Too Many Hats? Advisors Best Serve by Doing 'What They're Best at'

Contrasting the sluggish rate of women becoming financial advisors with those being named to head financial services firms in recent years, she says: “There has been a focus on bringing in women from other industries to lead companies.”

In the interview with Spotswood, the former hedge fund manager explains that for advisors to best work with female clients, they need to “help women have the security and success to be fearless.”

Here are excerpts from our conversation:

THINKADVISOR: Compared to the older generation of advisors, what’s the outstanding trait of newer advisors?

SHANNON SPOTSWOOD: They have a growth mindset. They realize that things are moving really quickly, that the generational wealth transfer is happening and that the client-experience expectation is changing.

What other salient characteristics do independent financial advisors have?

They don’t have that first-gen mentality of “I’ve got to do it all: I’ve got to pull that plow, I’ve got to be that chief cook and bottle washer.” They don’t want to “do it all.” They don’t want to wear every single hat.

They recognize that in order to deliver that expected client experience, they don’t need to manage the money, do the trades, handle compliance.

They want to focus their time on what they love doing and what they’re best at.

How do they intend to accomplish that? 

They want an outsource partner that will take those other [activities] off their plate.

What do financial advisors love doing? 

The advisor’s superpower is deepening client relationships, solving complex problems, prospecting, connecting with new clients.

When their team is wrapped around them and their business is highly operationalized, they’re in a much better position to spend their time on those things.

What channels are most advisors joining your firm coming from?

All parts of the industry: broker-dealers, the large firms. Some have their own RIA and realized that that’s wearing too many hats — they didn’t enjoy it.

The anchoring decision of why they join RFG is that they want to grow and build enterprise value.

Are these financial advisors of a younger demographic?

They are. The average age of our advisor is 45. And they’re hyper-focused on serving multi-generational families. Because of their age, the majority of assets are concentrated in the hands of baby boomers, but they also foster relationships with [the next two generations].

How does RFG help these advisors grow?

They’re growing organizationally. If they want to be an acquirer, they can layer that in as well.

They’re in a perfect spot. They have enough experience to be credible, but they aren’t at the end of their careers.

What’s key to that growth?

If you’re not spending your time on growth, you’re not going to grow. Studies say consistently that advisors spend 80% of their time on non-revenue-generating activities, such as trading or investment management.

So it’s not a coincidence that advisors’ organic growth rate [industrywide] is 2% to 4%.

But when the advisor has a team with the right tools and support, it frees them up to do what’s in the best interest of their business — and that’s when you start to get 10% growth.

What does your firm do for financial advisors that broker-dealers don’t provide?

The biggest difference is that we’re really focused on helping the advisor build their unique business. It’s highly customized.

What are examples of advantages that RFG financial advisors have? 

We help each advisor build their brand, unlock their value proposition and deliver that unique client experience that sets them apart.

As a result, the average advisor on our platform is growing organically by more than 10% in an industry that’s growing by 2% to 4%.

What’s RFG’s payment system for advisors?

We’re allergic to nickel-and-diming, so our advisors get a 100% payout. We charge a platform fee for all the services we provide and an investment management fee for leveraging all the solutions offered.

You just won a 2024 ThinkAdvisor Luminaries award for Executive of the Year. What’s your leadership style?

Servant-heart leadership. I’m going to be in the trenches with the advisors shoulder to shoulder, and then I’m going to be very comfortable making hard decisions as a leader.

I have to give the advisors air cover when they need air cover and latitude when they need latitude.

It seems that women are making more headway when it comes to leading financial services firms versus joining them as financial advisors. Your take on that?

You’re right. We aren’t doing a great job of attracting as many women as we need into the profession of financial advisor.

Yet there’s a tremendous amount of financial upside, a lot of flexibility; and the underlying work of helping people is so noble.

But why is the rate of women helming firms increasing?

Part of it is that the industry has attracted talent from the outside. There has been a focus on bringing in women from other industries to lead companies.

RFG has a program called StrongHER Money. Please explain.

The mission is to empower women to live financially fearlessly through education.

We’re building a tool kit for advisors, both female and male, who are serving female clients or are focused on [wanting to] serve them and being very intentional about preparing them for the generational wealth transfer.

Why is it essential for advisors to focus on female clients?

By the year 2030, women will control 67% of [stock market] wealth in this country. That’s unprecedented. But working with women is not just about how you’re constructing the financial plan and building an investment portfolio.

It’s much more about how you’re supporting women at all stages of their life, how you’re helping them chart a path to live richly.

It’s doing things in a way that really helps women have the security and success to be fearless.