Talking about diversity in financial services isn't anything new. Whether we're focusing on gender, race, socioeconomic backgrounds - diversity has been the gorilla in the room for the last decade publicly, and since the beginning of the industry for those who've experienced discrimination.
In recent years, trade media headlines have made a concerted effort to take a look behind the curtain and talk about the real side of gender disparity. Brave women and men who've climbed their way to the top despite the industry's unforgiving statistics, have grabbed our shoulders and shaken us out of ignorance with their powerful op-eds and heartfelt presentations at industry conferences.
But here's where the industry gets tripped up - executive teams know they need to attract more women and people of color to their firm, and they fully understand the positive business implications of doing so. But then, they ask themselves: where do we start?
This question of where do we start, I believe, is one of the reasons we're seeing a whole lot of "talking," and not as much "doing." Raising awareness is an important first step, but where do the firms take it from there?
As an advisor recruiting specialist, firms usually come to me to accomplish one thing: hire the right people. So, let's shift that advice to be more specific: if firms want to encourage diversity within their teams and be more inclusive overall, what do they need to do?
When you sit down in a sales pitch and talk about your firm, what is the first thing you focus on? Is it your size, brand recognition or growth trajectory? If so, you're probably not going to get anywhere with the folks you're looking to hire.
As an advisory firm, your only true differentiator is what you offer your advisors, not the other way around. Advisors are our industry's greatest asset - and as such, it's important to place most of your focus on what you can do to help them succeed.
If you want to create a more diverse workplace, put your money where your mouth is and make intentional steps to help women and people of color succeed. Do you have a strictly enforced company-wide sexual harassment and non-discrimination policy? Does your team hold town halls or open discussions about such policies, wherein male advocates can lead by example? Do you vet your strategic partners to make sure they have the same?
If your firm already has these initiatives in place, be public about it. Let these advisors know that you can offer a safe work environment for them, one that fosters growth and opportunity. This is part of your value as a firm, and this is what you need to lead with.
We're all human, and part of being human is that we're engrained with subconscious biases. I believe that the firms that own up to those biases are the ones who can make actionable steps to erase them.
So, what is one way to erase gender and racial biases? Turn to the only thing without it: technology.
Using recruitment platforms and technology as a way to neutralize the playing field is one way that executive teams can ensure they're hiring based on experience, first. It also enables them to reach corners of the marketplace they otherwise wouldn't have - which, in itself, is another step towards inclusion.
As a white male in a white male dominated industry, I am the first to admit that sometimes, talking about diversity is not always the most comfortable. But what I say to that is: too bad, it's time to get uncomfortable.
Shiny initiatives are great for headlines and press releases, but as male allies to women and people of color in our industry, we have a bigger responsibility. We need to take our privilege and bring everyone else along - be the person who's doing something, not just talking about it. Here are some ways you can take action:
There are amazing organizations in our industry that are doing important things to help tilt the diversity scales in the right direction. Females and Finance, for example, is an interactive online community comprised of 2,000+ women and male allies who come together to bring conversation and candor to industry recruitment, training, advancement, and retention.
When you find these organizations, ask them: What can I do for you? Offer your resources, experience and mentorship capabilities to help them succeed. Because in the end, we're all better together.
If you're attending a conference and there is a breakout session focused on female advisors, chances are, the room will be mostly filled with female advisors - we need to change this. Because those insights are crucial for the men in our industry to hear.
Attend the sessions. Ask questions. Once again, learn what you can do to help.
Countless studies have shown that the next generation of financial advisors care more than ever about diversity and inclusion in the workplace. These young minds will be (and already are) critical to shaping the future of our industry. But we need to do more than lecture at them about how great of a career path financial services is. We need to show them by giving them all of the opportunities available once they get here.
I encourage firms to carve out the time and other resources necessary to bridge the generational gap - and then make those initiatives part of your firm's value propositions so advisors you want to hire can get on board, as well.
The time to help women and minorities in our industry to lean in, is now. In order to recruit a diverse team of experienced advisors, consider what you're actually doing at the firm level to instill change and make your environment inclusive. And then scream it from the rooftops - because everyone deserves to succeed in a career they love.
I believe there is an epidemic of untapped potential in our industry.
Let me explain. Twenty years ago, I was a rookie recruiter who'd been thrown into the financial services space with the task of placing discontent brokers at firms looking to attract more talent. My first day on the job, I was given - like most recruiters at the time - only three things in my arsenal: a phone, a contact list, and a script. And then, I promptly set my finger down on the first row and dialed the number.
Folks, that first phone call changed the entire trajectory of my career. Because when the Merrill Lynch advisor picked up the phone, instead of pitching him about how great the firm was and how lucky he'd be to work there, my gut told me to go off-script. I asked him:
I half expected him to either write me off or hang up the phone but instead, there was silence. After a couple of seconds, he asked me to repeat myself. I said, "What's missing in your career, and what do you need to fix it?"
To my surprise, the advisor told me he'd never heard anyone ask him that before. Never had a recruiter asked him what he wanted, or what would make him happy. They'd always tried to sell the benefits of working at their firm, on the basis of revenue growth, innovative tech enhancements or national brand notoriety - but never stopped to ask what the advisor even wanted in the first place.
That was the first advisor I ever placed, and it's a phone call I've never forgotten. But the moral of the story isn't that recruiters are doing it all wrong - it's that you, advisor, have likely also been conditioned to overlook "what's missing" in your own career.
So, I'll say it again. I believe there is an epidemic of untapped potential in our industry. And the only anecdote is for advisors to realize what their potential is in the first place - if only they'd stop and consider what ignites their joy and fulfills their lives. If we made a more concerted effort, as an industry, to dig into the heart of why we get up and go to work each day, I promise there would be a brighter future for all of us - including the clients we work so hard for.
I would challenge our peer group by saying that when it comes to career satisfaction and professional development, we're approaching it all completely backwards. Instead of leading with the advisor as the prized asset, we're assuming that M&A wins and Top Advisor Lists automatically qualify flashy firms as a great place for every advisor to further their career. And advisors: you're buying into it because you've been conditioned not to advocate for your soft skills, your desires, and your personal wellbeing.
It's like going to the doctor's office and, instead of asking you what your symptoms are and listening to how you feel, the doctor takes one look at your chart and prescribes you with their go-to antibiotic (likely the one that would make them the highest return). Your symptoms might be somewhat alleviated, but without knowing and addressing exactly what the root cause of the problem is, you're going to keep getting sick. And each time, the MD will promise you you're "doing the right things" and "to just hang in there".
That's what happens when we fail to address the root causes of advisor dissatisfaction. I often say it's a condition of Leading with Ego vs. Leading with Purpose. Our Ego prioritizes getting our name on the door, but our purpose prioritizes whether we're even happy walking through the door in the first place.
I'm not saying advisors are wholly unhappy - or that big-name firms aren't the best destination for the right individuals (after all, they're clearly doing many things right to achieve the growth). But as someone who's worked as a recruiter since that first phone call 20 years ago, I can say it's on our shoulders to better educate advisors on how to look inward. We need to ask them the right questions, and get to know our clients by their Purpose, first. Only then will we see a significant increase in long-term retention, and a workforce that loves what they do.
You deserve to advocate for your entire self, not just your professional one. And most of all, your clients deserve it.
I launched FA Match to fulfill a promise to you, advisor. That we'll run our business from a place of Purpose, so you can ignite yours.
There are many of you who are outspokenly happy with the choices you've made and the career path you've chosen - but for the silent ones, the advisors who don't feel fulfilled, we promise to always lead with the question, What's Missing? And be there to fill the void.
Here at FA Match, we're not in the driver's seat, and neither are the firms. You are - we're just the GPS to help you reach your destination.
Yours with Purpose,
CEO and co-founder, FA Match
We're proud to announce that FA Match is now a founding member of Females and Finance, an organization committed to leveraging recruitment, training, advancement, and retention for women and underrepresented individuals across the wealth management industry.
As a partner of Females and Finance, we are committed to providing recruitment-specific training and resources to their 2,000+ members. Our goal is to help break down the barriers that exist in our industry for women and underrepresented communities to thrive, by equipping them with information and tools that can address their specific needs and connect them to FA Match's network of partners, advisors, and firms.
"I'm so proud to be a male ally to the leaders, members, and partners of Females and Finance," says FA Match CEO and co-founder Ryan Shanks. "Simply stated, our workplaces should reflect the people we serve -- and if they don't, we're doing ourselves and clients a disservice. I hope that through this partnership, FA Match can play a role in bringing the unique talents and perspectives of women and culturally diverse advisors to the forefront of our industry."
FA Match was founded on the principle that advisors are the heart of our industry, and as such, deserve the support, opportunities, and guidance to help them find and live their purpose. Organizations like Females & Finance are instrumental in helping lift the entire industry into a brighter future.
Founded in 2017 by Sheryl Brown, Females and Finance is an international membership organization that offers discounted rates to other industry platforms and memberships, training resources, business coaching, financial literacy resources, community meetups, and so much more.
"FA Match has it right - career options start with relationships," says Brown. "At Females and Finance, a relationship with Ryan Shanks and his team was the perfect match toward our company's pillars of excellence. With our fast-growing membership base of more than 2,000 women and men, adding a career-advancing platform like FA Match supports our efforts in providing quality recruitment resources and advancement opportunities. We are excited about this partnership!"
If you'd like to learn more about how to join Females and Finance, visit https://femalesandfinance.com.
If you're not already a user of FA Match, we encourage you to check out how we're helping purpose-driven firms connect with talented advisors via our platform. Visit the homepage to learn more.
I recently had the pleasure of writing an article for WealthManagement.com on a topic I feel strongly about, one that I believe is a major factor in advisors making rash decisions when it comes to joining firms. I call the phenomenon "Recruitment Inflation," which happens when firms over-inflate their successes by touting the number of new advisors they've brought on board, often misdirecting advisors who believe more = more.
Here's an excerpt from the article, where I discuss what Recruitment Inflation is, why it is detrimental to our industry, and how we can move forward in a different direction to drive change and put advisors on the right path. For the full article, visit www.wealthmanagement.com.
[...] It's a moniker of success in our M&A-driven community. We often don't see beyond the "big number"; we're so obsessed with the rate of growth that we forget to ask ourselves, "What's the rate of advisor satisfaction?"
I call this "recruitment inflation," and it's a common reason advisors find themselves misplaced in their current roles. Recruiters tout head count as a selling point, averting advisors' attention away from the revolving door behind them.
This produces only one result: Advisors aren't fooled for long and eventually seek happiness elsewhere. As such, I believe addressing the root cause of retention issues and advisor dissatisfaction, rather than inflating successes, is how we're going to move forward as an industry.
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.
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:
Ego: "Our firm has invested millions of dollars to deploy the most innovative technology tools available in the marketplace."
This phrase raises my ego-flags. It's entirely anchored around why the firm is superior among its competition and it doesn't tell me how this impacts advisors. Here's how this statement can be rephrased to a purpose-driven value proposition:
Purpose: "Our firm invests in independence. We support entrepreneurial-minded advisors by giving them robust and flexible technology options, so they can create a customized tech stack that works for them."
Ego: "We recently underwent a huge office expansion in the heart of downtown, complete with an in-office gym and 20-story views."
My first question is, why have you expanded? Do you really need that much office space or is your company more focused on how it's perceived on the outside? Firms that focus on their physical location as a value proposition need to have tangible reasons why the space benefits the way advisors work and live. Otherwise, it's just ego. Here's an example of a purpose-driven statement about location:
Purpose: "We've thoughtfully created a work environment for our employees that fosters collaboration, teamwork, and healthy living. Our gym is free to all teammates and we encourage meetings to be conducted in our open, city-view spaces to inspire creativity."
Ego: "Our firm saw rapid growth over the last year, adding 300 advisors nationwide."
Firms like to beat their chest about how many advisors they've added - but the true tell of your success is how many good teammates you've kept. Otherwise, you could just be a revolving door for advisors. Talk instead about why recent growth is beneficial for advisors' day-to-day at your company. Here's the same statement, revised:
Purpose: "Last year we welcomed 300 new advisors to our team. Continued growth means more resources at our advisors' fingertips to better serve their clients and focus on the practice areas most important to them. That is why we've seen a consistent 98% advisor retention rate."
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.
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:
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:
Greater exposure: The "big fish, small pond" mentality can be a major value proposition for advisors looking to join your firm. In an environment where each and every advisor is seen, the results they produce for the greater team can be easily traced right back to them. This transparency can be refreshing for those coming from a larger entity.
Decision-making power: Advisors on your team all get a seat at the table. This benefit is huge, especially for advisors who have more of an entrepreneur mindset.
Professional growth: A smaller team equals more "hats" per person and more experience for everyone. You'll want to be clear about the diverse responsibilities and career training candidates will be able to take advantage of by joining your firm.
Equity: If your firm doesn't already offer equity options to employees who are rolling up their sleeves and helping to build the company brick-by-brick, consider doing so. This can be a tremendous value-add for candidates and is a tangible offering that shows commitment to your team.
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.
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.
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.
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.
Waste time and money. While your sales team has endless, one-sided conversations with advisors that end in no transaction, your firm continues to underserve your clients.
Watch advisors leverage your offers against competitors'. If your interactions with prospects aren't personal or genuine, or you don't articulate what's in it for them besides the check, you can't expect them to be loyal to you.
Stay stuck inside the box. If you park your boat at a fishing hole where you know you'll only catch trout, you'll only ever catch trout. Likewise, near-sighted hiring objectives tend to overlook out-of-the-box solutions.
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.
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.
Do Your Homework: Be aware of what your competitors are doing. How are they successful? How do you stack up? And most of all, know what the rest of the industry is saying about your firm, because their perception is critical to attracting the right team.
Ask the Hard Questions: Who are you? What do you provide your advisors? How does what you provide your advisors benefit their clients? Once you become clear on these answers, you can begin narrowing down your specific value propositions for advisors you wish to hire: like employee benefits, mentorship opportunities, and growth potential.
Always Re Recruiting: Once you've got your value propositions clearly outlined, always be willing to take a meeting with someone even if you're not currently hiring. This will get you outside your current box and will foster mutually-beneficial opportunities with advisors that never would have come your way had you waited for the "right time" to search.
Make Your Passion "Recruitable": If you run a business and it is the love of your life, turn your passion into value propositions for advisors. For example, if you love helping advisors grow their personal brand, offer marketing services that can help put them on the map and turn them into thought leaders. Whatever it is, make sure you genuinely enjoy what it is you're selling - because that realness will make the sale.
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.
© 2019, FA Match, LLC