Cynthia Loh on how Goldman Sachs Personal Financial Management is optimizing technology for advisors

Technology is transforming financial services, allowing the ability for investments and planning to be more scalable than ever. In this session, Head of Product for Goldman’s Personal Financial Management business, Cynthia Loh, will discuss what the firm is doing to enhance client web and mobile apps to better serve advisors so they can help clients minimize financial stress and maximize their return on life—today and tomorrow. Attendees can expect to hear:

Goldman’s approach in solving for clients’ whole financial life (not just your investments)

How to leverage tech to create a seamless and scalable customer experience

The importance of marrying high-quality digital tools with human experiences

Transcription:

Justin L. Mack: (00:10)
Good morning, everyone. All right, now I wanna thank you all for joining us for this very special session with Cynthia Loh, Goldman Sachs, as we discuss we're wealth tech and financial services connect and how her organization is optimizing technology for advisors. Now, as my disembodied voice has told you all. Yes, my name is Justin Mack. I am wealth tech reporter for Financial Planning, as well as the host of the Financial Planning podcast. And I wanna take a moment to thank you, Cynthia, for joining us, helping us kick off our return to in person, invest with a bank with our first keynote of the event. So again, another round of applause for Cynthia.

Cynthia Loh: (00:46)
Excited to be here. Thanks.

Justin L. Mack: (00:50)
All right. Now, Cynthia, we're gonna talk a lot about the technology and the work you're doing and all of that, but I wanna get rolling first by talking a little bit about your why and your, how, what inspired you to get into the world of financial services and what was your path to the industry like,

Cynthia Loh: (01:05)
Yeah, Justin, good question looking all the way back, when I was actually in college, I studied cognitive science. So I was one of the first majors at Berkeley on cognitive science, which is really the study of how people think anthropology philosophy, I focused on artificial intelligence, so quite a lot of programming as well, and that year, the jobs that were most popular were really investment banking and consulting. And in my investment banking interview, the first interview I had was someone the only other person I think I've met in a cognitive science degree and I went into tech investment banking and that started a series of roles really that culminated in the last decade, focusing a lot on the intersection of finance and technology. I think that's how it started a little more haphazard than I think I could, paint the picture today, but I think why I do it now is really, I fully believe that now we have all these technological advances that you can bring more financial planning and investing to people that are not just the ultra wealthy, but to anyone that needs it. And that's what drives me now. Absolutely. And that power of, technology to provide access and provide opportunity where it didn't exist before. It's gotta be exciting. And again, not the typical path to in FinTech and to the industry, but one we're glad you made and we're gonna continue on your journey a bit. Tell me about your path to Goldman Sachs, the work you're doing now in your current position. Yeah.

Cynthia Loh: (02:37)
So Goldman Sachs, I joined about a year ago as head of product and really the reason why is just the, I think there's a tremendous opportunity. I mean, for so long Goldman, we've been in the business for 150 years. The last 50 years, we've focused on the ultra high net worth through our private wealth management group. And we're really now just entering into focusing a lot more on your typical retail consumer, and the opportunity to bring a little bit of what Goldman Sachs has to offer and our expertise to a lot more people is really what drove me here.

Justin L. Mack: (03:12)
Absolutely. And kind of to follow up on that is how has the typical retail consumer changed a little bit, because we know that we're seeing more people seek services, guidance, and the work that you're doing for those unfamiliar. If you could give us a little breakdown on what exactly Goldman Sachs's personal financial management is, what services you offer. And again, that change in what the typical consumer is today in 2022.

Cynthia Loh: (03:34)
So, Goldman's consumer and wealth management division is actually fairly new as a focus area of the firm, we created this division in August of 2020. And if you think about the makeup, it's really three divisions on the ultra high net worth side. I touched on the private wealth management. That's probably more familiar to most of you, on the other side of that, we have our Marcus by Goldman Sachs, which is our robo largely digital and personal financial management sits in the middle. we are, advisor led. We are actually the, integration of two acquisitions that we've made previously, the first being, Joe Duran's United capital, which we acquired in 2019. And the second is actually a company called Eko, which we acquired 20 years ago, which really focused on workplace wealth. So personal financial management, I think the advisor led aspect and the fact that really, we're trying to solve this, largely through workplace wealth and partnering with fortune 1000 companies, I think is one of the distinguishing factors.

Justin L. Mack: (04:33)
Definitely. And, if you could, that advisor led focus really interesting, especially for our readership and financial planning and the work we're doing. Tell me a little bit more about that and why is that so important that advisors are in a sense steering the ship and how we're approaching clients and this topic?

Cynthia Loh: (04:48)
When I think about my previous experiences at Betterman or at Schwab, like this is actually quite distinct, we were talking about advisor as the service advisor as the product like that is the key offer. You build a relationship with your dedicated advisor, and I think that's very different than saying, like, here's a website, like please log into your website. And there's some people you can call if you need support. And you don't necessarily know who you'll get but, advisors are the core of how we think about what personal financial management is. The advisor quality that we have at Goldman is incredible. If I will go off on a little tangent of a personal story, I'm a client, clearly. And, my advisor to kind of think about the detail and the depth that they work with us. I live in Boulder and during the fires, actually in December when 20,000 houses were evacuated, the first text that I got was not my mother, not anyone of my friends or family, it was my financial advisor saying like, you just bought a house that Boulder is burning. Like, are you okay? And, it's a little thing, he lives across the country, but I think like the focus of not only being advisor led and that advisor is my relationship and is the offer that I focus on. But also this thing that like, he's got me like he's taking care of my whole financial life, which I would say is kind of the second differentiating factor. That what we're talking about personal financial management, we're not just saying, even though you might think like we're Goldman, we're focused on investments, we're actually in this group focused on your whole financial life. And a lot of times that goes beyond investments. Yes. We have an excellent alternatives platform. Yes, we have fantastic investments, but also we have great financial planning software. We have great, ways to think about like how to do your tax preparation, how to do your estate planning, making sure you have life insurance. And oftentimes these days, especially the aspects outside of your investments are the things that are actually gonna contribute the most to your financial life. And so I think those two are super important distinguishing factors that we wanna look at your whole life not just, a piece of it that you invest

Justin L. Mack: (07:04)
Definitely. And the power of technology again, to provide that ability to do so. And like you mentioned, just getting that message from your financial advisor about something that has nothing to do with money management, your finances at all, just checking on you is really interesting. And something that I've heard a lot from both advisors and clients that I've spoken to is just that, although we've been forced apart for so long and so glad to have you guys all in the same room, cuz this is way better than looking at you on zoom screens, but the ability to be able to connect more directly with people while we do have multiple screens between client advisor or peer and colleague, however, there's more screens, but there's greater connection and more ability to connect at any time, and like you said, this advisor led focus is really powered by all these cool toys we get to play with. So tell me a little bit about how advisors are leveraging technology to get in front of their clients and deliver a personalized experience. One that like you said, checks on you when Boulder is burning, but also checks on you when you're ready to plan for retirement or help your kid go to college.

Cynthia Loh: (08:05)
Yeah, I think, it's so important now to leverage technology, as you said, our clients are expecting us to be available all the time. Like our phones are in our pockets. I wanna be able to text or video call or chat or do what however means is necessary or is my preferred method really to get in touch with my advisor. I think on the tech tool side, I think there's some very simple elements that we're doing to just make it easy. Right. We wanna make it easy data entries, like thinking about going from your investments to your financial planning, to your taxes, to your life insurance, like are all those experiences integrate? Do they inform each other? do I know when a big change happens, leveraging technology to know if my client is, getting married and getting divorce, like what are all the big life events that actually could impact financial life? And so the way we're really thinking about advisor tooling is integrating this whole financial picture and making that key. But I think the second part of it is when we talk about whole financial life and advisor led what we mean by that is truly that when I see a piece on inflation, which is something I'm particularly interested in, right? It's that my advisor notified me on this really great piece that Goldman's research desk put out on inflation that I would be really interested at and it's me and every other, one of his clients that are interested in inflation. And that can be true for peer meetup groups, events in my area, all different other types of things, but it's not just like an email that I know every single one of the other clients got at the same time. It was tailored to the specific interest that I might have. with a note that might say that that's all able to be driven by technology.

Justin L. Mack: (09:46)
Absolutely. And to follow up on that, just in your opinion, how do you feel that empowers the ability to not only maybe reach new client bases, but to strengthen relationships among existing client bases? Because again, hearing all that, that's gonna make me feel a little bit closer to the person I'm working with, who I'm trusting my entire life too. And I think in today's environment so much of the time when we're having meetings, it's happening digitally as a result, you're gonna see more of my personal life than you would in the past if we were meeting in your office because you've gotta see my backdrop, you've gotta see whatever weird posters I've got or anything that I've going on. You're probably gonna meet my cat, cuz he is gonna jump into the frame. That's what he does. So the lines between the personal and professional start to blur when technology allows that deeper connection, just in your opinion, how is technology changing the relationship between advisor and client and is it changing it for the better, worse? Just your thoughts on that?

Cynthia Loh: (10:36)
I think you're exactly right. I think it's making it closer and deeper than we could have before. If I step outside financial services for a second and go to like the consumer space, Uber, Amazon, especially I feel very close to Amazon. Like Amazon knows everything about my life when I need paper towels before I do like that is maybe like, I think, a few years ago we might have said, gosh, that's kind of creepy. Like, I don't know. I don't know about that.

Justin L. Mack: (11:01)
Take a step back basil. So that's a lot of information, but about More and more, I would say like, I expect you, I updated my financial plan. Like why don't you know that about me? I already told you digitally through text, through chat through some mechanism. I already let and that piece of information should flow everywhere and also come back to me in things that are most relevant. And so I think like if you're an advisor and say you have, I don't know, a hundred clients, there's only so much a human can do in 24 hours a day, but leveraging technology, you can have that association that's much closer. You can, the clients that love to talk to you all the time, you can have that feeling that you are taking care of them by leveraging technology and leaning on tools to help you like make that feeling come true. Absolutely. And jumping back into the work you're doing with Goldman again, fairly new work that you are doing, tell me a little bit about how Goldman is empowering advisors to deliver a scalable customer experience. Cause we hear a lot about scale. We hear a lot about the ability for technology to fill in gaps that might exist. And, especially regardless of the size of the advisor of the firm or the work you're trying to do, tech can really do a lot for you in empowering that a little bit about what Goldman's doing and that scalable experience for customers.

Cynthia Loh: (12:19)
I think so if I think about the overall experience Where we have two clients that we're really building for. One is the client, the ends client that we're serving. And so for that client, we're actually in the process of building a new website and a new mobile app that will hopefully make these tenants come true. It should feel like your entire financial life is in one place, and that it's very modular. Like I might see something about life insurance, but someone who's about to retire might not because it's potentially not relevant for them, and the second piece of that is that advisor pushing like advisor chats, being able to know your entire conversation that you've had back and forth without having to search through email, or text or other means to have that. So I think one of the things we're doing to help advisor scale is making sure that the digital tools that we're creating for clients are very robust, that you can get access, you can analyze your own portfolio to like an own tools you can play around with your own retirement age on your own time. And the second piece of that is making sure that the advisor tools are integrated that all of the aspects that you're serving to clients to complete this whole financial life picture tell the complete story and then update to one will impact all the others. And just trying to make that as easy as possible so that our advisors can focus on clients and those relationships and the emotional tie that our clients have to money, as opposed to whether that Salesforce update went to, the financial plan.

Justin L. Mack: (13:44)
Absolutely. And I want to kind of go deeper a little bit on the integration because in our recent tech surveys, in our latest editorial research report, which shameless plug the, annual tech survey is available now, it went live today on financial planning.com as well as our previous editorial research that I authored is also available on financial planning.com. Go check it out after this, not during that would be rude, but number one problem that we hear from everyone is integration. It's about cuz you the frictionless experience for the client is always the pitch. That's always the goal, but we understand that we need a frictionless experience for advisors to pass that forward, talk a little bit about that integration and the struggle of this is perfect for my practice. This is perfect for what I'm doing, but it doesn't play nicely with anything else that I've relied on for years. And now my business has changed because the world has lost its mind. How do you solve that integration problem, make things fit and create a frictionless experience for the advisor so they can make sure their clients get those good vibes too.

Cynthia Loh: (14:43)
Very carefully I think, data integration data in general, right, is a huge topic for all of us in this room. I think on making sure we have accurate data on all of our clients, what they're doing, what they're invested in and everything else. I think it is critical now to make sure that the integrations work, that is the number one kind of aspect that we're focusing on the most right now. And in kind of building out this website, because if you don't have correct accurate single source of truth within your data, it's very challenging and very difficult. And so I think building integrations is actually like a non insignificant part of what we do in order to make that experience seamless.

Justin L. Mack: (15:25)
Yeah. And then, goes without saying the east that it provides to your life when, in terms of compliance and everything else, we don't need to get into that, but it makes perfect sense that you would want something to be as uniform as possible. Like you said, frictionless experience and that way you're in a better place when you're serving your clients when they're coming to you and they're freaking out because they've had the kind of week that we've had, in the world. So they're probably gonna have a little friction when they call you anyway, let's transition a bit and talk about your thoughts on the state of the industry, because you've, again doing brand new work that is very much driven by the desire to, like you said, serve a holistic financial life of somebody. And again, something that is being more trumpeted in the past couple years. And as we heard in our previous panel, things are changing at a rapid pace, direct indexing been around for years, but in the next year it's expected to explode like never before. So your thoughts on how fast we're moving, what's big next and I guess what's gonna be top of mind for you as you continue to develop these experience for advisors.

Cynthia Loh: (16:25)
I think clearly data is a big one. I think getting data, right? It sounds like such a minor sort of unsexy thing to focus on, but it's critical. And it is the only thing that like we have to get that right in order to deliver personalized experiences. So I think that like needs to be a focus area for everyone, I think the second thing, and you sort of touched on it with direct indexing is that, we're focused on more of a mass affluent client now, and that client has access to a lot more investments, previously it might have just been about index funds, a handful of single stocks, maybe some fixed income, but now you have direct indexing that you can put your own values in that you can have, tax benefits from you have art real estate fractional shares of both crypto, like all kinds of different types of investments that are now much more accessible. I see a new company popping up all the time that has alternatives available for, $2,000 or some very low minimum investment that we haven't seen previously. And so just accessibility of investments type I think is going to be, really continue to spread. I think the second aspect of that is financial life. I think that, you haven't seen a player necessarily reach like broad adoption in terms of like aggregation works all the time and this is the place I go. Like people want to just solve their financial life so they can go out and do the things that those finances are enabling, whether that's happiness or security or, giving or whatever the focus area is. But more and more, you don't wanna have to go to like an insurance broker and an accountant for taxes and this person for investments, you just want someone to take care of it for you and tie the whole thing together with a bow so that, you're taken care of. And that is kind of settled, I think from a third trend perspective is actually women. I think women investors, continue to grow. The last step that I saw was 30 trillion controlled by 2030. And there's less than 20% of the advisor population that are female. That is a massive opportunity for more female advisors and really getting to that woman CEO demographic.

Justin L. Mack: (18:38)
And that goes along with work, we've done reporting, we've done research we've done that shows the significant value that exists in that client base. If again, there are more women in the industry and more people actually working with women investors again, significant not only business sense, but just the ability to do again. When every time I talk to an advisor and I ask, well, why'd you get into the business? Well, I want to help people, well, I wanna help people make good decisions and solve their financial life. And again, large swath of folks that are ready to do just that, continuing on that, just wanna talk about, and it kind of goes with your path into the industry for you, as we see everything change and these abilities to again, provide access through technology and really widen what it means when we talk about wealth management and what wealth means when we provide access to a greater group of people.

Justin L. Mack: (19:22)
And this is kind of a good vibes question. I'm a good vibes guy. I'm all about it, but for you, what is the most rewarding aspect of seeing technology allow you to change more lives? simplify life while life is extremely complicated all the things that exactly won't make it into an earnings report, but when you are doing your job every single day kind of provides those good vibes to keep you going when it gets tough for you personally, most rewarding aspect of seeing all of this and the power that technology allows.

Cynthia Loh: (19:52)
That's a great question. I actually love sitting in on client meetings and listening to client calls. So we have a team of people, our coaches, we offer this financial wellness, offer to a lot of corporates and getting to listen in on those calls. When people call in and say, this is what's going on, this is my salary. Like how, what do I do? I love listening to like coaches help those clients. And also our advisors meeting with clients. I have some of my team in the audience. They know I'm very focused on like go sit in the advisor offices, like go sit with them and feel what it feels like to be an advisor all day or go listen to those client calls and like, understand, like we can change their lives. And when I say that, I mean like the clients that we are focused on are very much in the mass affluent space, and so Those are the times when it's most rewarding where you're like, we really like, we made this easier. We, we helped digitize. They don't have to, manually integrate. They saved 20,000 hours this year on, on something that we made simpler. And so I think it's just helping clients and helping advisors do what they do best, which is serve our clients.

Justin L. Mack: (21:05)
And, as you listen in on those kinds of meetings and those kind of conversations, how are clients I guess, different now too, because while we have all these new tools, it's not a one sided party, clients have more opportunity to look for what's best for them find the perfect advisor or the perfect organization to work with. They can gather way more information than in years past and say, this is what I'm looking for, so I imagine you probably have clients that might be, well, I would say Savier, but maybe sometimes gather bad information because Twitter advisors are a thing and not everybody should be given advice on, social media, but just your thoughts on what you're seeing as far as the sophistication of clients, especially first time clients, new clients, the clients that aren't being served, but technology will allow them to be served very shortly is the first time client in 2022 different than the first time client when you first got into financial services?

Cynthia Loh: (21:56)
I think so, I didn't coin this term, but I have heard before, the last best consumer experience that you had is your bar for your next consumer experience. Right? And so when you think about what a consumer digital experience was like 20 odd years ago versus today, like expectations are just totally different. I think the financial services industry, were not especially known for being the most forward thinking digital, pushing the envelope on net new digital experience necessarily, but certainly on the consumer side, many of the tools that we use day to day are. And so we're sort of in a fortunate position that we can see how that is playing out through other consumer apps. But I think the expectations of being on demand and being able to do what I want when I want all the time, even in finances, which I said, which I would think wasn't true previously, is true now. And I think that's like just honestly, table stakes. Now, if you, if I have to wait on a Thursday evening until Monday morning at 8:00 AM to get a response to a question I have it's way too long, and so being able to access the information all the time and being able to prof, like do my own scenario analysis, when I want to will be critical.

Justin L. Mack: (23:13)
Absolutely. And another question I have too about again, future what's changing, obviously you guys are gonna be having a lot of exciting new stuff that will probably keep you an eye on that financial plan. I'll probably be bothering you about in the future, but for you any primary goals, for the rest of the year things you would like to accomplish things you would like to see, I guess, come to fruition, things that you've been working on, that you are able to share about what Goldman's working on and how it's gonna impact not only advisors, but clients and everybody.

Cynthia Loh: (23:42)
I think just from a, our business perspective, the personal financial management business, just that continuing to grow and drive, The biggest misconception I would say about Goldman is, gosh, when I talk to many people, it's like, well, gosh, I don't know if I have enough money to be with Goldman. Like that sounds, kind of far out of reach. And so I think the biggest thing we can accomplish as a business is sort of debunking that myth. Like now we have solutions for all types of retail customers, whether you're interested in doing robo investing or working with an advisor in personal financial management. So, we have, those capabilities and we're really focused on actually, again this concept of whole financial life. I keep saying it because it's so important. And I think it's, just the thing that will drive us forward. It's not just about like, is my portfolio up or down anymore. It's are all the big things taken my life that are gonna impact my finances taken care of.

Justin L. Mack: (24:39)
And then any words of advice for the folks who are providing the solutions that the FinTech developers, the folks that I spend a lot of time talking to, and a lot of new advancements and exciting announcements, but advice for folks who are either just getting started or working on that next big thing, about how to one stand out, cut through the noise a little bit and create solutions that are truly going to simplify the lives of advisors. not just because it's, it looks good or it's, oh there's a market here or something like that. Because when you talked about sitting on client meetings and again, having your team understand what it's really like to be an advisor, that's sticks out as something that would be very valuable when you're creating solutions. Any other words of advice, guidance for folks who are in that space, maybe haven't had experience as an advisor, but are working on solutions that are going to benefit advisors today. And in the future,

Cynthia Loh: (25:28)
I think the biggest one is be staying close to your end consumer and making sure you're truly solving, I'll share a quick story, which is, you can look at data all day and determine, gosh, based on this data and this analysis that I've cut up with, this is the best feature that I need to deliver forward. But if you don't understand how people perceive brands website apps, tools, and understand the actual process that they're going through day to day that's not captured in the data, you really need to be able to be the advisor, be the client and understand what those pain points and needs are. It typically doesn't show up in the data. It's far more emotional than that and I would say the second thing is it's make it easy. Just make it easy. Like the best solutions out there are the ones that are the most straightforward to understand that you could that like, if I can explain it to my grandmother, like I know we've hit it.

Justin L. Mack: (26:24)
Well, then hopefully can you explain it to my grandmother afterwards because I, I'm not good enough at, helping her do much. All right. And then I wanna thank you again for taking the time we're nearing the end, and I wanna make sure we give enough time for our next wonderful panel to get up here. So I wanted to just end things by asking you number one, favorite thing about your career so far, if you have a standout moment, and this is gonna be one of those opportunities to just give us a standout either a moment of where you've accomplished something through the work you're doing, whether it be impacting an advisor's life, feel free to get real cheesy with us, but something that is a feel good moment that you hold onto that has nothing to do with, I guess, the technology, because what's interesting and I think a lot of people can attest to that. If you're feeling good about the work you're doing, you're probably gonna do good work, at least I can speak for myself. Thankfully, my editor's a pretty decent guy, so I'm in a pretty good mood some of the time sorry, Brian. but for you what's a standout, I guess moment for you that you hold onto or something you realize, yeah, this is what I was supposed to be doing. I'm glad I'm here. And this is exactly what I hope to accomplish with the work that I'm doing? This Is how we get down and invest.

Cynthia Loh: (27:38)
No, that's a great question. I love to build and I love to grow and I actually, I really like messes, messy problems, I think are my favorite things and so, I'll kind of stick to Goldman in this answer, but I think the, opportunity that we have in personal financial management is just one of the greatest opportunities. I think I've seen the ability to take the advice that we've had for, the last 50 years and bring that to more people. I think every day when I see that we're able to do that to grow and to hear the client stories as a result of that, I think that gives me a ton of satisfaction.

Justin L. Mack: (28:22)
All right. Well, I can't think of a better way to end it than other with another round of applause for our guests. Cynthia Love Goldman Sachs. Thank you so much for joining us. And everyone stayed, put, well, not really stretch your legs. We're gonna make sure we get everything set up for the next panel, but don't stray too far because you're not gonna wanna miss it. I promise you, I would never lie to you. You just met me. Everyone. Have a great time.