Many people don’t know this (guess they will now), but in my early 20s I was diagnosed with a serious “woman” issue. I went to see a world-renowned fertility doctor in Omaha, Neb. That doctor, for me and for my future, was nothing less than an angel. What has always stuck in my mind about his practice was that when I visited his office he didn’t have any of his myriad diplomas or honors up on his walls—anywhere. Instead, all along the lengthy hallway from the reception area back to the examining rooms were hundreds and hundreds of photographs of mothers and families with the children that he and his team had made possible. Thinking about it still brings tears to my eyes. A nurse told me: “This wall is a constant reminder of why I come to work every day.”
I thought about that wall again, recently, as I’ve been summarizing everything I’ve learned over the years about what makes advisory firms great. One of the key things about great firms is that the owners and their employees have passion for what they do. The good news is that virtually every independent advisor I’ve ever met has passion to provide his or her clients with the best financial care possible. They fully understand the importance and the responsibility of what they do for their clients, and their clients’ dependents: That children and grandchildren will go to college, the sick will get the health care they need, the elderly will get nursing care, and clients will live and retire with peace of mind, all because of what their advisor has helped them to do.
Unfortunately though, as good as most independent advisors are at taking care of their clients, in my experience they are equally bad at communicating and transferring their passion to their employees. In fact, the ability to instill their sense of passion for what they do in their employees is one of the keys to creating great practices. Because, without passion, employees will never be great, and great employees make great advisory firms.
One of the biggest challenges that independent advisors have today is that the vast majority of firm owners were never employees in an independent advisory firm themselves. Most of the time they were stockbrokers, insurance agents, or accountants who, because of their passion for their clients, decided to make the leap to creating their own independent firm. They have no idea what it is like working in their firm, and working for someone else in an independent firm.
Consequently, owner/advisors tend to make assumptions about what working in their firms is like. For instance, firm owners typically assume that their employees will automatically have passion for their jobs and expect their employees to have that passion. What they don’t understand is that coming to work everyday in your own firm, working with your own clients, and seeing the tangible results of the advice you give are all easy things to have passion about.
On the other hand, coming to work in someone else’s firm, having little or no direct contact with the clients, and infrequently or never seeing the results of what you do is a lot harder to feel passionate about. Instilling passion in firm employees requires a concerted effort on the part of owner/advisors.
Most owner/advisors’ solution for a lack of passion in their staff is to try to hire passionate people. This is another example of the “hire great employees” syndrome that I’ve written about before. It is doomed to failure for two reasons. First, it’s very hard to spot passionate employees in the screening and interviewing process. Everyone knows that you want to appear passionate and motivated in a job interview, so almost everyone does. In my experience, that rarely carries over for the long term once the job is offered and accepted.
One group of prospective employees that you can count on to be passionate is young advisors fresh out of university financial planning programs. Most of them started out in business school or accounting programs, and migrated to financial planning because they were attracted to the idea of helping real people and real clients—even though planning programs have less prestige on campus.
Here comes hiring failure No. 2: In my own tracking of the people I went to financial planning school with, and the many young planners I’ve met and stayed in contact with over the past 11 years, over 40% are no longer in the financial industry. “That’s because most of them went to work for brokerage firms or other non-client-centered financial institutions,” I hear you say. In the old days, that might have been true, but in my generation over half of the college graduates went straight to independent advisory firms.
Again, according to my tracking, the drop-out rate at independent firms is about the same as institutions: 40%. Which means that not only do independent advisory firms fail to instill passion in their employees, many of them actually take already passionate young advisors and squeeze the passion out of them to the extent that they leave the industry. Rare indeed is the employee who can maintain their passion for the job in a non-passionate environment. If you can’t even maintain the passion of young advisors, how can you hope to instill passion in other employees?
Passion is one thing you can’t hire. Great advisory firms create what I call “a culture of passion.” That is, a culture that motivates, encourages and inspires employees to be passionate about their jobs and their firm. Then, it doesn’t matter if you hire passionate new employees or not: They will become passionate simply by working at your company.
I know this may sound idealistic, but believe me, it’s not. In fact, it’s a lot easier than you think. That’s because advisory firms are already doing good things for their clients—things that most people can get passionate about—and their owners are already passionate about it. So, it’s largely a matter of communicating and demonstrating that passion and value to one’s employees. In my experience, great advisory firms instill three kinds of passion in their employees, each of which will translate directly into increased motivation and job performance:
1. A Passion for the Job. As I said earlier, financial advisors understand how important what they do is: They need to make their employees understand that, too. I’m not a big believer in owner/advisors making grand speeches, but if that’s your inclination, a heartfelt description of why you became an advisor certainly couldn’t hurt.
Of more importance, in my view, is to frequently point out that what you’re all doing at your firm is important: that you’re providing real value to real people. You don’t have to beat your employees over the head with it. Subtle and frequent reminders can be very powerful—like the pictures on the wall of the doctor’s office. In fact, a similar wall in your office, with pictures of your clients and their families (with their permission) would go a long way to connecting employees’ jobs with real people. So how would owner/advisors regularly share what makes it all worthwhile? One client’s son just got into Harvard because we helped them put aside the money 20 years ago. Another client’s mother can stay in her house thanks to the LTC policy we got for her. You get the picture.
2. Passion for the Firm. It’s also important that employees understand that all those wonderful things you do for clients couldn’t get done without them, too. This is not a one or two person show with a supporting cast. Make sure that everyone at your firm knows how even the seemingly small tasks they do in some way enables your firm to make your clients lives better. One of my clients got copies of all his staff’s diplomas and mounted them on the wall of the conference room where he does his client meetings. The message: There is a lot of talent here, all working to take care of our clients.
3. Passion for the Team. When things get really tough, as they did at many advisory firms during the past few years, it’s easy to start to lose the passion for the firm, or even the job. But the one thing that’s always in front of your employees is the people they work with. They are just as dependent upon each other to get the job done, as are the clients. At the end of the day, the success or failure of the firm and its ability to help the clients depends on everyone working together. To instill this kind of passion, be sure that everyone knows what everyone else does and how it affects their job. Get their input when designing their job, so they can own it. Everyone has a stake in working together to help the clients.
The success of every advisory firm depends on each employee being just as passionate about their job, their firm, and their co-workers as the owner/advisor is. Creating that kind of passion is usually as simple as letting the employees see why you are so passionate about what you all are doing.