Among the many panels and presentations at the Financial Services Institute’s (FSI) annual OneVoice conference, one panel addressed communications across clients, advisors and teams, and a second one expanded on the topic of leadership. We also sat down with Robert Coppola, Chief Technology Officer at Sanctuary Wealth, who is one of the leads in FSI’s AI Task Force.
AI Regulation
We spoke with Coppola about the current state of AI regulation for financial services, as well as his and the task force’s views, expressed in their December white paper. Calling his service on the task force a “great learning experience,” he said that AI regulation is experiencing a gap at the federal level, with states and even municipalities becoming involved in filling the regulatory gaps.
This leads to regulatory fragmentation, Coppola said, which can cause a “greatest common denominator” approach similar to what happened in data privacy, where fragmented regulation led to Europe’s Global Data Protection Regulation (GDPR) becoming the de facto standard across the U.S.
Coppola said he is concerned about the shape the regulation is taking of “AI regulation for regulation’s sake and not for principles or outcomes.” Focusing on wealth management, he said that rules applying fiduciary and best interest duties to advisors are already in place, and don’t need to be reinvented unless there are new risks. For AI, there are some new risks, but “not to an extreme,” so current regulation should be the default.
He pointed out that the definition of AI can be difficult to pin down, so that in many instances well-meaning regulators in states and municipalities can introduce unintended consequences. He also said that hallucinations of AI are a “feature, not a bug,” so should be managed through better prompting.
Coppola pointed out one regulatory issue in particular that advisors must pay attention to: vendors using AI. Since advisors are responsible for the inputs from their vendors, they must ensure the vendors only use AI in ways they are comfortable with.
Effective Communication
A panel titled “Bridging the Generational Divide: Effective Communication Among Clients, Advisors and Teams” addressed communication between clients and advisors, as well as strategies for multi-generational communications.
Tyler J. De Haan, Director – Advanced Sales at Sammons Financial Group; Jonathan Habbershon, Vice President, Senior Business Consultant at Fidelity Investments; and Kristy Smith, GM Wealth Digital Marketing at Broadridge, joined the panel, which was moderated by Joseph Kuo, CEO of Haven Tower.
Kuo began the panel stating that value in the discussion isn’t communications and engagement itself, but as part of a broader set of solutions to enhance growth. Beginning at “the basics,” he asked De Haan why communications has become both more complex and urgent.
De Haan responded, “Communications is tough.” He explained that all humans have different filters for information and means of communication have multiplied in the past 100 years.
Habbershon added that some see the Great Wealth Transfer as a “gold rush” and seek effective ways to cause parents and heirs to communicate. The new generation has different views of “what should be,” causing the old ways of “finding out from the attorney” to be replaced with open communication. This, in turn, ignites a “powder keg of family dynamics.”
On the question of responding to generational preferred communication styles, Smith said that research shows 80% to 85% of younger generations would like professional financial advice, implying that firms that previously focused on prospects who are high net worth should reach out to these generations on their preferred platforms such as social media.
Addressing what prevents families from talking, Habbershon said people may avoid conversations about mortality. He also said research shows parents often appoint someone with their own communication style as executors, rather than appropriately equipped persons, even within their own families.
De Haan added that 82% of heirs would be open to speaking with their parents’ advisors, but only about a third of advisors actually take advantage of such opportunities.
Responding to Kuo’s question on best solutions for communications, Smith said that clients want personalized communications every month, even every week – a task that can only be completed with help from AI to track important contexts across time through data and analytics that surface them when appropriate. She added that 30% of advisors consider leaving their broker-dealers because of lack of technology.
The Leadership Imperative
WSR’s CEO Larry Roth introduced the final general session of the conference. Titled “The Leadership Imperative: Clarity, Culture and Resilience,” the panel addressed cutting through doubt, sustaining culture and unlocking potential value.
Erinn Ford, Executive Vice President, Advisor Engagement at Osaic, led the panel, which included Dale Brown, President and CEO of the Financial Services Institute; Michael Kim, President and CEO of AssetMark; and Tarah Williams, President and COO of Prospera Financial Services.
Williams said she has benefitted for many years from a life coach who challenged her that it was fine to “be who you are” in the corporate world. “If we all think the same, we only need one of us,” she said.
“One of the things I learned along the way to get better at is hiring people who are smart and capable, and creating an environment where they can thrive,” said Brown.
Kim noted that a key voice in his leadership was his wife, who approached issues with an objective perspective. Brown agreed, saying that his wife caught his “blind spots.”
Ford asked Kim to address the need for succession in the industry and how to meet younger generations where they are. Kim advised, “Don’t judge. Be curious.” He encouraged leaders to understand the perspectives of younger generations and help them understand the value of their teams.
Ford then asked Williams to provide her views on change management. Williams replied that it’s not about perfection, so don’t wait until you have a perfect response to communicate. She also advocated communicating what is not changing to give the team a sense of stability, as well as pointing out why the change is helping them. She said leaders should use advocate groups who not only understand the change but support it in the organization.
Addressing culture, Williams said, “Culture is how employees feel on Sunday night.” She added, “How you treat your employees is how they treat your clients.”
Responding to Ford’s question of mistakes made and lessons learned, Brown said he learned that a toxic person who is also a high performer must be addressed, even to the point of dismissal if needed.
Julius Buchanan, Editor in Chief at Wealth Solutions Report, can be reached at Julius.buchanan@wealthsolutionsreport.com.
