Is Your Firm Leading with Purpose or Ego

Is Your Firm Leading with Purpose or Ego?

By Ryan Shanks, Co-founder and CEO

In recent years, companies everywhere have worked hard to adjust to a huge spike in purpose-driven consumerism. Research tells us that across the world, 63% of consumers prefer to buy goods from companies that reflect their personal beliefs. This is a monumental number, and is a telling statistic proving people today are prioritizing their own wellness and values before considering a transaction.

Similarly, recruiting good talent is a transaction in which it's become increasingly important for both parties to share a common set of values. As a firm, if you're not leading your growth strategy with purpose, you are leading with ego. And ego will never produce the results you're looking for.

In my latest article, "Small Firms Can Make a Big Impact with the Right Advisors" I wrote how firms that lead with purpose will be better positioned to attract the right talent to their firm. I want to expand on how they can take this concept and bring it into practice.

Purpose vs. Ego

When I talk to firms about their struggle finding and retaining new talent, I can tell in a matter of minutes if their difficulty stems from ego. How? They spend our entire conversation touting ways they excel over the competition, rather than how they're helping their advisors succeed.

I believe one reason this happens is because of a misconception that having a "mission" is the same as having a "purpose." But these are very different things. Every company has a mission - it's what they're trying to solve or accomplish. But not every company has an articulate purpose - which is why they are in business in the first place.

So, how can you play to the strengths of your firm while remaining advisor-centric? Here are a few examples of common ego-driven statements, and how simply leading instead with purpose can completely change the perception:

At our core, we each have a purpose for doing what we do every day. The same holds true for businesses and the talent you're looking to attract. When we lead with purpose, we can't go wrong.

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The Two-Way Street of Advisor Recruiting

Small Firms Can Make a Big Impact with the Right Advisors

By Ryan Shanks, Co-founder and CEO

If you visit the home page of your favorite industry news publication right now, you're likely to see a story announcing a significant merger or acquisition. The M&A activity is hard to miss - and it's inspired a few major camps of thought regarding the future of our industry. One of the most important conversations revolves around how smaller firms can "stay competitive" in a space that's so rapidly evolving.

I don't believe the strong foothold of boutique firms - which DeVoe & Company categorizes as $250MM AUM or less - is going away at all. In fact, I don't even think "staying competitive" is the conversation we should be having. Because if smaller firms focus on the value they offer their advisors, rather than simply going head-to-head against larger entities with bigger pockets, they'll be positioned to build winning teams stacked with talented advisors who see the many benefits of joining a smaller firm. And this will keep them thriving. (See more about how to define your value in my previous article, The Two-Way Street of Advisor Recruiting)

In order to build powerhouse teams that drive incredible results, I often tell boutique firms to focus on these three golden rules:

1. Play to Your Strengths

We can't overlook the fact that so many advisors out there prefer a boutique firm versus an enterprise, and vice versa. It simply comes down to personal preference.

So, small firms, instead of focusing on the resources you don't have, play to the strengths of your business and the value you provide advisors because of your size. These sellable factors include:

2. Don't Over-hire Support Staff

I've seen it time and time again - partners at a boutique firm allocate a huge portion of their revenue towards hiring support staff they don't need. This usually happens because they've recently come from larger firms where these roles are needed. But in this new environment, many of the same roles can be facilitated more efficiently and more cost effectively with the right technology tools. Make sure you shop your tech wisely; try to find a platform that does many things well and can offer a comprehensive service, rather than building a Frankenstein tech stack with many different products.

3. Purpose Before Ego. Always.

Spending money on a giant, shiny office space may make you feel great, but if it sits half empty for 15 years, it's not serving anyone except your own ego. When you're trying to build a team that's lean and mean, these wasted extravagancies will quickly set you back. No matter what size your firm is, if you put the greater purpose of your firm above all else (serving clients and making their most important goals a reality), then you'll attract advisors who will share and help further your mission. Investing in areas that directly impact your team will drive success.

The inevitability of industry consolidation is worth the media attention, but it doesn't signal the end for you smaller firms out there - as long as you can measure your goals and value offerings, activate on hiring advisors who share your beliefs, and are mindful of your time and intentions. A diverse and dynamic industry is a beautiful thing.

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The Two-Way Street of Advisor Recruiting

The Two-Way Street of Advisor Recruiting

By Ryan Shanks, Co-founder and CEO

For the last 20 years, I've worked as a recruiter for financial advisors under the sole belief that building a winning team can happen only when the firm and the advisor are committed to providing equal value to one another.

Unfortunately, not all advisory firms think about recruiting in this way. Some are understandably so concerned with their bottom line, that they mistakenly approach hiring as a one-sided solution to solve their growing pains.

A Two-way Street

I sit as the driver on both sides of a two-way street, so when I hear these one-sided search queries, they usually bring me to a screeching halt. Why? Because they're all rooted in the notion that the firm holds all the value, and the advisor is just another pawn in the game to stay competitive.

These companies approach the conversation saying, "We've built this amazing business model. We want to bring people in so they, too, can see the value of what we've created!" The problem with this notion is that value is completely subjective, and if you view the entire advisor landscape as interchangeable solutions to raise your profit margins, you'll just end up creating a revolving door for your advisors.

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A Success Story

I can assure you that when a firm finally shifts their perspective to providing value for the advisors, the result is a win-win for everyone involved.

Years ago, I worked with a California-based RIA who'd grown from $350 million to $1.4 billion in AUM within an 18-month period. They'd done so by fostering a "Wild West" type business model. Their main proposition for advisors was that they could keep doing what they were doing - no structure, all of the flexibility.

There's a reason the Wild West eventually straightened out. You can't sustain it. As this firm began to grow, so did their inefficiencies. We decided together that they needed to change their business model if they were ever going to scale and hire the right people. "But, we just promised our advisors they could have autonomy over their processes! What if they all leave?" A relevant concern, but without action, the firm could never grow into a long-term healthy business.

The principals spent time restructuring the model based on the scalable value they'd be able to provide each one of their advisors. While some weren't happy with the changes and inevitably left, many understood the need for change and appreciated the commitment this firm had to their own individual growth. The moral is: when you focus on the value for the advisor instead of the rapid growth of your firm, and stay true to that value-add, you'll evolve in ways that support a long-term vision rather than an immediate fix.

Knowing your value

You already have the vision for the future of your firm. You just need to refocus your recruiting efforts to build a team that will keep you profitable, competitive and innovating - and then shower that value back onto your team.

Your firm's dream team is out there, but it's about repositioning your hiring objectives and shifting your point of view. If you hire for the firm of tomorrow instead of the firm of today, you'll always find success.

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