(Left to Right) Lisa Salvi, Ryan Caldwell, Heather Fortner and Stacy Haubenschild discuss talent at Schwab Impact.

Looking for and developing talent is important for growing advisory firms. A Schwab Advisor Services study released Wednesday asked second- and third-generation leadership at various firms what lessons they learned not only in working in the business, but handling a changing generation of clients.

Key findings from 11 interviews of former SAS graduates were:

  • Firm leaders see a more complex future for their businesses.
  • Emotional intelligence is the new essential skill.
  • Firms are offering more services in a quest to become “irresistible” to their target clients.
  • A diverse team can differentiate a firm through expertise, service and innovation, but is hard to build.
  • New technology is exciting, but needs a balance.

A panel of three graduates of Schwab’s Executive Leadership Program, started in 2014 with more than 200 professionals, who spoke at the Schwab Impact conference, provided insights not only on how they dealt with today’s clients but also discussed how they found and developed new talent.

The panel, moderated by Lisa Salvi, vice president of business consulting & education for SAS, was made up of graduates of the SAS leadership program. They included Ryan Caldwell, class of 2016, whose firm, Wacker Wealth Partners, has $938 million in assets under management; Heather Fortner, class of 2015, whose firm, Signature FD, has AUM of $4 billion; and Stacy Haubenschild, class of 2017, whose firm, Henssler Financial, has AUM of $2 billion.

All panelists agreed that emotional intelligence, or EQ, is the new essential skill. The study found these communication skills have become part of training, and that firms mentor staff today as so often they have “difficult, often intimate conversations with clients and clients’ children about their lives, and providing development opportunities that infuse EQ in leadership approaches and team dynamics.” Salvi added that EQ has become an important topic in all Schwab sessions.

Fortner told the audience that “we have focused on IQ in the business, but now we do EQ, which is harder to quantify.”

She came into the business as an intern and worked from the ground up, noting that the “journey to leadership was just a relentless pursuit of knowledge.” She also wanted to get an advanced degree, but not in finance, but in professional counseling. “I had been in enough client meetings by that time to see that families with substantial wealth usually had some sort of emotional issues around that wealth,” she said. “There was some sort of family dynamic that can either hinder or help how the plan is laid out and how well they can reach their goals.” She added that her firm allowed her not only to get the degree, but “to utilize that unique skill set.”

Finding talent and developing it has been a key topic in the business. Salvi said the study found that 76% of advisory firms were hiring this year, up slightly from last year’s 71% that were hiring.

Speakers found that one way to find new talent is to look outside the industry. Haubenschild was recruited from the medical administration business. Other examples include an attorney from a nonprofit, a retired Army Ranger who also was an executive coach or those with communications backgrounds.

Haubenschild also said their company is connected to the local university programs to recruit talent. It takes about seven years to develop a young recruit into a full-fledged advisor, she said.

Caldwell said they bring in communication consultants so “we can develop [talented recruits] to be better human beings.” They also make sure these recruits are involved in client meetings early on to learn those skill sets and made a connection to the client.

Fortner said today’s young talent will determine early if the firm isn’t a good fit for them and leave. Haubenschild agreed. “You have to change how you manage. Millennials won’t move if they have a career path and are rewarded.”

Diversity of a company also is key, and as Schwab’s study found, it truly can differentiate a firm as well as attract new talent. Salvi said many young people will check out a firm’s makeup and if it’s not diverse, won’t even bother applying.

The young leaders had certain advice for the next generation: Caldwell said to make sure to have a network of relationships. “I’ve been a CEO and it’s lonely [without people outside to talk to]. Have a coach or mentor if you can.”

Fortner said the next generation shouldn’t be afraid to take risks. Haubenschild agreed, adding that businesses should be open to change, invest in employees and help young recruits make transitions earlier. She also said “new employees need to learn from failure.”

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