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Catching Clients and Advisors with Culture

By Walecia Konrad November 14, 2016

A recent PwC survey found that 60% of financial services CEOs believe top talent will work for organizations with social values that are aligned with their own. At the same time, a number of studies show that financial services is not a particularly well-trusted sector among consumers. When you combine these two realities, it becomes clear why it is so important for advisors to build an environment in their firm that exudes integrity and responsibility.

Whether you’re the boss or a staff advisor, here’s what you can do to create a culture that will help attract not only the best, most trusted advisors but strong, long-term clients as well.

David Blain, CEO of BlueSky Wealth Advisors, with offices in New Bern, N.C., and Pleasanton, Calif., recently wrote a 10-page brochure describing the culture his firm needs to succeed.

“It was somewhat painful to do but now everybody loves it,” he says. In the guide, which potential employees receive before they interview, Blain outlines the qualities he wants his employees to exude. In addition to integrity, respect and knowledge, Blain also strives to create a workplace where advisors are effective, innovative, passionate and courageous.

The last quality is especially important in the wake of the Wells Fargo scandal, says Blaine. “We want our employees to be courageous enough to do the right thing and avoid the greed and confusion out there,” he explains.

In addition, the fee structure at BlueSky, which manages $400 million, helps define the firm’s culture for both advisors and their clients. Based on how complicated a client’s financial situation is, the firm charges a flat fee for advisor services. So a person needing retirement, college savings and estate planning would pay more than, say, an older retiree with few pressing financial issues. The fee remains the same no matter what the performance of the client’s investments.

“We’re trying to set the firm up so that advisors can fulfill the traits we are looking for,” Blain explains. “That won’t happen if compensation is tied to how many products they sell.”

David Blain

“Culture is key to recruiting talent and clients successfully,” says Andrea Travillian, founder of Smart Step Business Advisors, a small business consulting firm based in Dallas. Having a clear vision of your culture and communicating it effectively should be top priorities, says Travillian, who works with financial advisors.

An important element for any financial firm’s culture is transparency, especially concerning fees.

“It used to be clients didn’t understand fees, but that is no longer true. Now advisors must make it clear to clients exactly how and what they are charging,” Travillian says.

Hand in hand with transparency is clear communication. What are your values for the firm? What are your goals? What is your vision for the company?

“Communicating the answers to these questions clearly to employees and clients is the first step toward building a strong culture,” advises Travillian.

“We are looking to create a culture where members of our team engage clients and are passionate about taking care of their needs,” says David Barton, chief wealth management officer at Savant Capital Management, a firm with 34 advisors in 12 locations managing $4.5 billion.

Barton says he achieves that goal by hiring the right people. He thinks there’s several ways to hire in the financial advisor business, including hiring and training from scratch, recruiting experienced advisors and acquiring other firms.

The latter is the approach Savant most often pursues. Savant has acquired many small firms looking for a succession plan or whose principal no longer wants to deal with the administrative side of the business.

“Culture fit is very high on the list when we think in terms of a merger or acquisition candidate. They have to understand our philosophy and how we’re structured and organized,” Barton says. “During the acquisition process we get to do that cultural dance.”

Barton says he looks for advisors who follow the same philosophy of investing as Savant, which he defines as determining the right asset allocation, keeping portfolio costs low and using the most advantageous tax strategies.

“More and more high net worth clients are looking for a low-cost alternative. We’re a good cultural fit for those clients,” says Barton.