken time. away from their careers or maybe have not completely stepped away from their career but stepped back in terms of the amount of effort and compensation when they have children. So lots of contributing factors to women generally being behind when it comes to saving for retirement as an example. The second thing that’s important to understand and I touched on it earlier is that women are often incredibly busy, balancing so many different priorities, particularly women in the sandwich generations who are maybe taking care of both children and elderly parents or relatives, but women in general. And so for financial advisors, it’s important to understand that what women are looking for is somebody who really gets them, guides them. and empowers them to understand their financial picture. Women are looking for somebody also who they can really trust both in terms of the advice that they provide and the transparency when it comes to fees. So all of that is very important. What financial advisors often find most helpful is to have that upfront agreement and the conversation with a woman that, yes, we are going to set up a time regularly to do the planning, to do the reviews, to focus on your future. Not in the day -to -day budgeting, yes, we will do that too, but really on thinking about priorities, needs, wants and wishes, well -being of the whole family. having safe and secure retirement. And I’ll tell you, by the way, a little anecdote. So when financial advisors work with a couple, we oftentimes give them what we call value prioritizer quiz. And so, you know, man and woman take that quiz separately and the quiz asks about, you know, priorities such as what do you value more? paying off debt, or going on vacation, or contributing to a charitable cause, as an example. So, you know, fun questions like that, and as an example, husband, wife, answer those separately. And then they come together with their answers, and financial advisor says like, hey, let’s compare, are we on the same page? And it is oftentimes so, so helpful. to have that conversation. So oftentimes the first time those partners had that detailed conversations and values and financial behaviors. So that’s another really great example of how to engage, you know, woman in the context of, you know, the household and the broader family.

Well, Lena, as you know, the title of our podcast is the Human Centric Investing Podcast. And one of the things that we like our listeners to participate in is to learn a little bit more about our guests. And we have a couple of ways to do that. But the first is just to ask you to share a little bit about outside of your role at Edward Jones in terms of financial planning and many of these topics that we’ve talked about. Can you tell us a little bit about your background? How did you? get interested in the industry, kind of what path did you follow to your current position at Edward Jones? I think our listeners would be very interested to hear that.

Well, thank you for asking me that question. You know, my interest in the industry goes back to, you know, sort of my background, my childhood. I came to this wonderful country together with my parents when I was a teenager. And so with my family and being part of this community of recent immigrants to the US, what I saw is there are a lot of really smart, well -educated. super hard -working people building their lives again from scratch and working towards that American dream. And I also saw, and even in my family, how financial services, industry, wealth management, it’s just tough. It is very, very different. It is confusing. You know, there’s all this terminology, it’s intimidating. my family and so many others could have been impacted so much if only they had somebody who they could trust, who could educate them, who could guide them towards making good financial decisions so that, you know, the money that they just worked so, so hard to earn is working hardest for them and and and having that trusted person having the guidance. could just make so much difference for those families. And so ever since then, this is kind of my purpose of how do we help clients and their families make financial decisions that better their overall lives? And how do we focus on clients in particular who wouldn’t get that help otherwise?

That’s a great story. Thank you for sharing that. Now, if you’re up for it, we would love to move into our tradition on the Human Centric Investing podcast, which is our lightning round question. So this is just quick top of mind answers, again, to get to know you a little bit better as a person. So if you’re willing, we’d love to get the ball rolling.

Sure. Okay. Let’s see what it is.

John, do you want to kick it off?

Sure, absolutely. Lena, are you a morning person or a night owl?

Oh, definitely night owel. In fact, I started drinking coffee when I was in business school because we had study groups at 6 .30 a .m. And so it was the first time in my life that I said, all right, I’m gonna drink this bitter liquid so that I could stay awake for my classmates. On a scale of 1 to 10, how good of a driver are you? Now in my personal opinion, because I’m a safe driver, I’m going to give myself an 8 or a 9. Now, if you ask my teenagers who have the need for speed...

Ha ha ha!

I love it.

Are you a dog person or a cat person or none of the above?

Oh, definitely a dog person. And we have a wonderful puppy clover, mini golden doodle who we love very much.

Aww, what’s your favorite holiday?

I like Thanksgiving a lot. Kind of going back to my previous story, our family came to the US just a couple of days before Thanksgiving. And so for Thanksgiving, we always get together as a family. And it’s almost sort of the, yes, Thanksgiving, the traditional holiday, but also celebrating the start of our journey here as a family.

Wow, that’s awesome.

Oh, that’s very special.

What’s your ideal outdoor temperature? If you could pick any temperature, what’s your favorite?

Low 80s.

Are you a fan of a paper to -do list or a digital to -do list?

Oh gosh, you know, so first of all, I absolutely live by the to -do list, paper or digital. But I’m really trying to switch to digital in general. So I’m gonna aspirationally go with digital.

Perfect.

What is your favorite vacation destination, either in the United States or really anywhere in the world? If you could spend two weeks anywhere around the globe, where would you do it?

Gosh you know I love the beach and so beach destinations are wonderful. Over the recent Christmas break we went to Costa Rica with the family and that was great. So I don’t know if it’s the most favorite destination but it is certainly a lovely one.

Would you rather travel to the past or to the future?

I’d rather travel to the past because books like Macbeth taught us about the dangers of knowing too much about the future. I would learn from the past and live out my purpose in the present and just see what happens.

My last question, Lena, is would you describe yourself as an introvert or an extrovert?

I’m somewhere in the middle. I love spending time with friends I know closely, and I draw a lot of energy from that. I am a little bit less extroverted when it comes to super large crowds and events.

What’s the first concert you went to?

I’m gonna go with Paul Simon.

That’s a good one.

When I was a child, my parents took me.

Excellent. Well, we can’t thank you enough for joining us here today on the Human Centric Investing Podcast. I know I’ve learned so much and thank you for such an engaging conversation.

Thank you so much for having me. It’s been such a pleasure.

Thanks Lena.

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The views and opinions expressed herein are those of the guest who is not affiliated with Hartford funds.