On the first day of the INVEST 2023 conference in financial planning, a speech opened with the story of a little girl who was buried under a pile of wooden puzzles. She tried to get one of hers out of the closet while her mother and her brother were sleeping, but instead the whole bunch fell on her, waking her family up and leaving her. I have been reprimanded.
That girl was Ann Lester, who for the next 20 years was JPMorgan Asset Management’s head of retirement solutions. And if her story seems like an unusual way to start talking about her retirement savings, that’s the point.
“As an industry, I think we underestimate the power of stories,” Lester said in a half-hour session entitled True Empathy: New Approaches to Engage Younger Customers. “People don’t connect with charts, they connect with stories.”
Today, Lester is one of America’s foremost experts on retirement. In addition to her decades at JP Morgan, she Aspen Leadership Forum on Retirement Savings, an annual event that brings together retirement policy experts from around the country. Lester is also a prolific speaker and has an extensive travel history. In fact, she arrived at INVEST after traveling through the UK and Switzerland.
On top of all this, Lester is also the mother of two children. One is a millennial and the other is her Gen Z. And Lester, both from her personal experience and from her professional experience, sees something different about these generations. It’s that they respond to stories more than expertise.
“Gen Z and millennial viewers are skeptical,” said Lester. “From the time they were born, they have been marketed in a much more sophisticated way than when they were kids watching Kool-Aid ads on TV. Ever since I picked up my first smartphone, I have been running individually targeted ads.”
As a result, many of these young Americans are wary of “official” experts and are more likely to take advice from colleagues and social media stars, she said. When it comes to personal finances, you may need to trust TikTok more. ”Fin fluencer“More than a qualified financial advisor.
Recent research confirms this.a Research by FINRA Investor Education FoundationAffiliated to the Securities Dealers Regulator, only 30% of Generation Z Americans (defined as those born between 1997 and 2012) receive investment advice from a wealth manager. I discovered something. On the other hand, the largest group in the survey, 48%, got financial tips from social media.
How can financial advisors close this credibility gap? The key is “communicating differently,” Lester said, and it starts with listening.
“We need to flip the script rather than start in our comfort zone, a place on top of a mountain, content with the certainty of expertise,” she says. “Instead of starting with what we want to tell them, we need to start with what they want to tell us.”
But for these young customers to open up, they need to trust their financial advisors. And that’s where storytelling comes into play. Many young investors trust social media celebrities not because they are experts, but because they tell stories they can relate to. Lester sees this as one area asset managers can learn from financiers.
“We need to make our conversations and relationships safe so that our clients feel comfortable opening up to us without fear of being criticized,” she says. “And to do that, we need to open up to them as many of our peers do on social media.”
Hence the story of Lester becoming the victim of an avalanche-like puzzle. But she also tells other stories, including one that’s even more embarrassing for personal finance professionals. Lester said that when she had just graduated from college, she had used up all her pay, and even part of it, and was in credit card debt. One day, she got her $800 bonus, but instead of using it to pay off her debt, she bought her a baby grand piano.
“I was so ashamed and horrified by my out-of-control finances,” Lester said. “And it felt exactly like sitting on the floor surrounded by puzzle pieces.”
read more: Why are Gen Z so good at saving for retirement?
Talking like that to an investor can be daunting, but Lester said it serves an important purpose. Humanize advisors, remove embarrassment from conversations, and allow clients to be open about their finances.
This is important because many Gen Z and millennial Americans are falling short of their financial goals. 2022 Research by Goldman Sachs We found that 34% of millennials and 27% of Gen Z are behind on their retirement savings.
But these young savers still have one big advantage. It’s time. And when you can trust a financial advisor with real expertise, you can put the financial puzzle together. To earn that trust, Lester says telling a story helps.
“Think about how you communicate,” says Lester. “Is there a story you can tell from your own life and experience that your clients feel comfortable sharing with you about their struggles? I can tell the story of