Reset Client and Colleague Relationships

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Hi everyone, this is Sterling Shea from Barron's, and thanks for tuning in to another episode of The Way Forward. I'm very excited to have a special guest with us today, Katie Knox, who is President of Bank of America Private Bank and is a member of the Bank of America executive management team. Katie, thanks so much for joining us.

Well, thank you, Sterling, and it's great to be here.

Katie, since the beginning of this series, we've been asked by so many advisors about how they should be thinking about their strategy and client engagement and the changing nature of their clients' lives since the beginning of the COVID crisis. And so much has changed. I know you can lend a lot of perspective to that. I'm eager to get into it, but I also want to hear a little bit about how you've been managing the change in all of this. You need, you lead a large and dynamic team. How have you been shifting the leadership style that you have while working from home? And so far in this, what lessons have you learned to increase connectivity and culture in the virtual environment?

Well, first, I would, I would say how proud I am of the way our company has responded to the pandemic, economic disruption, calls for racial justice. The crisis has made us all really reflect on what's important to us. And the Bank of America, the billion-dollar commitment to address racial equality and economic opportunity really demonstrates how we live our values and who we are as a company. And what I would say is when the pandemic hit in March, our first priority was let's just keep all of our employees safe and healthy, as well as our clients. And our first focus was really that transition to work from home. So within 2 weeks, we had 99% of the private bank working from home. So that obviously meant we all had to change our daily routines. And from a leadership standpoint, the first thing I did was I set up a daily video check-in with my leadership team. So every morning, And at the end of every day, we would get onto our WebEx and just check in. And what I found quickly was the team really needed to think differently about ways to engage their broader team, sharpen their video skills, build up their online presence. So we, we had a lot of work around what can we do to really drive the emotional engagement first of our teams because as you know, great teams lean in when there's a crisis. And so right away we wanted our teams to lean in, engage with their clients in a meaningful way. And I would say in an emotional way, really drive that emotional engagement. And that was hard at first. And then what we see, what I always see with our advisors is they're so resilient and they're relentless. About their clients and the client experience. And our best are always forward-thinking and leverage technology. And so immediately, they found ways to deliver a really high-touch with a high-tech approach. And I would say those were some of the biggest takeaways. And every day, I'm amazed. We're actually hosting about 2,000 virtual client conversations a day across the private bank. And that continues to increase every single day. So great engagement, first with the team, And obviously, you know, always very, very important to find ways to connect with our clients.

Well, I know you have a terrific group of people and some very excellent technology to throw at the problem, but what was the— what were the challenges that you saw arise as your advisors made this pivot to the virtual connectivity? What were the pain points that you learned from in that process?

I would say the new normal. I think initially everybody thought that this would pass quickly and they would be back in the office. So the first challenge was making sure that everybody could work virtually and had the equipment. I chuckle a little bit because one of the biggest challenges were people wanted to print. And so we started to think through, okay, how are we gonna do our work differently? We're gonna be in this work from home mode for a while. And then what we decided to do always host best practice videos every Tuesday and every Friday with our advisors talking to broadly, uh, our entire business about best practices around the use of technology, the use of video, how to connect differently with clients, and then also how to manage in this new normal when we wouldn't be going back into the office. I'd say the other challenge— we're a people business. And our people wanted to be around their team and they wanted to collaborate. And so that's why we had to find ways to bring these small groups together almost on a daily basis and find new ways to collaborate. So I don't know that they were obstacles, but we got through them quickly together. And that was really by leveraging the innovation of our best teams and then opening that dialogue up across the business..

Katie, I'm curious about what you're learning from all of this dialogue that you're having with clients. You say that collectively across the organization, you're having as many as 2,000 client conversations a day. You must be gleaning a lot of information how the client mindset is shifting in really interesting ways. And I'd also like for you to weigh in a bit on how you've watched digital engagement evolve, particularly in regard to making sure you're getting the whole story from your clients and really deeply connecting with them in a meaningful way?

Absolutely. I would say first, you know, we've learned some important things about our clients. For example, we continue to see them embrace our mobile and online platforms. Our digital engagement is at an all-time high. In the private bank, we're at about 80% of our clients are active. And what I would say is our clients clearly see the value of the efficiency and the security of engaging with us digitally. So just at couple of data points. If you think about Erica, which is our AI-driven virtual financial assistant, Erica has helped more than 5 million new clients complete over 75 million requests. And so when you start to think of that growth, that's 100% up year over year. And what we've also learned is on the payment side, if you think about Zelle, where our clients are sending and receiving payments, in the second quarter alone, we had more than 11 million active Zelle users across the Bank of America. And they sent or received 117 million transfers. In the private bank, our use of both Erica and Zelle are up 90%. So our teams learned, again, that you can provide very high touch leveraging high tech and allow your clients to stay active digitally 24/7. So really proud of what we're seeing and how the team has embraced the technology and most importantly, and more importantly, allowed our clients to engage in it in a different way. Your question about what shifted in the way that clients are thinking about wealth or family or legacy, I would say there's absolutely a shift in how clients are thinking about all of the above. We're seeing families use their time together for conversations about how they want to spend the rest of their life, and discussions about legacy have really become more intentional. And more pronounced. And the dialogue has really shifted around priorities. We've always heard about family priorities, but what we're hearing now is that urgency and the priority around the transfer of that wealth between generations and probably most importantly, the transfer of the values and what the family, how the family really looks at that steward of the wealth, but making sure that it's the highest and best purpose. And so your question really aligns well with not only what we're hearing, but the expertise of the, of the team.

That's interesting. I think in many ways what we're all going through now is not creating new trends, but rather an acceleration of trends that were already underway. And it's fascinating to hear about that increased prioritization around wealth transfer. Can you break that down a little bit further? What are some of the specific things that clients are asking advisors about today in regards to that?

I would say a couple of examples. You know, we've really been able to help our families think through trust and estate planning, their philanthropic goals, business succession, liquidity events. And many of our clients just feel a sense of urgency right now to make use of their wealth with tremendous impact. And so they're asking us about how best to support certain organizations on the front line of the virus, or about how to be more effective with their giving overall. And in many cases, they want the information about organizations that are truly making a difference. And I'd say, you know, lastly, we're helping a lot of our families right now set up their family charitable programs such as donor advised fund. And that has been really insightful because we're finding that the family that was always involved, they are involving younger members that are now either in the household or having the dialogue around giving, which is really exciting.

Well, sure. I'm, I would imagine that's a unique opportunity for the advisor to engage with younger generations of client families as well. I mean, I know that it's been a passion be a passion point for your organization to focus on helping families become good stewards of wealth. But the notion that it really applies to the multi-generational approach to that wealth legacy and philanthropy is something that's only accelerated, or that we've heard about accelerating mostly in, in recent years.

Absolutely. And you know, it's, it's been really interesting because parents can show their children the way by involving them early around giving, around the conversation, around volunteering, And the earlier, you know, younger members of the family learn the habit of giving, the easier and more likely it is that it's going to be sustained. And so we see a lot of grandchildren now that have a much clearer understanding of the, the family, be it a foundation, the history and how it evolved and how all the family members have an opportunity to really reflect on their personal and shared values. And so the dialogue is incredible right now and really opening up with tremendous engagement across all levels of the family. And that has been really— that strengthens the family's bond where, you know, we're seeing that across so many of our family members. And we've been so impressed by the work with the foundations and what they've done personally.

Well, it's super important work, but it can be tricky for advisors because often the sense of legacy and giving back and that interpretation of generational family values can be expressed really differently by people of different ages. What advice would you give to advisors based on how you've seen this go between your folks and some of the clients that they're working with on how best to engage families about giving? What are some dos and what are some don'ts that, that make those conversations, that start those conversations for one, and make them as productive as possible?

Well, I would say actively listening and understanding every member of the family and what really drives them personally. So I talked about those shared values, and then there's these personal passions that are really coming to light. And obviously we're seeing tremendous engagement around the pandemic and some of the other opportunities that I mentioned with the healthcare workers. So I would say the advice is really that active listening and don't take anything for granted. Everybody has a voice and they want you to understand what really drives them personally. I would say, you know, if you look at the research and we recently participated in some research about how advisors and clients address giving, the study is really, really clear and it shows that philanthropy can be a path to a meaningful conversation with our clients at all levels and obviously really help drive business. But nearly 50% of our clients said that they would be more likely to select an advisor who is knowledgeable about giving. And 70% of advisors say discussing philanthropy with clients has had a positive impact on their performance. So obviously, you know, really helping them to establish new clients and deepening relationships. So the advice really is Listening to every member of the family, understanding what really drives them, bringing it into the conversation with our expertise so that we can, we can continue to broaden their knowledge.

When we hear about advisors engaging client families around the notion of values and how that imprints on legacy and the approach to investing and giving and all of these things, we hear quite a bit about ESG. Is that something your team is still focused on and an active part of the conversation with the client families that you're having?

Absolutely. On a daily basis. And I have been so inspired by not only the work we're doing as a company, but the work that our clients and families are doing more broadly. There, there's just a deep desire right now to use energy and wealth and resources to make a positive impact on the world. And it's exciting to see the growing influence that so many young, uh, individuals and, and women, in philanthropy are having in terms of economic power and their ability to bring people together and organizations together around a similar mission. So it's really a positive force in the world right now and very, very exciting.

What changes are you seeing in terms of how people are giving today?

I would say there's much more focus on impact and understanding the organization more deeply. So today, many family foundations are setting bold goals goals for impact, the impact that they're giving will have in certain areas. So whether it's education or hunger or homelessness, economic opportunity, addressing the impacts of the pandemic, obviously has, has been a daily dialogue with our clients, fighting racial justice, and really making sure that the donors are making a significant impact and more narrowly focused. Is clearly another trend that we're seeing. So we're, we tend to see family foundations and individuals increasing their impact as it relates to investing, but it's really a complement to their charitable giving. And it's a way to really accelerate the desired outcome that they're looking for and really the desired change.

Katie, on this series, we've been talking a lot about the importance of having a great investment process, proper allocation, portfolio construction, and risk management, and that's super important, but it's also very important that advisors apply emotional intelligence to have deeper, more meaningful connections with client families. Sometimes this can be hard to start, and some advisors can be a little reluctant to do it, but it leads to such important conversations. Uh, how would you respond to that, and what are you seeing in that regard across the advisors that you're working No, absolutely.

I mean, we obviously rely on the tireless work for us of our Chief Investment Office and our global research team to communicate to our clients. And obviously they're best in the business in terms of decoding the market and guiding us around what's around the corner and also providing those actionable insights that we need right now. But your question around emotional intelligence is such an important one because we're finding that the best advisors, especially through this pandemic, have made an emotional connection with their clients deeper than they had before we went into the crisis. And what they're doing, as I mentioned before, it's active listening, understanding if anything has shifted, understanding those priorities, connecting with them at, on a different level depending on where they are with those life priorities that I talked about earlier. So those connections become incredibly important to really forge that trust that we build with, with our clients.

I would imagine also that it's something that requires the input of a team of specialists to really engage these multigenerational families that are around these kind of topics of their impact and legacy giving and the intent and purpose of family foundations. One of the things that we've noticed in this regard is the teams that that the advisors that seem to be having the most success with this have really embraced the team concept. They engage those client families as a team, and often the most successful ones, those teams represent generational diversity themselves and importantly gender diversity as well. Can, can you comment on that? Are you seeing that as well?

I am seeing that as well. And I would say the environment has also created the opportunity to really showcase a team approach to clients. And we're well positioned to talk to them about wealth structuring, custom lending, philanthropy, but really engaging the entire team. And that matters. Our clients really look to us to bring in those members of the team with certain expertise when they need it, and also reflect their family or reflect that the community where they live, work, and serve.

That's important takeaways. You know, this, this changing nature of philanthropy can almost make one feel hopeful about, uh, about the world right now, which is something we are all looking for. How does that make you feel? Can you— do you feel that philanthropy can give us hope for a better future?

Absolutely. I am so inspired by our clients and the families we work with and the organizations we work with. They have a deep desire to really use their energy, use their wealth to make that positive impact, and it, and it really is exciting to see, and you can feel the level of engagement has just increased. So yes, I have a lot of hope, and I continue to be so inspired and impressed by the clients that we serve every day.

A big takeaway for me in this conversation is that as an advisor, if you're going to engage with wealthy families today, particularly in the mindset they might have in the midst of this crisis, you've got to be talking about legacy, you've got to be involving multiple generations, you've got to touch on the purpose and impact that they're having. But give us some specific advice. Can you offer an actionable idea to the advisors that are listening into this, this recording?

Well, absolutely. You mentioned it, it's leveraging the entire team, especially multiple generations on your team. They'll, you know, push the status quo and continue to help us think differently and bigger and create the change that we we all want to see. And as I mentioned before, it's really remaining close to the clients, our clients, and actively listening, understand what has shifted, if anything, in their priorities. What conversations have they been having as a family? There's a lot of innovative ways to connect with our clients, to really emotionally connect and engage with them to better understand those either shifts, priorities, Certainly the values, and then just remain focused on those priorities and bring in the right expertise to help them to think differently, bigger, and make an impact, which is really what they want to do.

If I can paraphrase that, you're almost suggesting that if you haven't done it in a while anyway, reapproach the discovery process with these clients because perhaps their mindset around some of these really important issues has shifted so far in 2020. Would that be accurate?

It is. Yeah, it's accurate. And I think we're all having lots of dialogue with family and friends that maybe we weren't having a year ago. And so it's really important to stay current on those conversations. And to your earlier point, there's a lot of voices in that family. Do we deeply understand all of those priorities, all of those values? And where passions may be at different generations of the family, given the climate that we're operating in.

Katie, thanks. Those are great points. Is there one specific thing that you think advisors should do when they come back to their next Zoom meeting?

Absolutely. I would say, you know, sit with your teams and have the discussion on your video call. Are we having the right dialogue with our clients, especially as it relates to giving, and then have that discussion and put it into action.

Well, Katie, thanks so much for joining us. Thank you. We appreciate your insights, and I want to thank everyone for tuning in. We'll be back next week with another newsletter and another episode of The Way Forward.

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.