Anthea Tjuanakis Cox: Longevity, AI, and Multigenerational Planning

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Welcome to Barron's The Way Forward. I'm Greg Bartolis, and my special guest is Anthea Zuinakis-Cox, who is Managing Director and Head of Financial Planning at Morgan Stanley. Today we'll be discussing multi-generational planning, the implications of increased longevity, and reimagining what retirement looks like. Welcome to the podcast.

Thank you so much. I love this topic. It's fascinating, and I'm happy to be here.

Excellent. Well, I'll say exactly the same thing because I genuinely think this topic is incredibly important and incredibly timely, and there's so many aspects to it to unpack. And I really am interested in doing a deep dive on this. Why don't you first tell me a little bit about yourself, how you got into wealth management and this position, and then we'll dig into the topic?

Yeah. So I always smile when someone asks me that question twofold. I think one, I'm an artist who happens to be on Wall Street, which is a little unusual. So my— I started my career first as an actress on stage when I was like 8, 9, 10, and then I made majored in art history and taught visual art to students in elementary school for, when I first left college. So that's a little bit of an unusual background, but the way I sort of found my way to finance over time in between there, I got an MBA, I worked for a large strategy consulting firm, was that the thing that got me excited about working in education is the thing that motivates me to work in finance, which is working on pillars of equity in society, one of which is educational attainment, another which is money. And so if you first asked me, would I work in finance? I'm like, absolutely not. But actually money really matters to people. And I love working on things that matter. And then in addition to that, I think financial planning, which is what I focus on at the moment, is an intersection in which you can drive meaningful social value to the individual while also amplifying returns for the advisor and for the firm. And I think there are very few places where you have a market-driven solution that derives real value for every constituent in that way, and which why I love working on it.

In financial services, it sometimes is a zero-sum gain. Someone gains at someone else's expenses. But in this context, if the client benefits, the advisor should as well.

Yeah, absolutely. Yeah. And there's data that clearly supports that.

Yeah. Tell me a little more about the work you do and this issue of multigenerational planning and retirements and how it's all being redefined. And it We can dig into it from there.

Yeah. So maybe I start with first with my role. So as the head of financial planning at Morgan Stanley, my job is really to look across a complex ecosystem in order to make sure that we are generating value and activating value. So it's everything from what tools and technology are we building and enhancing, what expertise are we cultivating, what human beings are available and human capital is available to others to use and leverage. And then how do we tell the story in the larger space? And then on top of that, in addition to core coordinating that ecosystem to kind of, you know, optimize the impact. My job is also to think about, hey, well, what is gonna be true in 3, 5, 10 years from now? What do I need to, where do I need to invest so I can, one, protect a competitive advantage because you can't be complacent, but two, where do I believe competitive advantages will be created in the future? And I think that's why this topic is so interesting is because fundamentally, I think the binary notion of retirement, accumulate, retire, decumulate, is becoming obsolete in the face of multiple things. And so how are we thinking about not only how do we educate people, how do we talk to clients differently, and how to actually build tools and analytics that reflect that back?

Yeah, yeah, absolutely. You said not long ago, for the first time in history, by some accounts, half of today's 5-year-olds in developed economies are expected to live well past 100. That shift has profound implications for labor markets, for healthcare systems, and for the way we allocate assets. Talk about that a little, as well as the role of people not choosing to necessarily just have a two-phase retirement that you work, accumulate, and then you retire and decumulate. People might take breaks or sabbaticals earlier, have mini-retirements. And then if you throw in the layer impact on labor for AI, less of an issue for retirees, but more, certainly more so for those in labor force, How do you try to anticipate something that's disruptive and to some extent unpredictable in terms of its impact?

Yeah. So let's start at the first place, which— your first question was what? Because there's a lot in there.

Yeah. The first one I believe was with the long— well, it was all kind of bundled together. It's hard to parse, but yeah, there was the longevity aspect and how do— I mean, we can begin with having to make sure you don't outlive your assets, but then there's multigenerational dimension of having more stakeholders to consider too. Yeah.

Maybe let me take a step back and let me— there are 5 trends that I think are coalescing to make this space so interesting. I think the first one is that there is— that our industry is more complicated. Like it is— there are far more solutions, opportunities. The value proposition of what advice is or what investment strategies are is much broader than it was before. And to the point that The, you know, doing well in portfolio management is becoming— is, and we've been saying this for a while, commoditized. And I think AI just accelerates that trend. Right. So that's one. So one, you have an increased in complexity and a much more expanded value proposition for holistic management of wealth. The second thing that I think is interesting is what you— the point you made, which is people living longer. Well, what does that mean? Well, that actually now means you have 3 active generations making financial decisions concurrently. No longer might you have a single inheritor event that is anticipated that then people will make decisions on in a binary way. And so that is a very different dynamic for families themselves, let alone advisors or firms that are interacting in this space. And then on top of that, to your point, if, if 65 is no longer the twilight of someone's life, but only the halfway point, I do think the notion of career and work is going to evolve.. And we know that particularly to be true because what does the younger generation tell us they value?

Experiences.

Yeah. Right. So the experiential aspect and purpose and value in their lives and balance and all these things, all these things. And it's right. And they, and they're now becoming a more active part of the conversation. Uh, and they are not interested. If you, can you imagine as advisor, if you just turned around to your client and just said, oh, well now you just need to work until you're 85. Right. Could you imagine the expression on their face or what they would say or how they would feel if someone just gave them that as the only option? Yeah. To navigate this future. So we've got to be more thoughtful and we've got to be more expansive. And I think the fourth one that really plays into it is sort of help a potentially more cyclical nature of work and leisure and wealth accumulation and decumulation. So it's more ebbs and flows, you know, whereas a lot of tools kind of have a more linear understanding of how future projections are going to happen, et cetera. So not only do our conversations change, but how do we actually model things differently for people? And then you take all of those things and you wrap them in an AI overlay, and it's just an accelerant of all of these ideas. And I think that's what's making people feel a little overwhelmed is because it feels like it's coming at us so fast. So, but what I, what I, what's also happening is that as it's coming at us so quickly as individuals and as people in this space, AI also expands the toolkit for those that are willing to pay attention. And I think ultimately it— this longevity trend and reality amplifies the value of advice.

Yeah. And are, are you finding that clients are very eager and excited to unpack this, or, or do— to what extent are they— do they find it a little daunting? And I'm sure that advisors can really help out of this because to your point, the complexity just alone on the investment level is pretty extreme given where we were in the past. But if you overlay it with longevity and choosing not to necessarily have a linear career and the cyclical nature of all these things, it's a real many, many, many inputs with the generational and AI overlay. What I mean, are you hearing our clients very eager to unpack all this and tell me some of the things like what you're hearing and what roadblocks or obstacles you're encountering too when dealing with these conversations?

Well, I think at the nucleus of change is fear for most humans and anxiety and stress. I think on the outliers, there's enthusiasm and excitement about the possibilities and what could happen. But then there's a piece of it where it's like, well, I hear all these incredible things. Like I was at a talk where someone said, hey, your kids, you will live longer, but your kids will choose when they pass. What a crazy idea. And just the idea that the speed of AI development in healthcare makes that a not ridiculous thing to say. Like, I don't know if that's gonna be true or when it's gonna happen, but the fact that people are even talking about it. So in some ways it gets exciting and your imagination goes, but underlying it is also fear. Fear of, well, I didn't anticipate that. What if I live long and have a horrible quality of life? It's not about lifespan, about healthspan. Do I want to live forever with a poor quality of life? Yeah. Am I prepared for that? Is the, you know, is the sandwich generation worried about, oh my gosh, how long do I have to take care of my parents? When will there ever be time for me? Right. Or as I mean, I'm a parent. I sit there and think, what jobs are my kids going to do? Do I have to fund them through a PhD before they can enter the workforce? That is not in my financial plan. Right? Yeah. So I think there is excitement, certainly, but I think we have to be honest that change always brings stress and fear, and that's a natural human reaction. And I think some of those we might hear about, but a lot of them are quiet. Yeah. And so I actually think our job is to invite the conversation.

And to really— I mean, it seems like there clearly is not a one-size-fits-all approach here. I mean, especially given all the moving parts, you really have to drill down and be specific to the extent possible with each input and desire of the client. Like they might say, what is non-negotiable? I will not do A, B, and C. I'm flexible at this. This is ideal. So just, I guess, getting a sense of all of the inputs will give you that better outcome ultimately.

Well, I think— and I would expand on that, which is, again, if you think about, let's say, a planning tool which tries to do that holistic holding of people's desires, their needs, what's essential, what's non-essential, and what's an aspiration. I think it puts, for me, it puts a greater emphasis on actually not a single base case, but the importance of the scenarios.

Right. And the likelihood of scenarios, right? Right. The odds, yeah.

For two reasons. One, we actually, in a point of time in which if someone is going to tell me they can predict the future, that actually would reduce a lot of credibility. That's absurd, right?

Yeah, guaranteed 20% a year.

Yeah, exactly. You have no idea what it's going to mean for me as an individual, you know? And so we can't do that. And also, more importantly, there are multiple people at the table, could be multiple generations. And so the ability to reflect back to clients multiple versions of reality, I think that's really important. At Janus Henderson Investors, we believe working together is the way to work better, like combining your portfolio plans and our in-depth strategy Your valued assets and our valuable insights. Your vision and our mission working in harmony to seek the right investment opportunities. Janus Henderson Investors. Investing in a brighter future together. Yeah. From two levels. One indicating that we might not know the future, but we can plan for multiple versions of it. And probably in most of those you'll be okay. And this third one, we will have time if it's trending that direction to change our tactics. I think that dramatically reduces anxiety. And the second thing that I think doesn't happen as well as it should is that the reality is there are probably multiple people at the table who have multiple beliefs on what the future will bring. And if you're only showing one version of reality, someone feels alienated, someone doesn't feel seen, and that is someone who is leaning out of the relationship, not in. Right.

Right. I mean, I, I think that's really fascinating, that dynamic in terms of decision-making, how you could have, you know, multiple generations having to say, and you know, it used to be far simpler. Um, but now like, what if you, you can have diametrically opposed values and opinions? Like a younger one might be like, listen, I want, I insist half my money's in crypto or something.

Yeah.

And someone else might be in, it's like they're at real loggerheads. And how do you reconcile this? How do you make everyone sort of happy so you have a compromise? There's, some of the terrain to navigate, I can imagine, depending on the family, can be a bit challenging.

Totally. Yeah. And you're absolutely right. And like, how do you hold space for one person without negating another person? And that is where that comes back to my previous point on why I think this actually has the opportunity to deepen the value of advice is that there are many subjective truths there. And that is difficult for AI to optimize. Yeah, right. A solver that returns a single value in a single cell is not the same as helping people navigate multiple subjective options. You know, there are multiple right ways of doing this. Yeah. And I think that's where the advisors who lean into that and engage with that and say, yes, and let me reflect that back to you. Right. And let me hold a space for that and let's see how things go. Are going to ultimately— I mean, I think that's actually alpha.

Tell me what are some common roadblocks and things that in this multigenerational planning that advisors might encounter and advice you might have just to generalize in terms of how to bring everyone together at the table and have kind of a—

I mean, I think you hit on it, which is like they do not all value the same things in the same way. And then on top of that, you have generational experience, which is like, let's be honest, you know, me at 22 could not have anticipated the way I would make decisions and value things when I'm 42, let alone 62. 82, whatever it might be. Yeah. Right. So you just have a little bit of life experience diversity, but also fundamental value differences. For example, you know, if you look at kind of myth-busting around AI, some advisors would say research would suggest advisors think, oh, well, the AI, they're not gonna take it that seriously. Well, actually a younger generation see that's digitally native believes that technology is less biased and actually maybe provides better results. Yeah. So how do you address that person who might be coming to the table with that assumption versus the person you've had a relationship with for 20 years? Right, exactly. Right. So what's interesting is the AI that's there to steal your business is also the AI that's there to protect your business. And what I would say there is like, okay, what is your typical value proposition and how do you normally pitch it? Put it in there and ask it to do it for someone who's 40, someone who's 30, and someone who's 20.

Where do you lean into for each generation?

Change my script. What aspect of my of my value proposition do I need to emphasize? Or ask them, be like, or I would, you know, is there anything here that I need to add to be relevant in multiple places? You know? I think the second thing is like for a younger generation, you know, retirement's very far off. How do you make the decision-making about what's relevant in their life right now? That's why I've always said like, don't over-anchor on a milestone that's too far out. That's just one thing. There are multiple things. There's saving for homes, saving for education, wanting to have certain experiences, et cetera. So make sure that you, that you bring in the things that are actually relevant now.

Okay, that makes sense. I want to pivot a little bit to, to some of the things that you see as more inevitable. So we talked about longevity. That's kind of a given. You believe— talked about preparing for slowing economic growth. We have, we have falling birth rates across, you know, many, if not most, industrialized economies. Tell me about that. And in terms of immigration, AI, and, you know, how that all works out or how you think it will.

Those are some big questions, Greg.

Okay. We can just answer a small one.

I don't know if I have like a fully formed opinion on AI and immigration and everything altogether. Yeah. But what I would say in the short term, but typically in the long term, disruptive innovation like AI, we see a couple things. We expand access and we increase market opportunity. So maybe if I take a medium-term— I realize that it can be very disruptive in the short term, but if you think about the medium term, technology and innovation tend to expand access and expand share. Yeah. You know, and so I think, but where is that going to come from? Well, it's usually the people that are currently on the margins. So how are you going to think about your value proposition relative to those that are currently underserved or do not feel served? And that is one thing I would posit to people is like, that's where there's real opportunity for growth. And it could be in this context, the younger people, it could be, you know, more women, it could be underserved communities, or to your point on things like immigration, it could be that we have to be much more responsive to a multi-boundary world. And so how do you need to be able to accommodate families who maybe not for what they want to are living in multiple places at once with multiple dynamics?

Okay. And what are you hearing actually from advisors who are working with these families? I mean, I'm just curious what— yeah, instead of what we want to say, just what's the feedback you're getting?

From a competitive perspective, I think that we're starting to find that people who are only kind of leading with that portfolio management lens, even for very wealthy families who do it really well, are starting to seeing a thinning of their competitive moat, a narrowing of that competitive moat. Yeah. And it's getting more fragile. Yeah. And so when somebody else comes and talks about maybe tax optimization or something else, that client's more vulnerable to leave than they were in the past. Mm-hmm. So that is definitely a trend I'm hearing from advisors and seeing it. The second one is the voices at the table are changing. In multiple ways. Like, one, the spouse that was quiet might be the one who's coming in and challenging the value proposition or the adult child. And what I also like to tell people now, there's a third person at the table, and that's AI. And it can show up in three ways explicitly. Here's my screenshot of the chat I had. This is what I learned implicitly, which is a client all of a sudden sends you a four-paragraph elegantly worded email with 300 questions they had never asked you before. And you're like, Okay. Right. You know, or through influence, which is the people in your circle who are using it to themselves and positing questions that have never come up before. So, you know, I think that those are dynamics that are happening. And if you don't, you know, if you haven't leaned into those other relationships, again, you can have fragility. Or if you use that as an opportunity to yes and, and invite curiosity, and invite people in, you can reinforce your, your value.

Do you know if advisors ever actually will use like ChatGPT or something like in the context of a meeting where everyone's together and in real time they're all kind of looking at the same screen. So it might be a little bit disarming in that way because instead of an advisor or one family member making the case, you're almost bringing in, like you said, AI is another seat at the table and it's like I don't know if that manifested.

Yeah, that's a really interesting idea. I haven't heard someone say, hey, I opened it up and we did it real time. Although I'm not, I'm not saying that hasn't happened.

Yeah.

What I have heard though, and which I think is really interesting, so I was talking to a very successful advisor just the other week and we were talking about pretending they were the client and talking to something like a ChatGPT as if they were the client to anticipate the questions that might show up.

Yeah.

Interesting.

You know, that's a good use case.

Yeah. Yeah. So like, as opposed to being caught off guard, right? You know, another one someone brought up to me is like, have you ChatGPT'd yourself? If a client were to say, hey, how good is so-and-so advisor? What shows up? Because it's going to be way different than a Google search. Yeah. You know, so just not—

and fair or not, the, the optics are the reality in that case often for the client.

Yeah, yeah, yeah, exactly. Exactly. Because also AI isn't— and also if there's something wrong in there, you should know, because again, it doesn't— it's not, it's not 100% accurate. Exactly right. It's just predictive language. So, you know, so I definitely have heard things like that. And, you know, there are situations where AI has been right with like they kind of caught off guard because the AI gave the client the right or the answer they also would have given. But there's also times when it's not wrong, but it's not totally right either. And that seems to be an opportunity where they're like, hey, yes, like a Roth conversion is a relevant, you know, tactic for you. But actually, you know, we would apply it in this way. Right. So they— or even better, also explain to people why we don't do something. So they know that you've considered it, but like, but there's a reason why, you know.

Right. No, I think that's great. Exactly. You have to have that reason not to say, oh, we're against it. But yeah, answer why.

Yeah, yeah, yeah. And the recommendation I sometimes give to folks, it's sometimes much easier to talk to someone about something when it's not them. So if you're curious about how to bring it up with a client, you can talk about a hypothetical client. Yep.

Or so it's not about, you know, or it takes the ego and the emotion out of it.

Yeah, absolutely. Or you could ask somebody, what are your— what are your friends saying? So they don't feel like they're talking about themselves, but via another vehicle they can probably express exactly their concerns or, or interests.

Right, right. Yeah, exactly. I just want to go back to assets for a moment. When we talked about having multiple stakeholders on the same page, And I mentioned crypto as an extreme example of this stereotype. The younger person likes it, older one not. That might potentially be polarizing in some instances, but like, is there something that's more everyone can agree upon? Is kind of like stocks the middle ground? Like in addition to perhaps being the right answer in a certain situation, is there like a common ground asset class or like REITs or like what can help bring about ideal returns but also not ruffle feathers so much to generalize?

Well, to the point I made earlier on like the complexity of our industry has expanded. Also, the options have expanded. So I think there are easier ways to access a wider breadth while delivering the right risk-adjusted return in ways that maybe weren't possible, didn't feel possible before. Yeah, right. I mean, like crypto is a great example like that. For a while ago, you know, some firms like wouldn't even touch it. It is here to stay. And we have opinions on what is an appropriate allocation, what is a range. Like there are, you know, there are, you know, well-thought-through points of view. And I think to your point on things like private markets, alternatives, et cetera, there's a lot greater access. And we have ways of analyzing from a risk-adjusted perspective, like, does that get you to where you need to go? How much risk do you need to take on? So I think it can turn— hopefully it turns a more subjective conversation into an objective conversation when you overlay the information. So you can, to your point, lower the temperature, take the emotion out, and say, is this achieving what we want it to achieve? Let's not worry so much. Like, yes, you can use tactic A. You could also use tactic B. You can also use tactic J. Right. And let's, let me show you all the different things that are implied when we do that.

Right. And how can we beat inflation and ensure we'll be fine with, you know, depending how long we live.

Right. Exactly. Exactly. And that's like, like things like, you know, do you have a more bucketed investment approach because you have younger people there who are like, I don't want everything in like fixed income when, when we're going to, we have 40 years for this to compound, you know. Okay. So how can we bucket our investments? I'm just, you know, using as an example so that, you know, we indicate that we're trying to grow wealth as well as protect it for, for certain parties.

Yeah, yeah, exactly. Are there any other ideas or topics we haven't really touched on that you want to address?

I think one thing that I would say is how to have more open-ended conversations with people. Um, we know that purpose derives measurable outcomes, and so how do you connect your— what you're doing back to the purpose for the client? You know, how do you ask some questions, things like like, you know, how, what about your work gives you energy and what drains your energy? How do we think about, if you're gonna be working longer, what type of work fuels you? That's a way more interesting and like positive question than just telling someone you're gonna be dragging this forward for 10 more years than you thought. Yeah. You know, and so I think, you know, getting to the questions that unlock what is meaningful to people, like if you were to live 20 more years, How would you know those years were well spent? That's an interesting question. And then we can connect it back to the financial decisions that will enable that.

Right. It's starting with the destination you have in mind and kind of reverse engineering the best path to get there.

Right. And to get away from the anxiety of it and be like, well, what would good look like and feel like to you? So I would just put that out there as something to think about. And I think also, people don't want complexity. But they value you coordinating the complexity for them. So you can illustrate that there's complexity there, but I think they want assurance that you're making it elegant for them.

Yeah, absolutely. Well, that seems like very sound advice. So thank you. Thank you so much. It was a real pleasure having you on.

Likewise.

Thank you. My guest was Anthea Zuwenakis Cox. For more podcasts and the latest wealth management news, visit barons.com/advisor. You can also listen to this podcast on iTunes, Spotify, and Amazon. For The Way Forward, I'm Greg Bartalus.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.