December 18, 2022

Built to Last

Fundamentals for crafting—and retaining—a solid advisory team.

Reported by Judy Ward

David Griffin looks back on his world over the past few years and says much has changed. “I’ve gone from managing a team of five to a team of more than 20,” says the Atlanta-based senior vice president of OneDigital Retirement + Wealth. In February 2021, OneDigital acquired his boutique advisory practice, Atlanta Retirement Partners, where he had hired a team of veteran retirement specialists due to his firm’s remote-work setup.

Now Griffin oversees a OneDigital team with a broader range of ages, demographics and experience. And, as their team leader, he needs to understand what motivates advisory team members to stay with their firm these days. “I think younger people look for different things now,” he says. “They’re looking for a fun workplace; they’re looking for inclusion; and they’re looking for upward mobility within the company.”

With the tight labor market, it is a very challenging environment for hiring and keeping advisory team members, Griffin says. “People just coming out of college are not jumping to work as a financial adviser—particularly to work as a plan adviser. It isn’t one of the sexiest options they have,” he says. “It’s up to us to show them that, as a plan adviser, you can help people, help companies and have a lot of variety in your day-to-day work.”

In what follows, several advisory firm leaders discuss varied approaches for retaining today’s team members.

1 Align cultures and missions.

“I think the younger generation is very driven by mission and purpose,” says Jeff Cullen, managing partner of Strategic Retirement Partners in Chicago. With the tighter job market and Baby Boomer advisers starting to retire, he says, younger advisers can be pickier about where they work and what they do. “Fortunately for this new generation, they do have more ability to say, ‘What do I want my mission and my purpose to be?’” Cullen says.

“I think the firms that are going to be able to attract and retain younger people,” he continues, “will have to have a good mission, be really good at conveying that story to their employees, and provide them with a career path that aligns with that mission and holds their interest.”

Retaining advisory team members all comes back to alignment of their personal values and the organization’s values and culture, says Rick Shoff, managing director, adviser group at CAPTRUST in Doylestown, Pennsylvania. “At some advisory firms, there’s a lot of turnover,” he says. “When I talk to advisers who want to leave their firm, they don’t say it’s because of ‘alignment’: They say the firm they’re with doesn’t really understand the retirement business. They tell me, ‘I would grow a lot more if I were offered more support.’ Retirement plan advisory work isn’t the main event where they are. They’re working in a firm that doesn’t understand their business, and they’re looking for a firm that does.”

If advisers do not feel aligned with their organization’s culture and values, “it’s easy to leave and go somewhere else, because they’re really not part of a team,” Shoff adds. “Some of the biggest aggregators are really not a team: They’re a bunch of individual practices. If you’re not one team, there is no alignment; so that’s when you see many teams moving around. They’re hired guns.”

“Some of the biggest aggregators are really not a team: They’re a bunch of individual practices. If you’re not one team, there is no alignment; so that’s when you see many teams moving around. They’re hired guns.”

2 Illuminate a development path.

The D’Aiutolo Malcolm & Associates Investment Consulting Group at UBS has eight core staff members. With one exception, they have all been developed internally, rather than coming to the Rochester, New York-based practice as experienced advisers. “Our team has always been built from the ground up,” says Paul D’Aiutolo, senior vice president – investments.

The process is gradual. New employees joining the team initially do nonspecialized tasks that require little retirement plan expertise, such as entering plan-health data from recordkeepers into the team’s quarterly deliverables, pulling research reports and inputting investment data in spreadsheets. As a second step, they join regular administrative calls the team has with larger clients, usually weekly or biweekly, to talk about whatever plan operational issues need to be addressed. A newer team member will just listen, but, over time, that person usually takes the lead representing the team.

As a third step, a newer staff member starts attending client meetings led by a more experienced adviser. The junior staffer helps prepare meeting materials, observes the meetings and takes notes.

After two or three years, most team members go in one of two directions, D’Aiutolo says. They either focus on external work that includes leading clients’ committee meetings and/or doing participant education, or they take on an internal consulting role. In the internal role, an office-based staffer works closely with plan sponsors on tasks such as committee meeting follow-up work and helping to resolve issues with the plan’s recordkeeper.

It is usually extroverts who are fine with traveling who gravitate to an external role. Rather than the path being something the team’s leadership determines, D’Aiutolo says, “it’s more of an alignment of their personality and skills with their job. Somebody who goes on the internal track probably is making a career choice of, ‘I don’t want to travel for work, and I need my work schedule to be more manageable and predictable,’” he says.

“The biggest thing is, there is no one-size-fits-all for how to develop people,” D’Aiutolo continues. “On our team, we start with the culture we have of, ‘we serve working Americans.’ If people believe in that mission, then we’ve been open-minded and flexible in how we structure their work.”

3 Talk regularly, and honestly, about how the job is going.

Advisory team leaders need to keep a very close eye on how they are developing junior staff members and bringing them along, Griffin suggests. “If people aren’t having the success they anticipated, that’s when they tend to move on,” he says. He gets together biweekly with each of his team members to talk about the status of the person’s current work projects. He also brings junior team members to meetings, such as with wholesalers, to show them that these industry contacts can be a good source of information on potential client opportunities and what competitors are doing.

Deena Rini, vice president and practice leader of retirement plan and wealth management services at Oswald Financial Inc. in Cleveland, has learned the importance of making time to talk regularly with team members individually about how they feel their work is going. She does that by meeting monthly with each newer member and quarterly with each longer-term member. More informally, she talks with a team member soon after something notable happens with client work—good or bad—to offer her feedback and get the other person’s feedback. “What motivates a team to keep going is when they know their voice is heard and makes an impact,” she says.

It is important to understand each team member’s goals and what motivates that individual, since this differs from person to person, Rini says. “I think the most important part of being a leader is giving clear, constructive feedback, and being honest with the advisers on your team,” she says. “And don’t speak in generalities: People need to understand the details of your feedback and a specific growth plan for themselves.”

Cullen considers SRP a steward for its employees’ careers. “That means our chief operating officer, Deane Mayerhofer, and I have to get to know our people well enough to make sure we’re doing the right things for them,” he says. They talk individually with each team member a couple of times every year about how they feel about their job, and aim to keep a free-flowing dialogue. For that open dialogue to happen, he adds, staff members have to feel it is safe for them to speak honestly.

4 Support nonlinear career paths.

People now in the early years of their advisory career want flexibility, Cullen finds. “The traditional career path of, ‘OK, I’m going to do step one and get a promotion, then I’m going to do step two and get another promotion’ isn’t as interesting to younger people now,” he says. “This generation wants variety, and they may want to do step one, then step A, then go back and do step two, then do step B. I don’t think the advisory career path will be as linear, moving forward, and we’ll need to find different ways for them to stay in the organization and to learn different things.”

Cullen’s team at SRP actually has very few people with a job description today that is a linear progression of the one they had when they started, he says. Take the example of one staff member who had been doing participant meetings on a part-time basis, who wanted to go back to full-time work but work from home. “So she became an internal relationship manager, on the operations side. And now she’s moved on to doing recordkeeper RFPs [requests for proposals] and vendor benchmarking,” he says. “She wanted a behind-the-scenes role and to have that work/life balance she needs, but she’s still progressing her career. She knows the education side; she knows the operations side; and now she’s learning the RFP and benchmarking side. We’ve done this time and time again with our staff.”

“This generation wants variety, and they may want to do step one, then step A, then go back and do step two, then do step B.”

5 Invest in organic growth.

Advisers historically have wanted to be part of an organization with an infrastructure and support that helps them grow faster, says Troy Hammond, founder and CEO of Pensionmark Financial Group in Santa Barbara, California. He says advisers still want those resources for organic growth, meaning growth by signing new clients or deepening existing client relationships. But he thinks some aggregators now have a much stronger focus on inorganic growth, meaning growth via mergers and acquisitions. Advisers, including those whose practice gets acquired, “want to have cutting-edge tools and resources, so they can compete for clients,” he says. “They’re going to be asking, ‘How can you help me grow my business organically, or do you just care about the next acquisition you’re going to make?’”

Asked what resources advisers want for their organic growth, Hammond says it starts with lead generation that can connect an adviser with potential future clients, such as putting on seminars for employer prospects. “It also has to do with our proposal system and our RFP system, to make sure that’s efficient and that it helps our advisers to express our value proposition,” he says. “And it has to do with the client-support infrastructure, so that advisers can offload much of the day-to-day, routine client work to those team members. It’s really that whole life cycle. You’ve got to do each of those things well: If you don’t, your growth will suffer.

“There are many firms that are laser-focused on inorganic growth and not so much on organic growth,” Hammond continues. “For us, they’re equally important: There’s an equal amount of energy and effort, and financial spend, behind organic and inorganic growth. We want to be organic growth leaders, as well. That’s what it’s going to take to keep people.”

With interest rates having jumped and the economy shakier, Hammond anticipates a slowing growth rate for both advisory acquisitions and the practice-valuation multiple advisers get when they sell their practice. When advisers get a really high multiple at the M&A market’s peak, he says, they may not focus as much on the depth of the acquirer’s resources to help them grow. “But if the market drives that multiple down, they’ll receive less than what they would have gotten at the peak. It’s then that advisers are going to start focusing more on, ‘What’s my life going to look like on closing day plus one?’” he says. “Then we’re going to see a much bigger focus by firms on, ‘How are we retaining advisers, and are we helping them to grow organically?’ All of that stuff—support and infrastructure to help advisers grow—is going to become much more important.”

6 Offer a sense of ownership.

“We want our compensation to be aligned not only with the things an individual adviser cares about, but that the firm cares about,” Shoff says. “So everybody at CAPTRUST has a path to equity: Everybody who works here can be a shareholder. Having broad-based ownership—particularly because we’ve been doing it for 24 years, and we go deeper in the organization to offer it—is very unusual. It takes more than advisers to take care of clients.”

Equity is one good way to get alignment between organizational goals and individuals’ career goals, Shoff says. “Another way is that our compensation structure has always been variable, so there is unlimited upside for advisers,” he says, describing CAPTRUST as unapologetically a growth company. “Advisers hate fences. They’re OK with having freedom within a framework, but they’ll say, ‘Don’t tell me I can make only so much money.’” He sees value in having a consistent variable-compensation structure, as CAPTRUST does, and says some other firms allow advisers to individually negotiate their variable-compensation agreement. “So, for advisers at those places, they never quite know if they got a good deal or not,” he adds.

SRP advisers are given the opportunity to become an equity partner in the firm and/or to maintain part ownership of their practice if they sold part of it to SRP. The firm also proactively shares its financial data, such as sales performance and financial results, with all employees, including the most junior, Cullen says. Within its strategic road map, SRP also has a one-year plan and a four-year plan that it shares openly with everyone on staff.

“We want to design compensation that is consistent with our organizational goals,” Cullen continues. “So we take our one-year strategic plan and divide that into a series of specific goals, and then we’re transparent about what those goals are and about what the status of the goals is during the year. We have bonuses for the entire staff based on whether we reach those goals.” Those one-year goals revolve around data such as sales growth for plan advisory work, sales growth for wealth management, new advisers becoming affiliated with the organization or having their practice acquired by SRP, revenue retention for existing clients, and EBITDA [earnings before interest, taxes, depreciation and amortization].

“Advisers hate fences. They’re OK with having freedom within a framework …”

7 Make a work/life balance doable.

Oswald’s Rini says that, to keep staff members, advisory firms need to effectively balance a clients-first mindset with a people-first mindset, the latter meaning people on the advisory team. “In our industry, the mindset has always been ‘Clients first, clients first.’ My focus is also on making sure our team members’ needs are being met,” she says. “I’ve seen how, when people on our team feel their needs are also important, they feel more able to treat all of their client relationships like A-list clients.”

Several years ago, D’Aiutolo Malcolm adopted the “family first” notion for its team members, and D’Aiutolo says it has been important in keeping the group together. “We listened to our team, and we realized that everybody is into the work we do, but we also have to be respectful of what else in their life is important to them,” he says. “We wanted to support the idea that family should be the most important thing in our lives: For some people, that means a spouse and kids, and, for others, it may mean their dogs.”

Younger people, in general, are looking for more of a work/life balance than is D’Aiutolo’s generation, he says. “They’re willing to trade some upside compensation for that work/life balance,” he says. “So I think teams are going to change in the future. If you look at the way advisory teams were built 20 or 30 years ago, you had a senior consultant who did everything and made a lot of money doing it. In the future, I think there will be three people who are each doing parts of that job [and making somewhat less].”

ProCourse Fiduciary Advisors, an MJ Insurance company, also shares the value of family first, says Brea Dantin, co-founder and adviser at the Carmel, Indiana-based practice. “We want to communicate to our team, ‘To us, you’re more than a body that can help us get our work done,” she says. “We want to make sure our people can have appropriate work/life boundaries.” Sometimes in this business, she says, “There’s a stance of, ‘If you’re not at your desk and working, you’re not producing at the level I think you should be.’

“We hire intelligent adults, and we treat them like intelligent adults,” Dantin says. “I expect our team members to meet deadlines, to be innovative and to give great service to our clients. If it takes someone 40 hours a week to do that, that’s fine. If it takes someone else 39 hours a week, that’s also fine. We’re not micro-managing their time.”