Most, if not all wealth managers have heard the expression, "This is a people business." It's true; the business of providing financial advice and wealth management solutions is about people, and personal relationships may be the only element of our business that cannot be commoditized.
Yet if that's the case, then the most important investment a wealth management firm can make is in its people. To thrive over the long term, firms must be able to attract and land great talent.
Securing great talent is easier said than done. We are six years into this bull market and many firms have experienced outsized growth and developed a real appetite to expand further. More firms are actively looking to hire great people -- not just advisors and financial planners, but also attorneys, CPAs, top operations personnel and senior people to run the business as COO or CEO -- than at any point in the evolution of the RIA industry.
That means it's a seller's market for the top talent. The best players have choices; and as any great coach will confirm, the team with the best players wins more often than not. So how do independent wealth managers attract great talent?
PERSON FIRST, JOB SECOND
One thing we do: Prioritize finding the best person first and then consider the job second.
There are plenty of applicants whose resumes will demonstrate specific experience for the exact job role that needs to be filled. Typically, specific experience will demand a premium salary and will draw demand in the marketplace. Yet the bright, energetic, flexible applicant without specific experience may not be attractive to many firms.
For instance, when looking for a director of financial planning eight years ago, we deliberately avoided hiring a financial planner. We met many who had years of experience, but all demanded premium compensation to run a department and seemed set in their thinking and approach.
Instead, we chose a former practicing estate attorney who was running an advanced marketing team at a major insurance company.
Next, be sure your firm is growing and has a track record of 15% to 20% growth. This will help you recruit; growth is critical to provide upward potential to team members. High-quality candidates will intuitively sense whether the firm is growing and whether there will be opportunities for them to maximize their career there.
There are plenty of quality firms growing at impressive rates and using the additional cash flow to invest back into the business, thus investing in the people who work there. But on the flip side, no growth means you have no ability to attract great talent.
It's also important to give your people room to fail and succeed. Talented people want to own their work and contribute to the overall success of the company.
Too often, RIAs and wealth managers rigidly define the role they are trying to fill, threatening to constrain the creativity and energy of the candidates they seek. High-quality people want to feel trusted to own their work and have the freedom to develop their role within the firm. They want to create value.
Sometimes they will be unsuccessful, but the freedom and failure will be a growing experience for them and the firm. Without room to be successful and create a win for themselves and the company, great talent will look elsewhere.
The competition for great talent going forward will be intense. Find the best players to put in the game; demonstrate that the firm is growing, and can provide investment and upward opportunity for all team members; and get out of people's way. Practice these principles and you have as good a shot as any of landing that next great team member who will help take your firm to the next level.
Matt Cooper is president of Beacon Pointe Wealth Advisors in Newport Beach, Calif.