Close Close

Practice Management > Building Your Business

The New Culture of Advisory Success

Your article was successfully shared with the contacts you provided.

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:

People Power

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?”

Deep Listening

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.”

That explains the Mickey Mouse ears that every new hire gets. Also in the welcome bag: a Yoda key ring, symbolizing “Seek mastery,” another hallmark of the Abacus culture; Dan Sullivan’s gratitude journal; and a mirror to remind the team member that “it’s not about me” and to always think through the lens of clients and their goals and worldviews.

At Abacus, which has $890 million in assets under management, there is a culture of celebration (“32 babies and counting!”) and relaxation. Every staff meeting starts with a breathing exercise followed by a giggle. “Laughter—what it does for your heart and mind is amazing,” Holland notes. The firm’s 25 team members plus rotating interns are also encouraged to take a break after 90 minutes—to walk around the block or connect with a friend. And the first thing the leadership team does at quarterly off-site meetings is to rate the healthiness of the culture.

Woo woo? Maybe. But clearly something’s working. Advisors visit Holland’s headquarters (bean bags on the floor, art on the walls, lots of natural light, no individual offices) every year to study a culture that has made Abacus, as Holland puts it, a stronger firm with better decision-making. The firm has also become a destination for young talent.

“I like a flat culture. I like the idea of lots of voices, lots of input that goes into the direction, strategy and culture of a firm. Rather than leveraging one person for a firm to be successful, I think it’s much more important to have a team,” says Holland, 57. “This is us. We’re a little eccentric. Everyone is uncomfortable in the beginning. There are 30 people in the room and everyone’s laughing? A lot of people don’t like the flatness. There’s a lot of ambiguity. Some people want to know exactly what their job is every day. A lot of people prefer clarity and direct lines of command. All I can say is we’re 1,000 percent authentic.”

It’s the deep listening that drives so much of what Holland does. In every mini team meeting, time is carved out to role play active listening for five minutes. Holland herself uses something called the Nine Second Rule when listening to clients. After a client answers a question, she waits nine seconds before speaking.

“Just count to nine. It’s amazing what comes. Usually it’s a worry: ‘I haven’t told you but our youngest child was diagnosed with MS’ or, after talking about their portfolio, ‘I really didn’t understand what you just said to me.’ That’s great feedback,” adds Holland. “The richness of the relationship has gotten so much better, giving them the space to process. There’s a safeness created around those nine seconds.”

After every client meeting, there’s a debrief check list. First on the list: Were we listening?

The X & Y Factor

When Ted Jenkin left Ameriprise Financial to co-found oXYGen Financial in 2008, he set out to create the opposite of the “big machine” corporate culture he had just left. The big idea was that while the rest of the industry focused on baby boomers, oXYGen would cater to Gen X and Y. What exactly does that look like?

First, Jenkin and co-founder Kile Lewis scrapped the term financial advisor. “So passé,” says Jenkin, 45. Instead, they trademarked Private CFO as the moniker for what they do. “We gather fact and feeling data,” he says. “We spend a lot more time on the feeling piece. A lot of individuals, couples especially, have a hard time talking about money. And they typically don’t know how to manage their income.” (Jenkin is currently at work on a book called “You Make $100,000 and Live Paycheck to Paycheck.”)

As for the firm’s “lobby culture,” there’s a live oxygen machine, board games like Life, and a gaming station. In the cooler are Yoo-Hoo, Hawaiian Punch and Tab, drinks that Gen X and Y grew up with. There’s no Money magazine or Smart Money but Wired, Entrepreneur and Food & Wine. One-third of oXYGen’s 2,300 clients use Skype or Go To Meeting to connect with their Private CFO.  On average, they pay for a software service of $95 charged to their credit card.*

“I wanted our culture to be entirely different, the antithesis of what everyone else is. No suits. Typically I wear jeans. A sport coat would be dressed up for me. This generation appreciates a more relaxed, subdued culture as opposed to CNBC on the wall, marble floors and mahogany,” says Jenkin, whose oXYGen “stores,” as he calls them, in Atlanta and Alpharetta, Georgia manage nearly $400 million in assets. The average client is around 40 with an account size of $300,000 to $500,000.

At the moment, oXYGen is launching a national platform so that affiliates or franchises can operate in lifestyle cities like Austin, Denver, Nashville, Tampa, Seattle and Portland. “Hipsterish,” Jenkin calls them. Offices in Fort Lauderdale and Santa Monica will open this month. oXYGen hopes to build up to 20 stores over the next 10 years.

“The only thing I knew when we started was that the entire industry was, and they still are, focused on the golden age of baby boomers. Experience told me from the past that when all the fish are in the red ocean, you need to go find the blue ocean,” observes Jenkin, who blogs for The Wall Street Journal. “With the first Gen Xers turning 50 this year, you will start to see a mild shift in the way large institutions are marketing. In five years, you’ll see the onslaught. But those massive companies won’t be able to rebrand themselves by the time this generation comes along. By then, we are a huge independent firm or an acquisition target. We’re here. We’re ready.”

* Editor’s note 4/26/15: The marked paragraph has been changed to more accurately reflect the nature of the service and client base.

What They’re Saying

“Cultures become problematic when there is a discrepancy between the actions of the leaders and the behavior they expect from the rest of the organization. They become problematic when there is a discrepancy between strategy and reality. If we say we treat clients in a certain way but don’t, if we say we make decisions in a certain way but don’t, that’s when culture becomes dysfunctional.”

—Philip Palaveev, The Ensemble Practice

“People have the desire to be part of something bigger than themselves, an esprit du corps. Team members are attracted to that, clients are attracted to that. The impact of a strong culture is powerful. It’s a very effective tool in business.”

—Tracy Beckes, Tracy Beckes and Associates

“You have to have a culture of success with everyone rowing the boat in the same direction. I believe culture allows you to do that.”

—Matt Halloran, Top Advisor Consulting


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.