What You Need to Know
- To improve hiring practices, advisory firms should stop just-in-time recruiting, BNY Mellon Pershing's Christina Townsend says.
- Firms should also groom talent from within and be open to candidates outside the sector with the right skills.
- Firms should have open, honest conversations when it comes to diversity and inclusion, she also says.
As BNY Mellon Pershing’s annual three-day Insite conference starting June 8 approaches, one of the event’s scheduled speakers, Christina Townsend, offered some thoughts on three of the event’s key topics: human capital, diversity and advisory firm growth.
Townsend, the firm’s managing director and head of relationship management, consulting and platform strategy for advisor solutions, is to speak at the conference session “The Secret to (Virtual) Business Growth.”
The Need for a Human Capital Strategy
Some advisory firms continue to struggle with hiring and building their advisor talent pipelines. Those firms that are struggling “tend to be those who are not proactive at all about developing any sort of human capital strategy,” Townsend told ThinkAdvisor.
Even if a firm has just three people, it still “needs to have a strategy around how they’re going to attract, retain talent [and] deal with succession planning,” and it is “not necessarily difficult,” she said. However, it “does take time and effort.”
There are a few things that advisory firms “could tweak to have better results,” she noted.
Her first suggestion: “Don’t do what I call just-in-time recruiting. So don’t wait until you have someone who’s ready to retire, someone who’s leaving, and then start to recruit and try to find someone. You should always be recruiting, always be establishing that pipeline of potential talent to join your firm, just like you build a pipeline of prospective clients to come into your firm.”
Her second suggestion: Stop focusing so much on “chasing the experienced talent, those people who are advisors [and have] other roles within the firm [or] who have a perfect résumé, who’ve had all the experience [and] they check all the boxes.”
Instead, she encourages firms to “take the time to actually grow the talent within your firm [and] groom” new talent and “let them become your bench versus always necessarily thinking you need to go and hire someone with all of the experience from outside,” she said.
Similarly, firms should make sure to “create career paths” for the talent they already have so that when an advisor spot needs to be filled, the talent within the company is ready to step up to the plate, she explained. This “underscores the importance of really spending the time and investing in these people at your firm and creating that career path,” so they can become junior advisors, and then move on to be senior advisors, she said.
Firms should also be open to hiring people from different industries who have the underlying skills to make great advisors or to be exceptional in other roles, she said. “Don’t necessarily look at all the experience. Look at the person’s skills and think differently about who you hire.”
Townsend went on to recommend that firms “be open to recruiting across different geographies, noting that “the world has changed [and] there are firms that are becoming completely open to hiring the right person, regardless of location.” That has become easier now with more people working remotely.
Townsend conceded that this is “not necessarily the culture for every firm, but I would just say be open to it.”
Not planning a growth strategy for the firm right from the start is another mistake that many advisory firms make, she said. Some firms that are struggling have, over the past decade, “evolved from being maybe a one-, two-, three-person practice” to one with 20 to 50 people and “almost more of an enterprise,” she said. As a result of that evolution, the strategy around what they need to do to hire and retain talent has become very different, she explained.
Her recommendation: Always be thinking about what will be the next step in your firm’s growth.
“Hope isn’t a strategy,” she said, adding: “Hoping that you’ll have the person within your firm or hoping that the person will magically appear from the outside when you have this need … is not a strategy.”
On the flip side, those at firms that are making progress are clear when you ask them to articulate their business plans and strategies, she said.
Also important: “Culture and the values of a firm matter, and they matter more each and every day,” she said. “When we speak to firms, their people, their advisors want to be in a firm where they understand what the culture is [and] where the firm is going.”
The Need for More Diversity
Another major challenge for advisory firms pretty much across the board is the need for more diversity.