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Key insights from the 2016 Hearsay Innovation Summit

In May, we hosted our 4th annual Innovation Summit in Silicon Valley for more than 100 CEOs as well as sales, marketing, IT, and compliance leaders. From Morgan Stanley Wealth Management co-head Shelley O’Connor to Palantir founder Joe Lonsdale and a panel of roboadvice startups, we had a terrific two-day dialogue on key industry trends and how to adapt to the new normal. We had a great speaker line-up and hope you will find some of our highlights insightful.
Shelley O’Connor, Co-CEO, Morgan Stanley Wealth Management
• The vast majority of people, even millennials and Gen Z clients, want an advisor, a human being they can call on, trust, and hold accountable. But they may not want to meet in person every time (or ever).
• Morgan Stanley is doubling down on their human advisors and will give them tools to free their time to focus on the human touch valued by clients.
Vik Sohoni, Partner, and Brant Carson, Partner, McKinsey & Co. 
• Digital marketing and content are more important than ever, as customers are researching online before even talking with an advisor.
• It will always be important to meet with client in person, but it’s imperative for agents to become digitally-enabled and savvy.

John Fishback, Managing Director, CEB
John Fishback, Managing Director, CEB

John Fishback, Managing Director, CEB
• A large-scale global research study showed digital conveniences like a mobile app or check deposit were seen as table stakes and did not drive loyalty. Overall, using digital did not incrementally increase loyalty, but a lack of digital drove disloyalty.
• According to the study, the greatest factor driving loyalty was the presence of an advisor or banker when their client experienced a moment of truth, and the ability of the advisor to drive the client to take an action he or she would not have otherwise taken in that situation.
Clara Shih, CEO and founder of Hearsay Social
• Each step of the advisor-client journey now deeply intersects with digital, from discovery and research/validation to consideration, loyalty, and referrals.
• Firms must digitally train and equip their advisors to be findable, responsive, and in touch via social, mobile, and digital, and provide a technology platform that’s easy to use especially for the late-career technophobes who can be your top producers.
Chip Roame, Tiburon Advisors
• There’s incredible hype around robo-advisors, which have raised $540M in venture funding. In reality, they have gathered just $7.2B AUM and each generate less than $10M in revenue.
• The largest “robo” is actually Financial Engines, which grew $10.5B AUM in 1H/15. Their net flows exceed all robo-advisors’ AUM combined. Vanguard Group’s Personal Advisor Services business (in pilot mode) has already gathered $31B, with no paid advertising.
> View slides from this session
Ken Lin, CEO & founder, Credit Karma
Moderated by Noah Wintroub, Vice Chairman, JPMorgan
• Credit Karma is an eight-year-old tech “unicorn” valued at $3.5B that began with a simple vision: Give consumers their credit reports for free. It has blossomed into the leading marketplace for credit cards, loans, and more serving one in five Americans, with a focus on millennials.
• The secret to their success has been saying no to seductive short-term revenue opportunities (like selling member data) and thinking longer term for customer loyalty.
Mike Sha, CEO & founder, SigFig; Bo Lu, CEO & founder, FutureAdvisor (BlackRock); Naureen Hassan, Chief Digital Officer, Morgan Stanley
Mike Sha, CEO & founder, SigFig; Bo Lu, CEO & founder, FutureAdvisor (BlackRock); Naureen Hassan, Chief Digital Officer, Morgan Stanley

Mike Sha, CEO & founder, SigFig
Bo Lu, CEO & founder, FutureAdvisor (now part of BlackRock)
Naureen Hassan, Chief Digital Officer, Morgan Stanley
• Three different models on stage: Standalone startup SigFig, a startup acquired by a big firm but run independently FutureAdvisor, and traditional 80-year-old brokerage Morgan Stanley.
• Robos will expand the market to serve people through a purely robo model and a hybrid model in which advisors leverage robo technology along with a more traditional approach.
• A few days later, SigFig announced major investment and partnership with UBS.
Amit Jhawar, COO, Braintree Payments (part of PayPal)
Moderated by Deepa Seetharaman, Wall Street Journal
• Braintree recently led $30M investment round and partnership with Acorns, a “micro-investing app” for millennials. How it works: Rounds up every purchase to the nearest dollar and invests the extra money in ETFs.
• Most millennials don’t have enough money set aside or saved to invest, so this is a way for them to easily begin investing. PayPal is expanding into adjacent areas in financial services. It’s no longer just a payments company.
Jon Sakoda, General Partner, New Enterprise Associates
Jon Sakoda, General Partner, New Enterprise Associates

Jon Sakoda, General Partner, New Enterprise Associates
• NEA is the largest and oldest venture capital fund, $1B AUM
• The biggest challenge facing financial firms is the unbundling of their products and services by thousands of startups — which makes it difficult to know who their competitor is because there are thousands of competitors across the breadth of what they do and provide for clients. The solution for many firms has been to buy and partner with these point competitors rather than trying to build everything themselves.
> View slides from this session
Watch complete the videos from the event here:

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Clara Shih

A pioneer in the social media industry, Clara developed the first social business application in 2007. Her latest book, The Social Business Imperative, is a Wall Street Journal-featured bestseller. She is a member of the Starbucks board of directors.

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