Jack Sharry: Everyone, thanks for joining us on this week’s edition of WealthTech on Deck. We have a special edition for you this week. I had the opportunity to speak with Michael Liersch. Michael is the head of advice and planning at Wells Fargo. And our topic was innovation. Mike was a real champion of innovation and a maker of innovation. We’ll talk some more, as you’ll hear in a moment about how all that has come about. This discussion was part of the Next Chapter Innovation Summit, which launched on January 25, 2024. And you can find that online through Advisorpedia or through the MMI. It’s free and virtual and worth your while. Or you can listen to it right here in our podcast form, right here and right now. I found this was an extraordinary discussion, really worth your while. Hope you enjoy it. Hello, everyone, thanks for joining me and my good friend Michael Liersch, head of advice and planning at Wells Fargo for a conversation on innovation and improving the advisor, client, and consumer experience. I’ve been fortunate to have Michael as a guest on my WealthTech on Deck podcast a few times. Michael is as clear as anyone I know in understanding what’s missing for consumers and advisors. And in building innovative tools and capabilities that make a difference for both. Michael has a PhD in behavioral economics. He was a visiting professor at the NYU Stern School of Business. He has led important and innovative initiatives at Merrill, JP Morgan, and now Wells Fargo around financial advice and guidance. I’ve interviewed over 100 industry leaders on my podcast, most of whom are innovators. Michael stands out as someone who does what I call practical innovation. Michael and his team came out with an advice and guidance capability that… about one year ago called LifeSync. LifeSync is a breakthrough tool in equipping clients to make better financial decisions over time. So Michael and I are going to discuss how this practical innovation came about, the progress they are making with this tool, and where he sees things going as part of a larger advice and guidance ecosystem Wells Fargo is building. Michael, welcome to the Next Chapter Innovation Summit.
Michael Liersch: It’s great to be here. And I appreciate the generous introduction. And you know, I feel similarly about you. You’re a great, extraordinary human being. So I appreciate you inviting me to be with you in this discussion.
Jack Sharry: And one of the things that we’ll talk about… I appreciate that as well. One of things that we’ll talk about is that… something we talk about pretty much every podcast… is the confluence of digital and human advice. That’s really where I’ve been so impressed with what you’ve done with LifeSync because I think that really kind of gets at… you made the argument the other day, we chatted… that very simple tool. But simplicity is the key. So talk about LifeSync. Why don’t you describe it for those that may not be familiar with what that tool does, and what it is?
Michael Liersch: So, Jack, I’m working on, my team has coached me… I’m working on more plain language descriptions of things. Because, as you mentioned my PhD, I typically go into “dork speak,” so I’m gonna try it out here, Jack, for the first time.
Jack Sharry: Yeah, sure. Here goes.
Michael Liersch: So, what LifeSync is at its core is it gives customers, clients the ability to, in a very comfortable, safe space, articulate their financial goals, at its core. And so what they can do is they can upload pictures from their own photo gallery on their phone, and we know how meaningful that is, Jack, those pictures. We take them throughout our lives, you know, snapshots of things that matter most to us, our kids, family members, friends, you know, the things we want, the things we need, our home. They can articulate, actually the label of that financial goal they have in their own words. So for example, we look at some of that data, Jack, and some people say “Stack that cash,” right. Like they just really want to do something very, think of it as foundational and basic for their financial life. That’s a very common goal, actually, label. They can put the time horizon, so the time period in which they want to accomplish that. And the exact dollar amount that they want to accomplish it with. And they can actually connect it to a account they have at Wells Fargo to track progress. And we do basic math, Jack. There’s no fancy Monte Carlos. And it just says, “Here’s the money you have. Here’s the goal you have. And here’s the progress you’ve made toward it.” You know, of course, we can for our advice clients do something a bit more detailed with our eMoney planning software, which can be shared out through LifeSync, if a customer so chooses to have an advisor relationship and get a bit more fancy and detailed with that. But at its core, it’s the same thing. We really want people to understand where they’re at with their money, how am I doing, at its core. And then there are two other capabilities that I’m really proud of. One, we’ve talked about, which is a newsfeed. That’s literally, there’s no fancy AI or anything like that. It’s just a really direct relationship between the goal and then content or information that can help people make more progress to the goal. So if I’m gonna “stack that cash,” you know, we’re gonna give people the content that helps them understand, well, how do I carve out just a little bit extra money into a savings or an investment format. Or, you know, if I want to protect my family, which is another type of goal we have, you know, what are the kinds of things we can do to kind of ensure or, you know, create a contingency plan for our family and make sure that they’re okay if something happens to me. So I’m really proud of that newsfeed. And we have, you know, podcast type content, very short form video content now, in the things that are actually very consumable that you know, TikTok/Instagram like information for people to consume. And they really respond well to that. And then the other thing that we’ve done is create really brief snapshots, net worth, my portfolio performance, you know, market indices that I’m into, my FICO score, we have that in there too. So people can see, you know why or why they aren’t making progress toward those goals. So I’m really proud of just to your point, the simplicity, and the digital comfort it gives people on their own terms. And then that information feeds into our employee, think of it as workstation, so bankers in the bank branches, advisors in our advised format, they can see those goals, those financial goals and connect with clients and help them make more of their money. So it’s just really something I’m really excited about. And it’s been a really a career moment for me, honestly, Jack.
Jack Sharry: Yeah. As it should be. As you’ve heard me, say, and I’ve written about in other formats, it’s as impressive a client advisor tool, as I’ve seen. And of course, I was thinking in those terms… your… it’s available to any bank customer. And then as they add more assets and more complexity that grows, that’s, so that’s a couple of things. One, it seems to be off to a very good start. Started about a year ago, as I recall. And so I’d love to hear the numbers if you’re willing to share, because I think they’re pretty big. So people like it, it works. And then I’d also love to hear a bit more on sort of the way it continues to build knowledge and understanding if you will, data. So that decision, better decision making will be made. So I do view it as a cornerstone to the larger ecosystem, you’re in the process of building, so maybe talk about all that if you would.
Michael Liersch: So in a very short time period, we released… it’s been a stage launch. So we launched for our advice clients first in April of 2023. And we launched to the consumer audience in October of 2023. And now we have a total of 2.1 million users in that time period. We have 470,000 financial goals articulated. And when you think about that, think about the goals people might engage in, really exploring with us. Some of the top goals, Jack, are things like manage spending, manage credit and debt, buy a home, right? These are very foundational goals. They’re not sort of highfalutin goals, like to win the lottery, right? These are real, they’re real goals. And I get asked that question all the time, you know, “Are these aspirations?” And I said, “No, they’re really practical, pragmatic things that people want to accomplish.” And the dollar amounts aren’t crazy, Jack, they’re in the zone of what a normal human being would find reasonable and want to accomplish. So I’m really excited to see the data because the data also show that people are using it, practically speaking, in their real lives, to inspire them to achieve those financial goals.
Jack Sharry: So, earlier, I mentioned that you’re a master at practical innovation, which really struck me because you and I have talked about LifeSync and many things, across… what so many people are trying to do which are build platforms, ecosystems, tech stacks, call them what you will, but trying to build a way to help the consumer in a broader sense in terms of all the different elements that they’re concerned about. We tend to, in our industry, and there’s a huge shift underway… We’ve also talked about this, from telling them what they should do, they need to do, and moving on to what they’re looking to achieve what they’re looking to accomplish. In any event, that’s sort of the context of all this, That said, talk a little bit about practical innovation, if you would? Also, if you would talk about where does this inspiration come from? Where… how does this come about? What… how does this happen?
Michael Liersch: So you mentioned my PhD, and it’s something I used to like put out there as something that I was very proud of and I and I am. I come from a very poor background, and no one in my family has a PhD. So I’m very proud of it. But I think I used to put it out there because I thought, you know, complexity and being the smartest person in the room, it was so important when it came to innovation. And I think it translated into the work I did. So I’ve made a lot of career mistakes, Jack, in my life. And well, I mean, it’s just the truth, right? You know, some of the things that I’ve built, created, they’ve been elegant and very complicated in their elegance, but the adoption of them has been lower than I would have hoped for, although the outcomes related to them have been great. When I’ve really reflected, especially in my time at Wells Fargo, I’ve thought a lot about, to your point on practical innovation, how do I get on the other side of that complexity? And when I’ve gotten on the other side of that complexity, it really has required me to get out of my own head, which is I think the the struggle of innovation, right? We’re kind of all in our own heads trying to be from an innovative standpoint. You can… as clear as day, and really get into the heads of the people that we’re trying to help and serve. And so I’m… I am a research-based human after all, that’s, that’s really the core. So when I went out and asked at Wells Fargo what people really wanted, they wanted three things, Jack. Very plainly. They wanted us to stop talking, especially with respect to financial planning, in those terms. And so what they told us is, they know what a financial goal is, any segment, they get it. They understand what a financial goal is. They can translate that into their own financial life. Okay, great. So we don’t need to talk about all these different, fancy things related to formal financial planning, holistic financial language, really need to put things in terms of financial goals. The second thing they told us is that they didn’t really want this notion of, you know, well, there are three simple ways to get rich, there’s three simple ways to invest, there’s three simple ways to save. If that were true, Jack, we wouldn’t need to be talking here. They wanted it to be very authentic. It’s hard, these are difficult things to do. Give me, to your point, very practical, pragmatic things that I can actually do and accomplish. And you can just be honest with me, you know, I really focused on that. And the third thing with respect to practical innovation, is that before you, you get innovative with me as a customer, people just want you to respond to what they tell you, they tell you they need directly. When we have 470,000 financial goals, there’s nothing complicated about that. They’ve told us, “I want to save my spending.” So before we get any more innovative, we just need to help them with that. What’s strange about it, Jack, is the response we’ve gotten is, “No one’s ever helped me with that before,” or, “Thank you so much for listening,” “Oh, my gosh, you get me,” like, “This makes so much sense.” And that is innovation. So when I think of practical innovation, I think of really getting out of the cobwebs of our own minds, our own competitive environment within our ecosystem here and saying, Okay, what is their end customer really need? What are they really telling us? And what they’re really telling us is they want us to be honest, authentic, and straightforward with them about where they’re at. So that we can reflect that back to them, they can manage that progress, and we can give them ideas about how they can make more of their money on their terms, when they can manage to that idea, rather than us, you know, throwing a bunch of information and, you know, oftentimes, like real ideas, but that probably aren’t possible for them to accomplish as a human being. Does that make any kind of sense, Jack?
Jack Sharry: Yeah, I think totally. My observation, having been around this business, multiple decades at this point, is that so often… and this is true across, across life. We come up with our bright idea, we want to force people to like it. It’s not quite force, but often it is, frankly. “Here’s what you ought to do.” What’s missing in between, and what you’ve touched on here… And we talked, we’ve talked a little bit about this offline. And that is to really hear what the customer is looking for. And then really what, as I observed LifeSync, and it’s still early days, it’s off to a… I know nothing that’s had that kind of adoption and engagement out of the gate. But over time, you’re gonna know more and more about that client. So when you’re talking with them, the more you know about them, not only the detail, the asset size, the credit card balance, the, all the stuff they can see, you’re not only going to know that but you can put that together in a way that when you go to make a recommendation or suggestion in line with their goals, that you’re you’re just more on point and guess what that enables or makes happen is, is trust. And that’s really the fundamental issue at hand. We’re trying to help people achieve their goals. But I’d love to hear your thoughts on that.
Michael Liersch: Well, so I know, you and I’ve talked about this, that trust is built via listening. And that, not only reflecting back what you heard, but actually doing something about it.
Jack Sharry: Yes, yes.
Michael Liersch: The other thing that I’m extremely proud about that is a more of a career first for, for me, which I’m a little embarrassed to say is that we really are being very intentional. So LifeSync, we kept it very straightforward in the beginning. Our customers could see that it was just the beginning. Intentionally, Jack. It’s almost like… A real, agile way of building. And so we’d get a lot of voice, a client and customer back to us, via reviews and via customers or clients directly, we have a lot of channels to hear them. And my favorite thing that I’ve heard so far from our customers in mass is, I can see that this is just the beginning. And so they tell you, here’s what I’d like next. And so you know, there are things that they tell us that they want next, and I don’t want to reveal too much here. A lot of that is, is the secret sauce. But one of the things that they want next that I’ll share with this audience, is they really want us to help them create a set of opportunities where they know the, think of it as the cost benefit trade off, Jack. And money, energy, however you want to think about it. And then on the other side, what’s the benefit to them? That’s where people are struggling most these days. Limited time, constrained resources, and everyone knows you can’t do everything. It’s just like in business, right? Everything can’t be a priority. Because if everything’s a priority, then nothing is going to get done. So people recognize that. And that’s what we’re really hearing from people.
Jack Sharry: Interesting. That’s great. So the flip side of what we’re talking about, this is all the fun stuff of listening well and finding what they’re looking for, you may have run into a few obstacles along the way, especially as you’re innovating and disrupting how business as usual is done. So what are some of the obstacles you’ve encountered in innovating? And how have you worked through them? One big obstacle, as you’ve discussed, is the growing complexity of providing financial life. You’re off to a good start, sounds like. So if you’d share with our audience how you’ve overcome the obstacles? How you get to what they’re looking to achieve? How does that… what does it, starts to look at… when… how do you move forward? How do you start to keep fulfilling on the hopes that you’ve raised in terms of how you’ve gotten started?
Michael Liersch: I would say there are two main obstacles. And I’ll talk a little bit about how I’ve addressed them, and sometimes successfully and sometimes unsuccessfully, Jack. The first obstacle to innovation is always communicating the desired outcome of the innovation. And some people call that a vision. Some people call that a plan or a strategy. Whatever you want to call it, the desired outcome in aligning around that, because there’s so many different ways you can accomplish a particular outcome, that has been a key challenge for me with respect to innovation across my career. I can’t say that I’ve solved it. But what I’ve done recently is been very keen to understand that I have so many different audiences, Jack, and I really have to outline those audiences and describe the desired outcome in very different ways. And that requires a lot of thought, effort. And what it does is it also helps me be very crisp on the logic behind the why around innovation, which I think gets back to your other comment on practical innovation… Complicated it, or it’s about me and not about actually, my team or the customer. And so it’s forced me to really be a bit more selfless in that. The second challenge that I would say that I’ve had, and we’ve talked a lot about that, is sustained funding of the innovation.
Jack Sharry: Interesting and practical.
Michael Liersch: And so what I realized is when I think of a, a lot of times you think of innovation as this big, disruptive moment. And so I’ve moved away from that very deliberately now in my well, actually real innovation is bite sized, incremental change at the time. That then in two or three years, people look back and say, “Oh, my gosh, we transformed the way we did something without even noticing it.”
Jack Sharry: Yes.
Michael Liersch: So I’m moving toward that. Again, fits and starts of success there, as everyone will tell you who knows me. But I really want to move toward this idea of, “What Michael and his team have done, I almost didn’t notice it was changing me in a positive way. But it did.” And that’s been a real challenge. One thing I’ll highlight, the biggest challenge I’ve had there is really sorting out how much change feels bad versus good. Haven’t figured that out yet. But there is a balance. What’s your thought there, Jack? I’m curious.
Jack Sharry: Consistent with what we talked about earlier is you’re literally listening as you go. You do your research, you build a tool with your best intentions, you get mostly right, sounds like a lot right. But I’m sure you found stuff a lot, “Didn’t we need a little more of this or a little less of that? or, “We missed this thing,” or whatever. In my sense, having talked to you about this over time, it’s a constant improvement. It’s consistent listening, checking it out, listening to what you hear that worked, that didn’t work. What people are looking for. And that leads me to a question on the various integrations that have to occur, because you’re talking about bank stuff, you’re talking about advice, or advisory stuff, it’s a synthesis of these of existing systems. Oh, that’s right, you got some legacy systems you probably got to deal with that you wish weren’t there, but they are. And you got to deal with them because everyone’s got them. So my sense is, there’s a path of continuous, you’ve already said it, but a continuous innovation, coordination, and improved client-advisor experience. It’s a, it’s a refinement. And I love how you characterized it as incremental. It’s not, it’s not big bang. It’s step by step, inch by inch. So what’s next for LifeSync and Wells Fargo? You’re building an ecosystem, you’re on top of an existing one. How do you connect those dots? How do you make things work? How’s that going?
Michael Liersch: I will say, it’s going extremely well, better than I thought it ever would. And it’s because of what you just described. When we look at a lot of the past way in which I’ve led teams around innovation or others have, it really is about transformation, right? Taking legacy systems, let’s call it data, or ways of engineering and doing a huge migration. I’ve stopped that, Jack. Boy. And what I’ve said is, okay, where can we do a, let’s say a section of that work, and have the biggest impact on the end customer or client, however, you want to perceive that ,whether that’s an advisor, banker, end customer or client, right. So a human being who’s interacting with Wells Fargo. So that’s how we’re approaching it in four very structured ways. Data, systems, and so thinking of things like API ,services, all that kind of stuff, tools technologies, so think of LifeSync, eMoney, you know, performance reporting, whatever you want to add, and then the humans that sit on all of that with respect to their process. That could be the end customer or client or an employee. So I look at all those four things together in concert, to evaluate what’s the next best, let’s say change to make or innovation to make and make sure it’s just bite sized, snackable for the organization, where we can do something within a three to six month time period to make a meaningful, obvious change from a business and a client outcomes standpoint. Does that make sense, Jack?
Jack Sharry: Makes great sense. So we’re gonna have to wrap up, given our limited time, this is fascinating. We’ll, we will continue this over the coming months and years, I’m sure. Congratulations on a great start. And it’s pretty amazing, the numbers that you shared earlier that they’re less than a year, I said a year, it’s really less than a year. And I imagine will gain some momentum because you’re so spot on and so attentive to what’s going on. So congratulations to you and your team, I, while you are the figurehead and the leader, for sure, I know you’ve got a great team around you. So congratulations to them as well. So as always happens when I talk to Michael, I’ve learned a ton. Thank you, sir. I learned a bunch that I didn’t know. And hopefully our audience has done the same. There’s some real valuable insights here in terms of creating practical innovation. So Michael, thanks so much for spending this time with us.
Michael Liersch: Thank you, Jack. I appreciate it.
Jack Sharry: Thanks for tuning in to this discussion as part of the Next Chapter Innovation Summit. I really enjoyed my conversation with Michael Liersch. Michael is always interesting to talk to. Always thinking, always trying to find a way to make positive change. I really appreciated his taking the time and sharing his perspective. Michael and his team have built an important tool, simple and practical. It is already making a difference for their clients. For our audience, if you’ve enjoyed this special Next Chapter Innovation Summit conversation as we’ve applied it to our WealthTech on Deck podcast, please rate, review, subscribe, and share what we’re doing here at WealthTech on Deck. We’re available wherever you get your podcasts. Thanks, everyone. Please be sure to tune in to the Next Chapter Innovation Summit, which you can find online. I think it’s worth your while.