Mollie Colavita: The Blueprint for Modern Advisory Success

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Welcome to Barron's The Way Forward. I'm Greg Bartolis, and my special guest is Molly Kolovita, who's CEO of J.P. Morgan Advisors. She will discuss, among other things, how firms can streamline their practices and scale their businesses without compromising the personalized client experience. Uh, welcome to the podcast, Molly.

Thank you.

So before we jump to the topic, let's talk a little about your past, and I understand that you have advisors in your family.

I do.

Tell, tell us about that.

I do. So I grew up in this business quite literally. My father was a financial advisor. My mother was a client associate and my sister has become a financial advisor. I always say she's the smart one. She took the smart path. I went into leadership. She went into the advisory business.

Is she younger than you or what was the sequence?

She's older. So she's older and smarter.

Well, that's a high bar given I know your background. Tell me about your, your career and your, your current role, which, which occurred just a few months ago, which took place.

So, yeah, sure. So I coming out of school, went into an analyst program and got very lucky early in my career. I was given an opportunity to be part of a business that was newly launched to focus on the ultra high net worth client segment. And that really shaped the better part of my career. So I spent over 25 years helping to build a private wealth business and learned a lot, a ton along the way. And in April of '21, I got a call from a friend about an opportunity at JPMorgan, which I graciously said no thank you to. I was happy where I was. I felt very loyal. I, you know, it was really important work to me, the work that we had done at my prior firm. But when I spent time talking to the woman who runs the business here, I was drawn to all the work being done to build this business. And I felt that for this next chapter, it would be smart for me to take all the things that I've learned and apply it in a way that could be additive at JPMorgan.

Okay.

Yeah.

Tell me a little about what you're doing now in your new role.

So I run, I essentially run the private wealth division for JPMorgan within U.S. Wealth Management. So we've got about 600 advisors across the country. We are the division within which the First Republic advisors have joined. And so we've seen a tremendous amount of transformation in a very short amount of time. It's been very exciting and we feel very confident and excited about the growth of this business.

Let's talk about streamlining practices and AI may enter the conversation or not, but there can be a trade-off where you gain something and lose something in the process. And we hear over and over accurately that wealth management is very much a relationship business. So talk to me about the dynamics of about this.

I've had the privilege of working with the best advisors throughout my career. I mean, so many of them are on your list and even before the advent of AI, the best teams have always been very disciplined in every aspect of their business. And it hasn't, it hasn't diminished the relationship. It's actually amplified it. It's given them the capacity and the time to engage in a more real way with their clients. I actually think it's going to be an accelerant for the advisors who are really good at disciplined planning-based advice and guidance. It's going to give them much more capacity to engage clients in a more personalized way and find new and creative ways to to add value.

And can you give an example or two of how that might happen?

We're already seeing advisors using a lot of the tools that we've introduced so far. It's funny because throughout my career, whenever we've introduced technology, it's very rare that it gets adopted so quickly and with so much, what should I say, without resistance. It hasn't been the case with this. I mean, we launched something called ConnectCoach recently and it was instantly well-received because it's essentially enabling advisors to be much more efficient in terms of how they're leveraging all the resources of the firm. We have a tremendous amount of thought leadership and research and so much intellectual capital, but curating that can be hard and combing through it to make sure that you're pulling the things that are most relevant to your clients, reading through it, synthesizing it, making it now relevant for the client so it becomes actionable. All of those things are aided by AI.

And what does Connect Coach do actually?

Like, what is— Well, think of it like a— well, it's similar. It's similar to other AI frameworks in terms of being able to enter in a question or ask for something, and then it pulls in for you what you've looked— what you're looking for. And then we also have something that's called LLM Suite, which is a large language model suite. And Again, this isn't rocket science, this is just basic, but we're hearing about advisors using it after a client meeting.

They will—

we've got an app. You open the app, you talk to the app, you're dictating all the things that were just covered in this client meeting, and then you're asking it to summarize the material so that you can put it in an email that's appropriate for the client. Another email that's written that's appropriate for the support staff on all the things that need to be done as a result of the meeting that just took place. And then another set of notes that you put into, into whatever system you're required to use to evidence advice. So it's again, another example of just streamlining work that needs to be done that otherwise took hours.

Right. And that would free up advisors to work on the relationships and clients. Exactly.

I think it enables them to tune in differently and to, you know, again, another thing that I have found to be true over the years is that the best advisors listen way more than they do talk and ask great questions. So one of my— I have a lot of favorite advisors, but one of them I remember saying, if I'm spending more than 25% of the time in a meeting talking, I'm failing. I think that there's something about the use of AI that kind of takes some pressure off and enables them to just be more, be more present and ask better questions and dig in a little bit more so than maybe they would have otherwise.

Yeah. So I know you're a big advocate for having advisors thinking and acting like a CEO.

Yes.

And tell me a little about that mind shift, what that entails, and what the potential benefits are when done appropriately.

Okay. So we've been running a series of workshops that are centered on this theme. And it's interesting because we've got practice management consultants, like many firms do, that help facilitate these sessions. And one of the ways to open up the session is to I ask the advisors in the room, how many of you got into this business because you wanted to lead people? The response is crickets. No one raises their hand. They sort of nervously laugh. They're like, no. However, they find themselves leading big businesses, big teams, lots of clients, clients who are very sophisticated. They're leaders in their community. They're often engaged in charitable endeavors. And so they're, they're very much viewed as a leader, but I don't know that they always think of themselves in that way. And so this workshop really centers on honing in on their leadership mindset and how that then impacts the way the team functions and the choices that they make and how they think about the business, both strategically and tactically. And it's been extremely well received. I think it's, you know, giving advisors a chance to just sort of take time away from the business to talk about, you know, to talk with their peer group makes a big difference also. And on a topic that they're not used to.

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Used to talking about. One of the other truths is that everything that's happening in your business is a reflection of something that you have created, enabled, or allowed. And then the question becomes, what do you want to do about it? And it's why you have to take stock in your, your strengths as a leader and what's important to you. What are the principles and values by which you want to lead this business? And then I think it is also important to have a coach that's there to listen and be a sounding board for you. This notion of everything that's happening in your business is a reflection of something that you've created, enabled, or allowed. It also leads to needing to have a sounding board. And if you don't have resources within the firm that you can go to to serve in that capacity, there are certainly plenty of people professionally who do this for a living. I've also found that The best advisors are really smart about building their own network of people. Sometimes it's a very tight-knit group of peers who they have respect and trust in. Others, well, more recently I actually had a, one of my very, very good advisor gave me a piece of advice as I moved into this role. He asked me, who's your personal board of directors? And, and, you know, it's a concept that's not new, but I hadn't thought about it in the context of me stepping into this role. And I asked him, how did you form yours? Who, how did you decide who would be part of that process for you? How do you actually engage them? Do they know they're on your board? But having a place where you can go and sort of download what's going on, having someone listen, even if they don't have all the answers, they're just sort of helping you sort through.

To your question though, when you asked this person, was it recommended to be kind of explicit like, hey, Will you be part of my board of directors in quotes and explaining it, or is it more you just do it without giving it that designation, if you will?

You know, I think it's another, it's a bit of personal style in this, in this, in this example, it happened more organically and it's not, his board is not comprised of people who are only in the financial services industry. It's a very diverse group of people. And there are people who help him both within his profession, but also personally, because again, in this business, The lines blur.

Totally. And I think I love the idea of having people who are not just in the industry because I think we're all guilty of it. And you're in your profession, you're in your little bubble, you talk to your peers, and it's very easy to lose perspective because we don't know what we don't know. Even if you try to be humble about it, it's very valuable often to get a trusted opinion from someone who really understands you And, and you respect their opinion knowing that it's coming from a good place and a neutral, neutral place, if you will. So I think that's really fantastic. And if you have, let's say, 2 or 3 people on your board of directors who are not in the industry, and if they're all saying something similar, yeah, then you probably should put some stock into what they're saying because there's a clear pattern.

Exactly. Yeah. Yeah. I think it just also encourages you to be more curious and less certain. And, you know, you can get in your head and you can also get into an echo chamber and make a lot of assumptions that need to be tested.

What do you see in terms of mistakes where people maybe embrace technology and don't do it well? Where do they make mistakes commonly, maybe in the context of the relationship with clients that heretofore in the past they would do certain things and now they're kind of offloading it to tech, but the clients are seeing a diminution of quality. However that happens, assuming it does, maybe it's just been a net positive. I don't know.

Well, one example that comes to mind, we have a client advisory council and they're extremely insightful. And what they're saying is they want more access, more direct access. They don't want to wait for the advisor to hand them the performance report. They want to pull it up when they want to look at it on their own time. So I think that there was a point in time when people felt that their value was in preparing and handing the material and reviewing the material, but that's not really where clients' minds are. They want to review, they want to consume on their terms and then have a conversation about it with you. So I think getting comfortable with not having everything perfectly scripted and orchestrated and being able to sort of, again, be in the moment and be responsive while at the same time guiding.

Absolutely resonates. I think if you think behaviorally, I'll make up the terms like the YouTube-ification of people seeing what they want when they want. Yeah, we're so conditioned to that. Or it could be online shopping. I want to buy this right now. Exactly. So that behavior is so embedded in how we, we live. So it's not a surprise that this would carry over here. And I think for the people who were like, let's say, the gatekeepers, if you will, who in the past would say, okay, here, here it is, it doesn't— in this context, like, you can be sympathetic to why they might be uneasy with the change, but it's like, no, this is— serve the client, give the client what they want, and make sure that you are useful in other ways. Exactly. Figure out a way to harness your abilities. And that actually, it makes me think of something I did want to ask you about, which was, um, you know, leaning into people's strengths and being realistic in the team dynamic of, oh, this person excels at this, they're most comfortable at that. And, you know, there's the— it's almost like, uh, uh, with a portfolio where you have holistic management, it all fits together in a way. So you— so tell me a little about that, um, how you how you identify strengths and weaknesses and how you can amplify what people excel at while keeping harmony and the integrity and the unique chemistry of a given team.

Yeah, I mean, much of this is done in the practice management consulting engagements. It starts with having advisors take stock in their own leadership style, their own communication style, what motivates them, their vision for their practice, what their aspirations are in terms of growing the business, and then doing the exact same exercise with every member of the team.. And there are a lot of tools that you can use to further diagnose, if you will, or sort of understand human dynamics among the team. And it's amazing to watch people's response to these activities. And there are so many aha moments where you're like, the thing that was annoying you greatly about person A on the team all of a sudden makes sense. And so through that, through these exercises, you're able to say, you know what, here are all the things that need to happen in a given day. We may not have the right people aligned to the right things. Let's make some adjustments in terms of the overall structure of the team. And as we're looking to hire, pay attention to these different attributes and how they're going to play within the team. I think it also helps to then lead into a discussion about roles and responsibilities and being really clear about this. This is the unfun stuff. So again, back to back to this idea of advisors as CEOs.

They love—

the thing that they love about this business is different than the work that needs to be done to help the business really thrive. But once you do the work, you can get back to the things you love. You just have to, you just have to go through and stay really disciplined and on top of the dynamics going on in the team. But once you have clearly defined roles and responsibilities, you give people the chance to run. You give them the room to grow, morale will lift, but it's not one and done. You have to stay on top of it because it's forever evolving.

Yes, exactly. The terrain's always shifting. Personnel, new people join, people leave the company, et cetera. And, and, and to your point, you could have sometimes a short-term change that will improve things, but it's not necessarily the total solution, but you're, you're help addressing it a little bit. And then maybe when you hire someone thereafter, then that might be the total solution. So I think it's clear to your point to have the discipline and to have a direction and identification of what needs to be done. So there's a plan and everyone knows their marching orders.

You're reminding me of another sage advisor who talked about when he retired, he'd been in the business for a really long time. And he said one of the regrets he had was not addressing the people on the team that needed to move on from the team. That's discipline too, and that's hard. And people don't really want to have to always address the conflict. But there are times when you can have someone on a team that is a massive distractor, even if they're great at the functional responsibilities that they've been given. So this is another reason why it's not just about the functions that need to be performed, but the dynamics on the team that need to be cared for, arguably even more so.

100%. Well, I think that sounds like a great place to wrap things up. Thank you so much for joining. It's been a pleasure. Wonderful.

Likewise.

Thank you. My guest was Molly Kolovita. 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.