The New Differentiator

In May, I had the good fortune to attend both our PLANADVISER awards dinner and our Chief Investment Officer Summit. It was wonderful to be with people again after years away from live events. As I met and chatted with attendees, it was an opportunity to reflect on how our industry has evolved. It’s easy to talk about getting back to normal, and while no one wants to hear about the “new normal” anymore, the truth is that, in this later stage of COVID-19, normal doesn’t just mean a return to pre-pandemic times.

One way this has been recognized in the PLANADVISER brand is through our revised Retirement Plan Adviser of the Year awards program. The new PLANADVISER Industry Leader Awards were presented at the dinner, and you can read about them in this magazine. Advisers won for achievements we had never recognized before but that are now front and center. The awards now include community impact; efforts in diversity, equity and inclusion; work to improve access and coverage; and mentorship. These things might have been discussed in our old program but were ancillary to the evaluation of business models. They may be, however, more important, because they speak to an adviser’s culture.

Addressing our CIO Summit, in Chicago, Shundrawn Thomas, the outgoing president of Northern Trust Asset Management, used a phrase that has stuck with me. He spoke of acting with “thoughtfulness and intentionality” and the importance of culture. He noted that, if you think about any kind of organization that operates in a competitive environment, it’s hard to argue that one has a much better strategy than the other. In fact, he said, “culture is the only true, discernible advantage one can have during this time.” A strong culture means a healthy organization, Thomas observed.

As I consider the advisory industry, I think those statements apply. For years, when we asked advisers what their value proposition was, it often involved some version of the three Fs: funds, fees and fiduciary. While that might have been true a decade ago, it’s pretty safe to say that those are table stakes today. So, what is the differentiator now? Culture.

This is also true in mergers and acquisitions. There are many excellent advisers and adviser shops out there—which one someone joins is about its culture and the life the adviser wants. Culture relates to questions such as how much individuality and decisionmaking ability does an adviser want to retain?

What is the culture like within your team? Is your firm healthy? If not, what plans do you have to improve things? And if you don’t know what your culture is like, Thomas said, listen to the dialogue among employees for a week and you’ll know the health of the organization.

All this being said, I was thrilled to witness the response to the revamped adviser awards. Attendees’ interest in understanding how advisers were embracing these important values seemed high, as I noticed them seeking out the nominees and winners during the cocktail and dessert hours.

I therefore believe the time is right for us to focus more on the role advisers play in the broader industry and less on how they charge their clients or serve as stewards—if you aren’t a good steward or fiduciary, you aren’t likely to be nominated for our programs anyway.

For those of you who haven’t paid as much attention to managing the issues concerning culture—whether DEI, mentorship or community service, for example—it’s probably time to pay more attention. And for you who say you’re too busy and focused on other business, I’ll end with more of Thomas’ wisdom: At the end of the day, when a matter is important, we find the resources—whether it’s time, money or something else.