Molly Townsend: Empowering Clients With Financial Literacy | Next Gen

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Welcome to Barron's Advisor, The Way Forward: Next Generation, a special series spotlighting the emerging leaders shaping the future of financial advice. Twice a month, we'll be digging into the strategies, insights, and game-changing moves that will help you take your practice to the next level. My name is Allison Tucci, and today my special guest is Molly Townsend. Molly is a financial advisor at UBS, and today we'll be talking about bridging the financial gap with financial literacy. Thank you for being here today. So previous to your role in wealth management, you had a different role in the financial industry. What was that role? And then what made you want to transition into wealth management?

So I grew up in a family of financial services professionals. I grew up talking about stocks at the dinner table, so I kind of knew that I was always going to be on this path. But originally, Right out of college, I started as an assistant at an options trading firm, which was 2008. It was a very exciting time to be trading volatility, but I quickly learned that I did not want to be sitting behind a screen trading. So I felt like my financial services foundation was a really great segue into wealth management because I wanted to be working with people, helping clients. So I took my kind of financial background into wealth management about 2 years later.

You're a retirement plan specialist, is that correct?

Yes.

Can you explain it a little bit to our listeners?

Sure. Corporate retirement plans are a very different business from the traditional retail private wealth management working with individuals and families because you're dealing with different regulation, Department of Labor stuff. I won't bore you with the details, but companies have different goals than individuals. And companies, of course, want to take full advantage of all their tax benefits that are available to them through corporate retirement plans. They also want to incentivize their employees to be hardworking, to stay on for years and invest in their benefits. They want to provide them education around their retirement benefits and retirement trajectory. Most 401(k) plan participants are not necessarily getting regular education about investments. So that's something that I truly value and one of the reasons why I've become this senior retirement plan specialist at UBS is I've become very passionate about employee education and making that part of each and every relationship that I work with.

Well, it sounds like it's almost a two-sale process. So first you're engaging the corporation and then you're engaging the employees within the corporation to have, you know, increased adoption of potentially their, their retirement plans. I've heard that the defined contribution assets under management has been steadily increasing over the last, I would say, 20 years or so, maybe a little bit of a dip in the past couple of years to about $10 trillion assets under management, which has been a little bit of a shift from defined benefit plans. How would you really explain that change in the industry and how have you seen it kind of flesh out in your client base?

Sure. I think, I mean, a lot of the change happened post the financial crisis. But I think that, you know, there's also state mandates going into place across several states in the U.S. that if they have a certain number of employees, they're mandated to have a retirement plan. So rather than go into the state-mandated plan, seek out a financial advisor that's going to help you launch not just a cookie-cutter plan, but the right plan for the goals that you're trying to achieve as an employer. So yes, that's kind of the sales process for working with the employer. And then on the employee side, Providing solid education and just helping participants understand the power of compounding or, you know, how their money needs to just not get them to retirement, but through retirement, helping participants understand life expectancies, that if you retire at 65 and live to 95, you're going to be living off of this money for 30 years. What's going to be there for you?

So in terms of retirement, there's a lot of money emotion conversations that people are having. And over the next two decades, I really think about the three big cohorts of money emotion that's occurring. The first one is the generational wealth transfer. It's $72 trillion or so, and it's really defined as baby boomers passing away and transitioning their wealth. The second is really around baby boomers actually liquidating their assets. So their private companies, their real estate, they're retiring essentially, and that's about $47 trillion or so. And then the last bucket that people don't really talk about is Generation X saving and investing. That's about $42 trillion as well. It's still quite sizable. I would like to talk to you about each of these different money in motion categories, how you and how your team are really gearing up to service these markets.

Absolutely. We say to most of our clients, there are really 3 ways to accumulate real wealth: inherit it, build it and sell it, right? Have a liquidity event, or earn a lot of money. And so we focus as a team on all 3 of those markets. We have, we at UBS have a family advisory and philanthropy group, for example, that has helped me plan strategic events around catering to the next generation. Events like I did one for my parents' network in Brooklyn that we called Raising Financially Responsible Children, right? This is something that as we think about a generational wealth transfer, a lot of our clients are really interested in, in learning about how to engage the next generation and how to teach them about money. Engaging the next generation is really part of my job on the team, right? I've got senior partners that have been working with multigenerational families for decades and they won't be around forever. So it's important that I establish those relationships with, you know, G2 and G3. So we're absolutely targeting that money in motion. The second you said was liquidity events. One of my partners, Scott Zelniker, built his practice on helping business owners with exit planning from the beginning of how to just even think about whether or not you're ready to actually, actually introducing bankers and getting involved in the financial discussion. So that's absolutely been a target market of ours for decades. And finally, Gen X earning more than ever before, getting into those very high earning years. That's absolutely something that we're focused on. We work with a lot of financial services professionals, you know, hedge fund and private equity professionals that are just earning millions and millions of dollars every year. And understanding that that type of client isn't necessarily going to need the financial literacy piece, but they might need the organizational piece, right? They might be a financial services professional, but that doesn't mean that they've thought about estate planning or life insurance or, utilizing their annual gift tax exemption amount every year to give their money to kids. So having these conversations, I think it's, it's kind of all-encompassing, right? The generational wealth transfer piece also can apply to the high-income earner, also can apply to the business owner.

You're listening to Barron's Advisor, The Way Forward: Next Generation. We're going to take a short break. Stay with us. Model portfolios have evolved from a one-size-fits-all solution. In a recent roundtable conversation, Jeffrey Safe of BlackRock and Alessio DeLongis of Invesco break down what's driving the next model moment, discussing how a deeper level of customization is producing a better alignment with investor goals and creating a practice differentiator for financial advisors. Welcome back to Barron's Advisor: The Way Forward, Next Generation. Let's get back into the conversation. What are the most common blocks that you see when you're talking to your clients about financial conversations? Are they thinking about constraints? Are they thinking about debt? What are those sort of mental blocks that they're having?

You know, I work with a lot of women. Being a female financial advisor, of course, I want to work with more and more women. And one of the things that I tell all of my female clients when they say like, I just don't understand, or this seems like a roadblock, I always use the analogy, you don't have to be a physical therapist or a nutritionist to get in shape, right? You don't have to be a financial expert to understand your wealth. This is a learning process, and you don't have to just watch the news all day long or follow the market day by day to make really sound, good financial decisions. And that you're in the right place if you're seeking advice.

So the retirement plan industry has also been changing a little bit, not just in assets under management, but technology has really shifted it. It's also become more participant-focused. How have you thought about it from a technology perspective?

The adoption of AI our industry is probably behind the curve. But, you know, just understanding the different recordkeepers that offer retirement plans and where their technology rollout, where their focus, you know, building out financial planning software that's at the fingertips of plan participants so that— because I'm not going to get calls from every single one of the participants in one of our plans. But if they've got the tools at their fingertips to be able to do that or a chatbot that can help them even just to figure out what's the difference in my paycheck if I do 8% or 10%. Those are incredible tools that, you know, I rely on the recordkeepers to really roll those out. But I think adoption of AI is a major theme.

And in this industry, I'm sure you have a plethora of client success stories, but to make it more tangible for our listeners, what's a client success story that you're willing to share?

In the retirement plan space, there's just a lot of advice being given to plan sponsors by advisors that might not necessarily be, you know, corporate retirement plan specialists, right? Maybe they have a client that launched a business, and so they launched the business's 401(k) plan too. But you really have to speak this language. And so over the years, we've done a ton of cleanup of plans, of plans with many millions of dollars under management that haven't been operating per their plan document. So I worked on one this year for a tech company that realized that they'd been overmatching per their plan document. Good thing for the employees, but not such a good thing for the employer when they realized it. But we had to be really careful about how we were gonna communicate that change to employees, and they leaned on me a lot to deliver that message. About why this change was coming, why having a clean plan was something that was going to be beneficial to the whole company and to them as employees.

If you had to give a piece of advice or two to a financial advisor maybe struggling to build their book of business organically, what would that advice be?

Think about what you like about your clients that you work with today. And how can you market or attract more people like them? And that might be as simple as asking that person if they have more friends that you could help with, or, you know, reaching out to that client's estate planning attorney or their CPA and making sure that that professional knows what a good job you're doing for their client and see if there's any other clients that you might be able to help with. I also find that working with corporate retirement plans is a really soft way for me to introduce myself to a lot of people. I get a lot of inquiries about working with us as a private wealth management client from our corporate retirement plan participants.

So on that same vein of really talking to this up-and-coming advisor who's newly into the field, what has been your most important developmental exercise that you've done that you would say, yeah, you're brand new, you should probably do this in one way or the other?

Invest in your own education. I would say one thing that I did right from the get-go when I entered the industry was get my CFP. I really felt like that solidified my credibility as a, as a new young person in the industry, that I came to my team with a credential that said, I'm committed to this business. And this is the kind of practice that I want to run.

And now looking forward, what future goal do you have either for yourself, for your business as you're looking in the next couple of years?

Well, of course, I have, you know, certain asset goals and bringing in more clients. I really want to just continue to develop for my team this expertise on generational planning. And engaging the next generation of our existing clients because our client— many of our clients have kids and grandkids that we have not spoken to or that we've just been hearing about over the years. We know what sports they played growing up or we know what college they go to, but we've never, we've never engaged or spoken to them or met them face to face. And so just the opportunities within our own community and our own client base, I think that continuing to grow those relationships is something that I'm very focused on for the next 5 years.

What is your short-term plan to really achieve that 5-year aspiration?

It's a great question. I am— I have a plan that any time one of our clients' kids gets a new job, you know, our clients tell us, oh, they graduated, they're starting their first job. I always reach out to introduce myself and help them with enrollment with their 401(k) plan, right? Making sure that our own clients' kids are taking advantage of these benefits that their employers are offering to them. So that's part of my regular client service routine is making sure that the next generation is prepared for retirement at a minimum, but also planning events, planning events for 2025 to engage women, I'm planning some events around raising financially responsible children, which I talked about earlier. These are the sort of topics that the next generation of, of our clients are really interested in. My plan is that any, any time one of my clients' kids or grandkids turns 5 years old, I'm going to start sending these spend, save, give stickers because I have a 5-year-old and I realized how much he actually grasps about money. Already. Kids as young as like kindergarten, first grade are really starting to pick up on money habits. I took him to the bank with me once to get a cashier's check when we were buying our new car. At the time, he was probably 3 and a half, and he's playing with his cars in the little lobby at the bank. I get the cashier's check, we go home. I say, tell Daddy what we did today. And he said, Mommy took me to the real piggy bank. And I thought, wow, that's a really intuitive way to think about the bank because he knows what a piggy bank is. But then he said, mommy took me to the real piggy bank to get money for our new car. And I was like, wow, that's— this is a 3-and-a-half-year-old realizing that like the piggy bank that's in his room that we put pennies in is the same money that we hold in a bank account where we're, you know, withdrawing checks from. So Kids understanding and financial literacy from a young age, I think is, is an important tool for young parents at least, right? That's my stage of life and it's, I feel, where I can connect with the next generation of our clients.

Are there any other parameters, whether it's with retirement, whether it's with young families that you would like to address or, or close off this podcast with?

I think I'd like to close out By just reiterating the importance for women to get involved in their finances. I read a stat that baby boomer women are going to be the first generation of women where the women are controlling more wealth than the men. And we're living longer. We're going to be inheriting more money and we're earning more money. And so being engaged in and owning your worth is truly a message that I want to take into the rest of my career.

That's fantastic. Thank you so much for joining us today.

Thank you so much for having me.

The production team for Barron's Advisor: The Way Forward: Next Generation is Ellie Ismailidou, Rebecca Bisdale, Paul LeBlanc, Kinga Rojak, Joseph Lesby, and Alexis Moore. Melissa Haggerty is the executive producer. Jenna Mathis is the director of programming for Barron's Advisor Programs. Greg Bartolis is the editor-in-chief of Barron's Wealth and Asset Management Group. We'll be back soon with another episode. Thanks for listening.

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.