On this week's special episode of the Financial Planning Podcast, Anne Lester explains why the key to connecting with younger clients is the ability to show true empathy.
Lester —
Lester, who spent 20 years as head of retirement solutions for J.P. Morgan, aims to connect with the next generation by trying to walk in their shoes. She points out that very few Americans grew into adults without making plenty of major money mistakes along the way.
As a result, Lester believes advisors who can help the next generation understand that those mistakes are simply stumbles on a longer journey have a better shot at making deep connections that last.
During her conversation with FP Podcast host and lead editorial producer Justin L. Mack, Lester talks about going from "failed opera singer" to industry veteran; how credentials and jargon can push some younger clients away; and why a growing lack of trust in legacy institutions is a problem all financial pros need to confront.
Listen to the new episode — as well as to all future and past episodes — by subscribing to the FP Podcast on
Justin L. Mack (
Good morning, good afternoon, and good evening. Welcome to the Financial Planning Podcast. I'm your host Justin L. Mack, wealthtech reporter with Financial Planning. And it is my pleasure to introduce this week's guest, Anne Lester. Anne, thank you so much for joining us on a special edition of the show this week.
Anne Lester (
Well, thank you so much for having me.
Justin L. Mack (
Absolutely. And Anne is one of those guests where trying to give you a quick overview of what she does is really tough because she's so busy. It might be easier to tell you what she doesn't do. A retirement expert, author, and for our benefit, a featured speaker at this year's INVEST 2023 conference presented by Financial Planning that's going down June 12th and 13th. Anne brings to this week's podcast more than 30 years of industry experience. Most recently, she spent 20 years as head of retirement solutions for J.P. Morgan. With AARP, she co-founded the Aspen Leadership Forum on retirement savings, and in 2020 she was recognized for her extraordinary lifetime contributions to American's economic security with the prestigious Ray Lillywhite Award. So really excited to have Anne on the show, but like I said, even more excited that she's going to share her experience, her insight, and her expertise with the audience at INVEST 2023.
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If you're not aware, and you should be by now, INVEST is going down, like I said, for two days. June 12th and 13th at the Hilton Midtown. Go to
Anne Lester (
Well, when I was growing up I thought I wanted to be an opera singer. So you could see how well that one worked out.
Justin L. Mack (
Very cool.
Anne Lester (
But I was really interested in finance back in the seventies, I guess, or early eighties when I read a novel by a guy named Paul Erdman called
Justin L. Mack (
Awesome. And we've had a lot of interesting starts here on the show. We've had some scientists, some athletes, some other musicians, but the very first opera singer joining us on the financial planning podcast.
Anne Lester (
Well, failed opera singer I guess. But yeah.
Justin L. Mack (
Definitely wanted to get into, of course the topic at hand is INVEST 2023. We're really excited and so glad that you're going to join us for a talk during day one of the conference. Just wanted to go over a quick sneak peek because we don't want to give it all away. But what topic will you be discussing and bringing to the stage this year at INVEST 2023?
Anne Lester (
Well, my talk is really drawn out of the content from the book that I'm going to be publishing early next year, and it's a book aimed at Gen Z and millennials. Helping them understand why it seems so hard to save and invest. And so it's really helping them understand how their brain is wired. I was a terrible saver myself. I struggled to save and pretty much made every bad mistake in the book. And it really wasn't until I started researching and building the J.P. Morgan target date fund smart retirement that I ran for over a decade that I started understanding that it wasn't my fault and it wasn't a moral failure of mine that I kept buying nice shoes or going on vacation instead of saving. And we're all responsible for our own choices, but I think it's really easy for people who are good savers and find money interesting to not understand and empathize with that real struggle that people have.
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And I think younger investors in particular or younger, not investors, more accurately Gen Zs and millennials, in addition to just having the general behavioral wiring that so many people do and what's in front of us is more important than what's going to happen in some distant theoretical future. In addition to that, they've had some pretty dramatic economic things happen to them, and they've come of age in an era where social media I think is contributing to a lack of trust in institutions. So I think my main speech is really to try to help the advisors in the audience kind of open up a window of empathy for all their clients, but particularly the younger ones starting out who probably really are struggling and are of looking stupid and don't have as much trust in institutional partners and their representatives, i.e. financial advisors, than maybe their parents did. So how can they bridge that gap? That's a very long answer to that question, but there you go.
Justin L. Mack (
No, but a great answer. And something you said really, really stuck out and I think it'll hit home for a lot of people. Well, one, whenever you mention Gen Z and millennial investors and that potential client pool, advisors' ears perk up. We know that's important. We want to appeal to that group. That next generation because they are coming and they're learning, they're going through those hard knocks of what it means to save and be financially responsible. But something you said about understanding that those mistakes (are) not your fault. Not trying to take on all that burden of I made a mistake, how can I recover it? It certainly strikes me. When I think about it, I didn't grow up with a ton of money and then I wanted to be a newspaper reporter when I grew up. Spoiler alert, not the most lucrative career, getting into the newspaper business, but I had those same feelings of, oh, I made a mistake. How am I going to recover, taking on all this additional stress while also trying to learn essentially on the job, on how to save and be responsible. Something I would love to ask is just how do you get over that self blame you put on yourself? How do you kind of break those bonds? And say it happens. I can learn from it. That's really tough.
Anne Lester (
I do think that there's sort of a shortcut maybe and then a much longer way, and maybe you have to do both of them. And at the ripe old age that I've achieved, I can see that you kind of have to do both of them. But I think in the short term, and again, this is really what I'm talking about in the book, is just understanding some of the science allows you to accept that it is stronger than you are and then you can start setting up some boundaries. Auto enrollment, auto-escalation, auto saving, defaulting to somebody else … or your financial advisor to help make decisions for you, takes you out of always having to make a choice. And I'd say that's the short answer. So the key is saying, I got to set up some rules for myself, some boundaries, the bumper guards in the bowling alley.
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One of the things I learned in the research for my book is that there's this really interesting intersection between sort of nature and nurture with money. And nature is the wiring we all have and we're all on this spectrum of being more or less good at delaying gratification, being fearful of loss, but that's also overlaid with nurture and what you were taught at home and the experiences that you live through. And some people are the lucky ones where those two things line up well and they don't understand why people struggle with these decisions. They walk by the plate of cookies and go, yeah, whatever. I stop and grab one and then I go, that was really good. I'm going to go have another one. Right? I am wired like that. So I've learned that I really need to set up some pretty firm rules for myself, otherwise I just keep making that mistake. Well, my brain just shortcuts and I jumped there. So I think the short answer is understanding that it's, again, like I said, not your fault that your brain is making you do it. If I know I'm not going to like the outcome from this, whether it's my jeans not fitting or my not having money to pay my rent, what can I do now when I'm not in that moment to take that decision away?
Justin L. Mack (
Definitely. And kind of going back to the topic which you're going to be bringing to the stage at INVEST. That driving (toward) that engagement with younger clients, why is that so important, especially now?
Anne Lester (
I think one of the most important things to do when you're building relationships of trust, and I think that's at the center of any financial advisor's relationship with their client, is to be authentic. And the key to authenticity is vulnerability. And making sure that you make that place a safe space. I've heard from a lot of financial advisors … I think people who are drawn to this field either come from a very traumatic financial background and they've learned the school of hard knocks. So being comfortable opening themselves up, I think, is a great pathway into that. But a second way is to make sure that you ask questions and listen. And I think so many people, and I used to do this all the time, want to establish and sort of credentialize themselves by being the expert and answering questions.
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And I think when someone is feeling sort of shame and fear and sometimes just plain up stupid when they're sitting there thinking I have questions, and you're confronted with an expert, if you haven't already built that environment of trust, you're much more likely to push somebody away then you are to pull them in. And so asking them to tell stories about money, putting it into an emotional, friendly landscape rather than a, let's talk about your expenses. Do you have a budget? Let me talk about why you don't bring in your credit card receipts. I mean, those are all ways to trigger people's fear and flight kind of impulses. And what you want to do is invite them to open up by having a conversation that maybe isn't all about numbers to begin with.
Justin L. Mack (
For sure. And yeah, well said. Something that maybe we don't think about enough is that, especially for we talk about the great wealth transfer, the money that's going to change hands to the next generation. But then I think about, say someone who's young, they're a high earner, but they might be the first in their family to be in a place where they can work with an advisor. And I think that establishing credentials, while from the advisor end, you can say, hey, I want to reassure you that I'm an expert. Look at all I've done. That might be intimidating for that person who's never had this relationship before. Look at this wall of credentials. I don't know if I'm ready to work with this person. I don't know if I can keep up with this person. That's really interesting. I've not thought about that, that the credentials can almost be scary to first timers.
Anne Lester (
Well, it's the credentials combined with the vocabulary. We don't even understand how much jargon we use. We use so much jargon. And I still remember talking to my father who I encouraged to hire a financial advisor. I was like, I am not your financial advisor. This is a bad way to start off a family. I can think of a lot of ways to ruin a relationship with my parents, and this is one of them. <laughs> So I strongly urged them to hire someone. And my dad called me up afterwards. And he's got an MBA. He was a college professor. And he said, Anne, they kept talking about the benchmark. What are they talking about? And he didn't feel comfortable asking the question. And okay, this man is a college professor, he has a PhD. He has an MBA. And he didn't feel comfortable asking that question. And I just think, oh my gosh, what if you're not a college professor with an MBA? And forget if you're from a community that's not typically (served) you're finding yourself in this environment for the first time. You don't have that family background. Like, my gosh, let's not stack the deck against people when they walk in the door. Let's ask questions. Maybe talk less and listen more, I think is one of the keys.
Justin L. Mack (
Awesome. And with that, we're actually going to take a quick break and enjoy a word from our sponsors. But when we return, we'll have more with retirement expert, author and featured INVEST 2023 Speaker Anne Lester. Stay locked. We'll be right back after this break.
And welcome back to the Financial Planning podcast. I'm your host, Justin Mack, and we're diving right back into our conversation this week with featured INVEST 2023 speaker Anne Lester. And Anne, in the beginning, we had a chance to talk about your path into the industry and then the importance of working with younger clients, stuff you're going to break down in the book that is coming next year. I want to mention that because just from what you shared, that's going to be a read I'm going to be picking up, talking about that brain science. And something we're going to get into here in a little bit in the second half of the show.
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But first I want to talk about some of the challenges that come with connecting with younger, next generation clients. What are some of the other challenges that maybe advisors don't even realize that they're facing when time comes to engage with that younger generation, that generation who might have a very different understanding of what it means to work with an advisor because of some of the things they see just online social media. I think about, heck, for better or worse, the show "Succession" is creating an awareness of advisors that might make things difficult. <laughs> There's a lot of outside factors that are coming into that client relationship for the first time, especially with young folks. What are some of the other challenges you see out there?
Anne Lester (
Well, I think the biggest one, and we touched on it briefly earlier, is a lack of trust in institutions. And that lack of trust in our entire society is at an all time high, but I think particularly in Gen Zs and millennials. They've been marketed to since they were born. I think they're far more sophisticated than certainly I was at their age about the economic models behind businesses. And I think they are weirdly very naively trusting in peer networks and what they hear and see from people who present in a very authentic manner on social media. And I do think that one of the great challenges is, again, I keep using the word authenticity, which I actually despise as a word because one of my sons says, ironically, once you can fake authenticity, you can fake anything. And I do think that it is so important to recognize that when people are, and I contribute to the noise myself on social media, on my own social media channels, but there is such a network of hunger for advice and for community from younger audiences where, again, they feel like they can present and be vulnerable and share stories.
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And I think that the thing I find most distressing is when I talk to younger, sort of younger people about why something is trustworthy, they say, well, I trust them because they're not trying to make money off of me. They're not a bank. And I think to myself, well, most people who are on social media and are doing it seriously have an economic motive. And it's clickbait, right? It's getting eyeballs on what they're saying and selling ads, or it's honestly, and we saw this all with the GameStop and the meme stock stuff, it's a little bit of a pump and dump stuff going on. And for some reason, I think audiences for this type of information feel like they understand the game that's being played, and therefore they can understand and trust the advice anyway. It's a very peculiar thing, and I think it's very dangerous.
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And I've had this conversation with many younger investors and consumers of this information, which is, so you're trusting somebody who's trying to make money off of clickbait, kind of gearing you up to do something. It's all in all caps. And rather than a regulated financial services industry where people will lose licenses, pay huge fines and go to jail if they do the wrong thing, help me to understand why you think this is better. So to me, that kind of psychology of trusting peers, and again, it's because of this, I think, genuine feeling of connection with this community. And this just goes back to my point about it, how important it is for advisors to create a space where people feel heard. And I think when people are on social media, they're there because they feel heard, they feel seen, and they feel like there's reciprocity there.
Justin L. Mack (
And then that lack of trust too … and it almost goes back to what you said, authenticity. I see it plenty, and I'm sure you've seen it too. So for example, young folks who are on Reddit and they're getting that peer-to-peer advice or they're trusting folks on TikTok or wherever their platform of choice is. For example, hey, I'm a big Twitch fan, I get it. But for example, you'll see legacy institutions try to make their way over there. Let's go to TikTok. Let's go to Reddit. Let's try and reach out directly. And then you'll see the younger client base say, oh, that's inauthentic. They're only here because, like you said, they're trying to make money off me. They're really just understanding, oh, here's where the young people are. We have some good advice, we should be there too. That's tough because if you show up, you can look like you don't belong in the room. So how do you bridge that gap of being authentic, but also having legacy cache and legacy experience? That's a really tough bridge to cross. I don't know how you do it, but yeah.
Anne Lester (
Millions are being spent for marketing and advertising advice in that space. Hundreds of millions even. But I think that's the trick. It's not just showing up on the platform. It's showing, and this is true in the room with the client too … it's showing up in the room with humility. In the right way, ready to actually engage. And something I've learned, I've been taking lots of classes on how to write books and how to give speeches. And one thing we always keep coming back to when we're struggling with how to communicate something is what do I need my audience to understand? What do I need them to hear? What can I do that's in service to my audience? And I think that's another really key point for advisors. And as I was a fiduciary for years, we're thinking about acting in my client's best interest, but it's more than making, helping them make the right financial decisions or making them on their behalf.
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It's really how do I show up and present information in a way that's about their understanding, not about what I need to tell them. And I think partly because we were so compliance driven, and partly because we have all this stuff we need to share, it often turns into much more about what I need to tell you rather than what I need you to understand. And just that flip in reference point, I think can go a long way to driving the dynamics of a conversation. What do I need you to understand and how can I help you be present so you can hear what I'm saying, so you can understand it, not because I got to tell you.
Justin L. Mack (
Absolutely. And one thing I wanted to talk to you about for sure, and one of my favorite things about this industry is the human aspect of it. The fact that so much of it is driven by so much of what you said today, about how do we understand better, how do we listen better, how do we bridge those gaps? And I'm a huge fan of what I see as a big rising trend in the behavioral finance side, really understanding what makes people tick. As a reporter, I am absolutely obsessed with that. Talking to people, connecting and finding out how to do it better because it changes. And from one generation to the next, the best approach might not be the best approach from the previous and so on and so forth. And something that your panel kind of mentions is talking about the latest brain science to better understand this younger customer segment, this next generation crowd, can you give us a quick sneak peek at some of the insight you'll share with the INVEST crowd when it comes to that brain science and understand a little bit better?
Anne Lester (
And I, we've got 20 minutes, so that can't cover it all for sure, but I do for sure think there's some really important ones. And again, I think we're just continuing to learn more and more about how much what we are doing is driven by this. And I think for younger investors that the single most important sort of behavioral bias to be aware of is present bias and the inability to think long term. And it's just been so well documented. The thing that I think is a little bit new in the way I'm hoping to open up a financial advisor's ability to connect with their own clients is through storytelling and through really helping people through sharing some of my own stories and some stories of people that I've talked to, is really helping them understand and connect in the moment to what it felt like.
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I think, again, the financial services industry has underestimated the importance of storytelling in its ability to convey information and defaults to charts, graphs, numbers, pictures, because we find this intellectually interesting. We want to totally geek out, and we have no conception that It's literally like listening to the Charlie Brown teacher going "wawa wawa." So it's that bridging, the brain science, and we can talk about present bias and penalty of loss functions and the factor waiting that we should put on these things when we're building portfolios won, right? Let's talk about that feeling in your stomach that you have when you open up the credit card bill after you did this thing that you knew you shouldn't have done two weeks ago. And let's bring somebody into that moment and help them connect with it so that when they're talking to their clients, they can say, yeah, I got it.
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I understand, right? It's okay. We're going to make this better. And back to an earlier question, the short-term answer is, let me put up those guardrails. And again, this is one of the places where I think financial advisors can add the most value, which is really sitting down with somebody and helping them figure out the guardrails that they want to live in and help them stick to it. It's an accountability partner, really. But I think the longer term answer, and this is where I guess I still aspire to grow, we're not done yet as human beings, is really to catch yourself in that moment before you put your credit card down and say, I don't need to do that, right? Yes, what do I do afterwards? But also how do I figure out what my triggers are so that when my brain is doing that thing that it does, how do you step in front of that? So I'll be talking again, not necessarily whipping out the latest scientific research, but pointing people to some of that, obviously. But really it's the storytelling aspect that I think is, for me, a really new frontier here. And I think one people can get a lot more comfortable with.
Justin L. Mack (
Absolutely. As a reporter and a writer, you certainly don't have to sell me on the power of storytelling to convey understanding. And that pit in your stomach when you get that credit card bill, there's nothing more real than that to hang a conversation on and a way to learn and grow. So really, really excited to see all you have to share on stage at INVEST this year. And I'm sure the folks in attendance will be able to gain a whole lot from it. And as we head towards the end of this week's podcast, we're now going to transition into something that has become customary here on the show, which is ending with some good vibes. And we've had a chance to talk a lot from your beginnings, how you got into the industry, which was aspiring opera singer to industry veteran, and all the changes in between. How we can connect with the next generation and the importance of listening, as much as we try to share information to take in information, and then use that to create deeper understanding and more human connections. Really cool stuff. So with all that, I have to ask the question I like to ask everybody, what do you love most about your job after all the experiences and the chances you've had a chance to learn and grow and work and connect? What's your favorite thing about this industry and what keeps you coming back?
Anne Lester (
I was thinking about this because you did pre-warn me that you were going to ask me this question. So I was reflecting on it and I thought, well, gosh, do I even have a job anymore? Because I'm on boards and I'm writing a book and I don't know that I don't call it a job anymore, but there's a through line. I was like, well, I should talk about what I used to love when I was at J.P. Morgan, and there's a through line there, which is thinking about outcomes for people and thinking about what I can do to achieve those outcomes. And so when I was an investor at J.P. Morgan with the target date business or the income funds that I helped run, it was all about what are we trying to achieve for that individual, and how do I see the problem from their perspective?
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How do I bring data and analytics to their problem so that what I'm building actually solves that problem? How do I ask the right question to get that answer? And I think I'm doing that now with my book by speaking to audiences like financial advisors. But it's like I said earlier, it's about what do I want my audience to understand? One of my writing teachers talks about … put the audience first. My speaking coach says the same thing. It's the audience first and everything else starts flowing from that. And that's the same thing that I used to do at J.P. Morgan, really. And if I think about it, my husband was in the Army a long time ago, and I think the language has shifted, but he used to talk about "mission, men, self." What am I trying to achieve? What does that mean for my team? And then how do I best accomplish that and how do I take care of myself? But it's really a service orientation, I guess. How do I help people save more money, be better investors? So that's it for me,
Justin L. Mack (
For sure. And it's hard to find better good vibes to go out on than that. So Anne, I just want to thank you again so much for sharing your time and your passion with us this week on the Financial Planning Podcast. Before we head out, I want to remind folks that Anne will be on stage with us at INVEST 2023 when it returns to Hilton Midtown in New York for two days, June 12th and 13th. Go to invest.events for more information. And Anne, while I have you here, what's the best way that people can find you, connect with you, whether it be on social media or anywhere else, and remind us again what we have to look forward to for the new book that's coming next year.
Anne Lester (
Well, thank you. Yeah. My website is annelester.com. You'll find all kinds of information there. Sign up for my newsletter, links to social media, and it'd be great to connect with more people.
Justin L. Mack (
Awesome. Thank you so much again for joining us on the show this weekend.
Anne Lester (
Thank you, Justin.
Justin L. Mack (
All right. Now I want to thank everyone for listening to this week's edition of the Financial Planning Podcast. This episode was produced by Arizent with audio production by Kevin Parise. Special thanks again to our guest, Anne Lester. Featured INVEST 2023 Speaker Anne Lester. Rate us, review us and subscribe to all of our content at