Alvina H. Lo, chief wealth strategist and an executive vice president at Wilmington Trust | M&T Bank, discusses closing the wealth gap in the United States, empowering women for the impending wealth transfer and exploring emerging trends in wealth management.
What was your journey into wealth management like?
I think that like most interesting journeys, mine has not followed a straight path. However, I’ve been lucky, because every one of my experiences has contributed something to how I work within this industry. I got my undergrad degree from the University of Virginia as an engineering major, and the math and analytical skills have been very helpful — whether talking to clients about their individual financial plans or as an executive managing my business line. My experience as a consultant helped me understand people and sharpened my communication skills. I earned my J.D. from the University of Pennsylvania — apparently, I really like going to school in commonwealths — and my time as an attorney and years in private practice gave me a great deal of experience learning about the complexities of wealth planning. It also taught me to be a fierce advocate for my clients and team.
I did not know what wealth management was growing up. It wasn’t something we ever discussed. It is actually still quite surprising to me that I’m in the industry, given my family’s history. My grandmother grew up very wealthy in China, which was erased almost overnight because of the political unrest during the Cultural Revolution in China. Just two generations later, and I’m here in the U.S., the largest global wealth market, leading the charge to help our clients build and preserve their wealth. My family’s own history is, in part, why I’m so passionate about my work.
As a female leader in wealth management, what can the industry do better for women in wealth?
I think of this from two perspectives: How do we better serve women as clients, and how do we do a better job developing female talent in the industry. Wealth management is a very personalized business, and the ability to understand and anticipate clients’ needs is critical. Therefore, if we are to serve our female clients better, we need to develop a pipeline of talent who understands and empathizes with their needs and desires.
I don’t believe that there is any material distinction when it comes to products and services for a woman. The differences come in the relationships. Over the last 20 years, I have seen how different [that] women and men communicate. Wealth management is first and foremost a people business. Being able to communicate with your clients in a way that they can truly hear and understand your advice, and trust you enough to share their most personal aspirations, is the secret to success.
We all know the great wealth transfer is happening, and a tremendous amount of wealth is going to women. So now what?
It really is an exciting time to be in this business, partly because of the so-called great wealth transfer. Baby boomers are set to transfer an unprecedented amount of wealth to the next generation. According to a McKinsey study, women stand to inherit or will have built $30 trillion in personal wealth by the end of 2030. Those of us in the industry cannot sit by and wait until this transfer has occurred to reach this clientele. We need to already be in the space and be building relationships with these future wealth clients, and it has to be done in a way that acknowledges the accomplishments this group is bringing to the table.
You often speak on the concept of closing the wealth gap and creating wealth parity in America. How can we take the first steps toward this?
Wealth begets wealth. Having a strong financial head start is often a necessary steppingstone to success. Therefore, it is essential that historically underrepresented communities understand the importance of building generational wealth. That starts with education and creating an environment where clients want to engage in these types of discussions in a way that feels natural and part of building a relationship versus just participating in a transaction.
How does financial literacy come into play?
It is a critical foundation. Financial literacy needs to be part of our everyday vocabulary from a young age. If a doctor starts with basic biology courses in high school, the same must be true for personal financial education. Financial literacy should be a required course in high school, in my opinion. As an individual’s wealth grows, so does the breadth and depth of the education, and here is where we in the wealth management industry come in. For example, when we are serving as a trustee, our role ought to include educating and preparing the next generation of wealth holders and decision-makers. If the beneficiary is to become a co-trustee at some point, is she prepared for the responsibilities? Helping clients think through these questions and the implications of the answers is essential.
What are the key trends you’re seeing in wealth planning today?
Technology is playing a growing role in our industry. With the emergence of better-integrated systems — whether it’s CRM, client portal, wealth tech solutions and so on — technology is able to streamline a lot of what advisers do and how they get their information to do their job.
With data and information more readily available, advisers will be freed up to do more of the “thinking” and relationship management, which will help us tailor and customize both advice and client experience. In a world where investments continue to be commoditized — like the democratization of alternative investments — other aspects of wealth management will follow suit. Even the traditional highly technical and personalized nature of planning will become somewhat commoditized. The organization that embraces technology in a way that provides leverage and elevates people to achieve their best financial outcomes will be the winners of the future. That’s what I’m striving for, and it’s an exciting place to be.