What You Need to Know
- Hybrid work, RIA M&As, diversity and fintech were among the standout topics at the DeVoe M&A+ Succession Summit.
- Companies that develop the right hybrid work formula are expected to attract the best talent.
- More RIA firms need to create succession plans.
Hybrid work, RIA M&As, diversity and fintech were among the standout topics last week at the two-day DeVoe M&A+ Succession Summit in San Francisco that was also available to view virtually.
Here are the 10 top takeaways from the summit sessions that ThinkAdvisor covered Thursday and Friday:
1. Companies that develop the right hybrid work formula will win the talent war.
Charles Schwab started a hybrid work strategy in which staff members have all been given “90 days of flexibility to work from another location” aside from the office each year, Bernie Clark, head of Advisor Services at the firm, said during the Friday keynote.
“We think that’s a new demand of the workforce of the future,” he told attendees, predicting: “Whoever gets this more right — and I’m not saying we have it right [but] we have it more right than we used to — is going to attract the best talent.”
A lot of people are either happy to be back at their offices already or look forward to returning to their offices, he said. “But they want a little more flexibility; there’s nothing wrong with that. There might be a little less travel. Let’s not demonize the virtual world because we’re so tired of it.” Just make sure to use it “in an appropriate way,” he added.
Advisory firms have “always employed this flexibility,” he said, noting: “Their offices have been more open. Many advisory firms don’t have stated policies” around this.
He warned: “If you don’t show flexibility, you are going to have great challenges in the future attracting talent.”
Many advisors also “don’t want to live in expensive places” and are choosing to work from locations that are less costly and work remotely if the firm they are working for is located in a more expensive area, Clark said.
“That’s an interesting population of people for us to attract: Talent that sits somewhere other than where we are and yet they have what we need in capability,” he pointed out.
In a panel session Thursday on the state of the RIA industry, Ben Harrison, managing director, at BNY Mellon | Pershing, said: “The appetite for a five-day” work week “in the office environment is gone.” Now, it’s “about creating an environment for employees and talent that really gets that balance of in-person as well as remote work and I don’t see that changing,” he added.
During the same panel session, Ed Moore, special advisor at DeVoe & Co., said: “Advisors that I talk to today — those that have mature books — are saying they have no reason to go back into the office again.”
2. A potential area of concern is a weakening of relationships.
Despite the growing desire among many advisors to continue working remotely and meeting with clients virtually at least some of the time, the “real question to ask for the future … is if I’m in Zoom meetings with clients, what does that do the client relationship?” asked Moore.
“Do I have the depth of relationship that I would have” with in-person meetings?
“The second question [is] what does that mean for the depth of relationship that we’ve got with our employees?” Moore wondered, adding: “The transient nature of that would concern me as well.”
3. Increased work flexibility could raise the share of advisors who are women.
Only about 31% of financial advisors are women, according to the Bureau of Labor Statistics.
As in other sectors, some advisors, the majority of them women, stop working to raise children. But many of those advisors would love to start working again, David DeVoe, CEO and founder of DeVoe & Co., said during the Thursday panel session.
“What hopefully is starting to happen here is that flexibility across different companies” will allow many of those women to return to work again, in a part-time position and/or by working remotely, he said. “Hopefully, this opens up a path which our industry, in particular, could benefit from.”
4. Technology has changed employee expectations in the industry.
“The expectations for tech are quite different than they used to be five years ago or 10 years ago,” and advisory firms’ systems are “certainly not as advanced as they’re going to be” to solve the needs of advisors and clients, Moore predicted.
The tech, however, “doesn’t always work, it’s not always seamless, everything’s not always integrated,” according to Brian Hamburger, founder of MarketCounsel and the Hamburger Law Firm, who moderated the panel session.
“With a lot of acquisitions now, firms are not necessarily being acquired because of their tech but “in spite of the proprietary technology” those firms have, Hamburger said.