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Practice Management > Building Your Business > Leadership

Win the Talent War by Aligning Values With Growth Objectives

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It’s no secret that there’s a professional talent shortage in the independent advisory industry: Business has been booming, firms are growing (both in new clients and assets under management), and baby boom age advisors are well into their retirement phase. In fact, according to Pershing’s Mark Tibergien, “Today, there are more [advisors] over 70 in the industry than there are people under 30 coming in.”

As you might expect, the combination of these factors has a created a perfect storm for today’s advisory firm owners. I know this probably sounds terrible, but I have to admit that I’ve been waiting 17 years for this moment when independent firm owners will finally realize that they have to run their firms like real businesses and focus on their people first.

Don’t get me wrong; it’s not that I’m reveling in owners’ problems. It’s just that, like most people, owner-advisors usually don’t want to do anything about their problems until they have to.

Now, the competition for finding much-needed professional talent is forcing firm owners to do the things I’ve been talking about for years. It’s a big problem, and to solve it, owners will have to do things differently.

The first thing that today’s firm owners need to do differently is to change their approach to hiring. Like most business owners in other industries, owner-advisors tend to think that attracting high-quality candidates is about writing a good job description with a clear career track, establishing a screening process and, of course, the money.

As it turns out, each of those things are important to the process, but none of them is why candidates accept job offers — at least, not any candidates that you’d want working for your firm.

Why ‘The Money’ Isn’t Enough

For starters, let’s talk about the money: Do you really want someone to take a job with your firm for “the money”? Based on 20 years of experience, I can tell you without hesitation that you don’t.

I advise my clients to pay their employees competitive salaries for their job descriptions (along with good benefits, and annual bonuses based on the success of the firm).

No one wants to feel they are underpaid, but paying top-end salaries often creates a sense of entitlement or a feeling of “having made it” — both of which can greatly decrease a younger advisor’s motivation, right at the most crucial time on the professional learning curve.

What you do want are professional employees who want to work for your firm; not for the money, but because they want to be a part of what your firm does. We call that being an “employer of choice.”

Becoming an employer of choice starts with your firm’s culture; it’s your culture that will attract top young professionals and sell them on your firm. (For more on how to be an employer of choice, see Mark Tibergien’s column on page 31.)

I’ve found that creating an attractive firm culture is easier for independent advisory firms than it is for some other businesses. Advisory firms help people in areas that have a major impact on their long-term well-being and happiness — not only for their clients, but children and grandchildren, as well. Simply put, advisory firms focus on “doing good,” which is a major attraction for professional job candidates.

Culture and Core Values

Of course, while it’s an excellent start, creating an attractive firm culture is about more than simply doing good: It’s a process by which the firm owner articulates his or her vision of how everyone in the firm should act, from the owner down to the receptionist.

But it’s not a laundry list of “dos” and “don’ts.” Rather, it’s a list of core values for the firm, which serve as guidelines for owners as well as employees.

I know what you’re thinking: “Ugh, core values.” It is true that most consultants talk about the importance of core values, but it is also true that most consultants (and advisors) don’t know how to use them to build a company where employees come to you.

Here are the steps I use to help advisory firm owners create core values for their firms.

1. To start, I suggest that owners create four lists: core values for the owner, for employees, for the firm and for working with clients. These lists will describe how the firm owner and employees are expected to behave toward each other, in the performance of their jobs, and in their interactions with the firm’s clients.

These lists are not complicated. They may refer to behaviors such as being honest with each other, taking responsibility and working toward the success of the firm. The important thing is that they are based on the owner’s vision of what it should be like to work in the firm or to be a client of it.

2. Make complete lists in each of these four categories. Be open and honest about what you expect from your employees and yourself. I find it’s more productive to focus on what you’d like people to do, rather than on what not to do. At first, you might have dozens or even hundreds of items on your lists. That’s okay; you can always trim them down later.

3. Critique your lists, and strike out values that are unrealistic. For instance, “everyone should be detail oriented” is a popular value. The problem is that everyone isn’t detail oriented (neither are most owner-advisors, in my experience). Successful businesses need “big picture” people, too. A better value would be to determine whether you are detail oriented or big picture, and to focus on tasks that play to your strength.

Another common value is to eliminate mistakes, but this is also too high a bar. It’s better to work toward minimizing mistakes; the more reasonable a core value is, the greater the chance it will be followed.

4. Organize core value lists into groups. To manage what are usually a larger number of core values, I suggest owners group them under simple headings such as: Integrity, Teamwork, Client Contact, Work Habits, etc. This makes it easy to see overlaps and omissions.

I encourage firm owners to take a first crack at cutting down their core values to the most important, but even that can leave a pretty lengthy list. While short lists are generally better in this case, it’s important to include every value that is important to the firm owner. The goal here is to define the firm you want to own — and one you’re proud to sell to new clients and prospective employees.

5. Get employee input on core values. Some owner-advisors resist this step on the grounds that the core values are theirs alone. I counsel them that while this is absolutely true, there is no harm in getting feedback from their employees, whose insight can be very helpful regarding what’s meant by some values or important additional values. Making them feel like part of the process can go a long way toward getting their buy-in, thereby increasing the chances that these values will be adopted across the whole firm.

6. Implement your core values. This, as you might imagine, is where many firms drop the ball. It’s all well and good to create firm core values, but they won’t have much value if you don’t take the next step toward turning them into reality. This requires different steps for different values. For instance, an owner’s core values are usually self-enforced. In fact, many firm owners don’t share their personal core values with their employees. Still, I encourage owners to periodically review their core values (every six months or every year) as a reminder of their own expectations and a review of their performance.

Once you’ve created your core values and taken action to implement them into your firm, you can use them to sell your firm to job prospects (and to prospective clients as well). Your core values will clearly articulate what your firm stands for, and what kind of people you are looking for to help you make them into reality. That makes any job offer you make very concrete to a prospective employee.

Consequently, you’ll have a lot of people wanting to work with you. Be careful who you let in to your business. It’s important to keep in mind that your core values are also an important tool for weeding out candidates who don’t really buy in to them: If they don’t, they won’t be a good fit.

— Read Aspire to Be the Employer of Choice on ThinkAdvisor. 


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