Seven Questions with Tony Sirianni: BlackRock’s Elizabeth Koehler
Why did you get into the wealth management business?
As a young adult, I witnessed how the advice of a financial professional brought family members more confidence as they navigated major life events. Helping people achieve financial well-being and reach their life goals – for family, for themselves, for communities – has always seemed a very worthy purpose in my mind. Education is such an important element of that, from partnering with advisors to make sense of the markets and portfolio trends, to providing them with tools for clearer conversations with their clients as they overcome potential mental and emotional investing hurdles. I want to continue doing my part to offer investors more confidence.
In looking at the changes over the last 15 years, which, in your opinion, have been the most challenging to the wealth management business? Conversely, what have been the most exciting and positive?
Advisors face a growing ‘capacity crisis’ today, and within a more complex landscape. Many spend nearly two-thirds of their time on administrative tasks and investment management, leaving them with just one-third to devote to their clients. All the while, investors’ retirement income gaps continue to grow, across all wealth demographics. These forces have significant implications for how we deliver to financial advisors the outcomes and services they need.
In terms of what’s exciting, these challenges can also present opportunities to partner with advisors in order to help address critical client needs. For example, BlackRock seeks to address the income gap in three ways: with portfolio construction insights and risk management expertise through our technology Aladdin®; with investment performance and value in a fiduciary fee-based world; and with tools to assess and address gaps while there’s still time to plan for their clients.
We’re also helping advisors address the capacity crisis through a repeatable, scalable process for portfolio construction, practice management and client service resources. That ultimately frees up more time delivering for their clients. Implementing a disciplined process may also accelerate advisors’ moves to teams, which when done effectively can offer benefits for advisors and differentiated service for their clients.
How has technology advanced this industry?
Technology is both empowering and disrupting our industry, and rewards those who can evolve and leverage its potential. It’s no longer human versus machine, but human AND machine. For example, advisors who incorporate technology across their business – from operations to compliance to digital marketing and robo advice — can become more efficient and drive more organic asset growth.
More broadly, technology is driving greater transparency, mass customization of client portfolios, and better client experiences. So, at the portfolio construction level, technology has helped us differentiate persistent alpha and identify risks. Investing itself has become more data-driven, helping us isolate signals like factors or ESG.
In terms of distribution, the industry is getting more and more frictionless, and there’s a greater focus on fees and regulation. We see the continued growth of models and a move to mass customization. Finally, technology is helping to improve the overall client service experience with virtual and on-demand services, as investors increasingly want to interact with their investments much as they do with other decision-making activities in their lives.
How has your company adapted to address the rapidly changing wealth management landscape?
First and foremost, we focus a lot on living our firm’s purpose. Starting with our CEO Larry Fink, BlackRock has rallied around our mission to help more and more people invest in their financial well-being. That mission is expressed in many ways, including a dedicated focus on tech and talent to drive product development and construction to best meet our clients’ needs.
Modern advisors are facing challenges that their predecessors didn’t, including fighting the perception that their work isn’t worth paying for. They also have to combat the 24/7 news cycle, which makes it even harder to keep clients focused on the long haul, instead of reacting. We want to provide a full menu of solutions that advisors can draw on to demonstrate their value. BlackRock overall has done a lot to erase the outmoded divide between active and passive. We want to make it easy for advisors to choose the best tool for the job. In a changing industry, BlackRock seeks to offer a wider set of tools to use in client portfolios.
What part of the advisor business will most likely not change?
The need for advice – no matter which generation you belong to, people have personal and family goals that require financial planning. They want someone to listen, ask good questions and coach them through life’s biggest moments and aspirations.
What may change is how you communicate that advice to different clients. For the millennial investor, while most services need to be tech-enabled, there will still be demand for advice and a strong focus on purpose. At the other end of the spectrum, you have older clients and their families who need you more than ever in the face of potential cognitive decline as these clients age. People are living longer, and their lives get more complicated.
What three things differentiate your company from the competition?
If I had to choose just three, I’d say that BlackRock’s big differentiators are first, our singular client focus. We have more than $6.9 trillion in assets entrusted to us by clients today, and we do no proprietary trading. In other words, your clients’ best interests are our best interests.
Second is the quality, value and choice of our products and services. We provide investment solutions for every need, across alpha, index, factor and managed portfolio solutions1. We want advisors to be able to invest their way, guided by our local team of experts. We see ourselves as true consultants, focused on delivering value by supporting advisors’ distinct growth goals. This includes helping them build stronger investment approaches that let them spend more time on enhancing their business efficiencies and servicing clients.
Third, I would highlight BlackRock’s global leadership in risk management, built on our integrated technology platform Aladdin®. For advisors, Aladdin Wealth is an industry-leading platform that empowers them with sophisticated portfolio construction and risk analysis capabilities to enhance their engagement with their clients. It brings clarity, deepens client relationships, and is enabling the transformation of wealth managers globally.
What advice would you give to someone just entering the wealth management business?
Change will happen whether you like it or not. When I started in the business, robo-advisors didn’t exist, fund costs were higher, and the dominant business model was transaction-based. It’s obviously very different now. So you’ll wanting to always be learning, to stay on top of where the markets and our industry our headed. Another thing to know is that this 10-year bull run won’t last forever. When markets turn down, your work will get harder and your clients will need you more than ever. Finally, if you make client service your North Star, you’ll never get lost.
What are your interests and hobbies outside of your day job?
I have two sons, seven and five, and I love spending time with them and watching their soccer and baseball games. I’m currently pursuing a master’s program in applied positive psychology and organizational well-being, which is fascinating and engaging, and making me a better leader. I also serve on the board of a nonprofit that helps support families in need in our community to achieve more food and housing security. So, my plate is full, but I feel fortunate to have these types of opportunities both at work and in my community.
Elizabeth is a keynote speaker at AdvisorHub’s November 19th Industry in Transition Summit in NYC — Learn more.
1BlackRock offers investments across a comprehensive range of asset classes and exposures, addressing investor needs with respect to growth, income, and capital preservation.