Just how important is culture to an advisory firm’s success? It’s everything—that’s right, everything. Yet it is often overlooked and rarely given its due. That could be about to change.
“We don’t talk that blatantly about culture yet it’s inherent in every aspect of a successful firm. It’s a living, breathing demonstration of strategy. You can feel it, sense it, experience it,” says Tracy Beckes, who coaches financial advisors from Tracy Beckes and Associates in La Conner, Washington. “Yet in this industry we rarely name it. It’s a critical next frontier. Start saying culture to people. Give it a name.”
Gen X advisors, in particular, are driving the change—and technology, not surprisingly, is also a contributor.
Matt Halloran, CEO of Top Advisor Consulting in Portage, Michigan, describes the emergence of a “Google-style” business model where job titles have given way to job lanes and top-down management is being replaced with an infrastructure that’s flat.
“This is still an old white guys’ business. So much is old school. It’s Gen X that’s starting to run these businesses who are embracing technology and are willing to make massive cultural changes,” says Halloran. “They don’t want to be clock watchers. They don’t want antagonistic relationships. They want to live life.”
There is no right or wrong culture, according to San Diego-based industry consultant Angie Herbers. The key is to stay faithful to a shared vision.
“I have seen very casual cultures, to the point where people walk around barefoot and I’ve seen very polished, classy, put-together, formal cultures. What I know for sure is any type of culture you want to create will work. You just have to stay true to it,” she adds. “A lot of people think culture is a result. Culture is actually the leader. It’s not a second position. It leads everything.”
Herbers herself is currently in the midst of co-creating a new culture as she merges her operation with that of business partner Kristen Luke. The goal: to construct job descriptions around what people believe makes them happy. The firm, as yet unnamed, doesn’t have job titles but rather has lanes.
“We define the job not by the title but the individual. Here are the things you’re good at and this is how you’re going to work and function in our culture. What can we add to your plate, what can we take away? Most companies will say what position do you want or this is where you fit in,” says Herbers. “We’re starting with the individual and building it from there.”
Philip Palaveev, who heads The Ensemble Practice in Seattle, calls culture the single most important contributor to the success of a firm. Where does it all begin—and end? With the behavior of the firm’s leaders.
“Double underline that—the personal example of leaders. If leaders want to influence the organization they are leading, the best they can do is really behave the way they want everyone else to behave. Culture is like the air. It’s always there,” notes Palaveev. “Guiding a culture is challenging. It’s like guiding a river with its own course and momentum. The question is: Do you like the culture you have or not? Do you have the right culture? I think advisors are vaguely aware of the importance of culture. At times, they underestimate how powerful it is.”
Here’s a look at three leaders who are at the cutting edge of cultural innovation:
Peek at the Buckingham Asset Management website, click on “Our Team” and you’ll see receptionist Karen Schulte’s photo among the top bios. CEO Adam Birenbaum’s bio is featured midway down. Co-founder Bert Schweizer III, who founded the St. Louis-based firm in 1994, is at the bottom of the heap and is listed, simply, as wealth advisor.
“It’s purposeful,” says Birenbaum, 37. “It’s really important in this organization to make everybody feel they are a critical part of the team. We all know, from the receptionist to the chief executive officer, that every person plays a critical role in making the client experience what it needs to be. I’m a huge believer that if any group in the organization feels they are not part of the entire process, then you’ll have issues. You’ll have class hierarchy, warfare. That’s terrible. None of us want to deal with HR issues that occur when people don’t feel special.”
Birenbaum joined Buckingham in 2003 as an intern when he was in law school. When his leadership began in his early 30s, Buckingham and its BAM Advisor Services, a turnkey asset management provider, were less than one-third their current collective size. Today, Birenbaum heads a wealth management firm with roughly 220 team members that serves nearly 19,000 clients, managing or administering over $25 billion in assets. Birenbaum says he has stuck to the roots of the culture he inherited—what he calls the Buckingham Way: a culture of opportunity, mentorship and support.
Buckingham spends a lot of time, energy and dollars on people development. Its HR leader, or chief talent officer in Buckingham-speak, has three people on staff. There’s a peer-nominated mission award called Lightning Strikes that recognizes exceptional levels of service. A cultural engagement committee routinely offers up advice that has resulted in workplace enhancements. One recent outcome: Team members now receive wealth management services for free. And, once a quarter, everyone in the tech department takes a day to work on anything they want to that could add value to the firm.
At the moment, Birenbaum is working on individual development plans for everyone who works at Buckingham and he is also driving an initiative to get each person in the organization equity ownership.
“I don’t think we have some secret sauce here that others can’t follow. However, too often firms follow dollars, the search for the almighty profit. They don’t first focus on building a culture, building an organization with resources. How many other RIAs have four dedicated HR team members and technology departments? We dreamed what this place could look like and built it,” says Birenbaum. “Success came along with that.”
The story, however, doesn’t stop there.
“I’m most proud of the idea that we’ve helped nearly 19,000 families and institutions. It’s incredible we can touch so many lives and, really, we’re still in the early stages,” he adds. “I see no end in sight to the growth opportunity in front of us. I think we’re going to be a bigger better version of ourselves. Someone will emerge from this space as a recognized leader. I always say why not us?”
The top “action point” of Abacus Planning Group’s culture is: Listen, and then listen. “We want to be the best listeners in the world,” says Cheryl Holland, who founded the Columbia, South Carolina firm in 1998. “We work on active, deep listening—not just to clients but to each other.”