Work is either a job or a calling.
Most people would love to have a calling, and the financial planning profession readily fits the bill for many. Advisers have an opportunity to make a significant difference in clients' lives and this can be emotionally rewarding. Financial services firms that focus on actually helping people while making a decent profit can create an incredible work culture . Yet in recent years, there has been a large cadre of advisers leaving the wirehouse and broker-dealer world and going to independent RIAs.
SERVING THE BOTTOM LINE
What's driven this exodus?
Fiduciary standards and robo advisers are playing a small role. By and large, through the work of the consumer press and advisers who have been acting as fiduciaries for decades, clients have become very savvy and are leaving the non-fiduciaries in droves. Advisers working in the wirehouses see this. They see there is a better way to help their clients, they want a change in culture and the stars have aligned for them to jump ship.
During the previous half century, readiness for retirement moved away from guaranteed pensions to the uncertainty of 401(k) plans. The need for financial advice flourished and this presented the financial services industry with a huge opportunity. Ideally, they would help the public prepare for a secure retirement and make a nice profit along the way.
Stock brokers and insurance agents became trusted advisers. Unfortunately, the companies they worked for only took half of the deal with America seriously — making a nice profit took precedence. These large financial service companies sold clients expensive products that were not good for their future retirement. The firms did this through hidden fees, slick promises and advertising, and by providing training that deluded advisers into thinking they were helping the client. Incentives focused on sales, not on client success.
FINDING A BETTER CULTURE
Advisers I've interviewed recognize they come from an unhealthy culture. When striking out at a new independent firm, they need to ask how culture is created, communicated, and maintained. If they plan to start their own firm, then they need to foster a healthy culture from day one. How is this done?
First, create the culture. Focus on characteristics of your organization that turn your job into a calling. In our firm, we have “corporate engagement standards” that spell out how we act at all times. A few examples of what is included:
· We have an open door policy with honest, direct, and clear communication. If something bothers an employee, they need to share that information. If there is a criticism of another employee or the way things are done, we listen to each other from a place of learning, empathy, and goodness and work to resolve the situation through compromise. We do not speak behind employees' backs, and if it does happen, it is understood this information will be shared with the employee of concern. We have short daily meetings and longer weekly meetings to give us time to communicate about any issues.
· All questions are good questions. If an employee is uncertain they need to ask. “I don’t know” is an acceptable answer between staff members. “I don’t know, but I’ll find out” is an acceptable answer to a client.
· We are all valuable. Our relationship needs to be reevaluated if we ever stop enjoying or respecting one another. We are committed to living our lives from a place of joy and kindness, and hope to have long-lasting, healthy relationships with each other and all of our clients.
· Mistakes are human. We take full responsibility for any errors made and we learn from them. We agree to make each other aware of errors as soon as they are discovered. We do our best to minimize errors and immediately remedy errors that occur. Our goal is to make the client “whole.”
The next step is to communicate the culture regularly. New employees are given a copy of our corporate engagement standards before they are hired and must initial each line when they take the job. The entire firm reviews the engagement standards at least once a year and occasionally we make updates. It is a living document.
To maintain culture, one person in the firm serves as “head culture keeper.” If there are any potential lapses not in tune with our way of being, the job of the culture keeper is to call it out immediately and help craft a remedy. This shows the seriousness we take in who we are and conveys that our words have meaning.
Recent events at Uber laid bare the importance of cultivating the right kind of corporate culture. The company has suffered following revelations of bad business practices, attitudes of entitlement and rampant sexism.
A kind, purposeful and caring culture draws ideal clients and excellent employees to a company. Clients want to know employees love their job, as this translates to better service. It also makes the client feel good knowing they are affiliated with a truly outstanding group of people. Word gets around. Clients talking about our culture has translated into referrals. And we never actively ask the client for referrals. They ask if they can send prospective clients to us.
Independence is more than escaping a bad model of service. It is the perfect opportunity to create a firm that translates a job into a calling and transform the lives of co-workers and clients who follow.
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