Advisory Leadership

Using the Seven Steps of Heart Culture to Create Lasting Success for Any Wealth Management Firm

Greg Friedman

• Publisher: Wiley
• Year: 2015
• ISBN:
  9781119136095
• Edition: 1
• Topic: Business
• Subtopic: Wealth Management
• Index: Business

Thrive in a changing industry by putting your people first

Advisory Leadership is a practical and highly executable guide for financial advisors and finance professionals looking to thrive in today's changing financial services industry. Written by a leading financial advisor with practice improvement expertise, this book shows you how to master the art of leadership while remaining agile and adaptable. You'll learn the seven steps you must take to keep pace and thrive amidst the industry's evolution, with clearly articulated explanations and motivational action items. The discussion covers patience, integrity, compassion, respect, consistency, encouragement, and courage—the foundations of success and continued growth—and shows you how to practice what you preach with real strategies for living the vision and being a true leader.

The financial services industry is at a crossroads, between a generation on the cusp of retirement and the new generation stepping in to take its place. This transition has been called a crisis of culture, of values, and of communication, but it's really an opportunity. This book faces the changes head-on, and delivers practical solutions that start and end with your greatest resource—your people.

• Unlock the secrets to a people-first company
• Speak openly, walk the walk, and promote personal growth
• Reward firm-wide collaboration and a team mentality
• Reshape your company's DNA to thrive in today's financial environment

The industry's overarching question is one of differentiation: how can your firm stand out amid the rise of robo-solutions and an unpredictable future? Advisory Leadership shows you how a people-focused company culture can elevate a firm from surviving to thriving.

Chapter 1
Patience
Taking Your Time to Find the Right People

One of the questions I am asked most often in my position is how I manage two companies on two coasts. I always respond in the same way. It’s all about the people around me. I am surrounded by great, quality people who work hard and are as passionate about the work we do as I am. For me, that means working longer hours and racking up lots of frequent flier miles. But the payoff is worth the time and jet lag. Why? Because the culture that’s been established in both companies moves both ships forward and that creates success and growth.

That culture, which is very similar in both companies, is based on caring, respect, empowerment, collaboration, and a powerful sense of team. There is also a clear, and common, sense of purpose and mission in both companies.

That sense of team serves as the foundation that drives us forward, weathering growing pains and a changing industry toward innovation and profitability.

What we have accomplished in our culture—and I say “we” because credit is due to all of the people I am fortunate enough to work with—is not only potent, it’s game changing for companies that struggle to create a cohesive team in corporate environments today.

Employee loyalty and satisfaction are at the core of building heart culture, and it should come as no surprise that creating and cultivating this type of environment begins in the hiring process.

The first element of heart leadership is patience, and it is vital for leaders to exercise self-discipline during the recruitment, interview, and hiring process if they want to protect the integrity of the firm’s culture.

Before we get started, though, I’d like to share some truths about my personal leadership style.

Since the beginning of my career I have known that I wanted diversity of thought and collaboration. I wanted different voices. I wanted ideas. Also, I wanted to build a happy and healthy environment that people wanted to come to five days a week. What I did not want was to be a leader who was overcontrolling and commanding.

That desire to help others achieve happiness in their work and in their lives is a foundational part of how I lead and how I encourage others to lead. With new hires, setting expectations on day one (and even earlier in the interview process) helps determine whether a particular candidate is the right fit for my firm.

For example, when new employees come on board at one of my companies, I start with the same conversation that I have had for many years.

At Private Ocean, for example, I talk to them about our philosophy, our purpose, and our culture, and what we want to achieve as a whole. I talk about my personal mission—what drives me—and the company mission. I want to make sure we’re on the same page when it comes to financial planning and wealth management and how to take care of clients. For us, financial planning should be objective and focused on helping people achieve their life goals—what’s important to them in their lives. Financial planning and investments are just the tools we use. Making sure potential candidates share the same philosophies that guide basic priorities of the company is the first thing I like to nail down.

Then I give them my “I Have a Dream” speech, in which I acknowledge that if all of us had unlimited money and resources we would likely be on a tropical island someplace, sitting in a hammock on the beach and watching the world pass by, or engaged in philanthropy.

I tell them that I understand that the primary reason most of us work is because we have to. Everyone has bills to pay and, most likely, families to support. But aside from money, my dream is that when an employee wakes up and puts her feet on the ground, she’s excited about going to a cool place to work, doing cool things with cool people, and working with cool clients.

Appealing to people’s emotional connection with and pride in what they do is one of the keys to unlocking heart culture. Whether they’re passionate about coaching their daughter’s soccer games, traveling the world, or—in our industry—helping people achieve their financial goals, the result of inspiration is the same. People invest more of themselves in something they believe in and are passionate about. Get a group of these people in one place working toward the same goal, and a business can reach new heights.

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PERSPECTIVE: SAVING WHALES

If you were faced with the job of stuffing a thousand envelopes and then hauling them to the post office to be stamped and mailed, you could view it as a repetitive, boring, and menial task. Some would argue that they’re too skilled or too educated to do that type of thing. But what if you were stuffing envelopes for a cause you were passionate about? What if you were saving whales, or, in our industry, fostering better client relationships and offering higher-level service?

One person may say with a heavy sigh, “I’m too talented to do this,” while another would say with great enthusiasm, “I’m saving whales!” No matter the task at hand, it’s always about perspective. It’s a leader’s job to identify this perspective and passion in the hiring process, and foster an attitude that reminds employees that what they do is for the greater good of the firm and their clients. Their work has a higher purpose!

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Now if that approach described in the previous Saving Whales sidebar seems a bit of a reach for leaders (and especially advisors) to grasp, consider this: The financial industry today is in a state of transition, with the average age of advisors rising (mid-50s and up) and the available pool of talented young financial planners struggling to keep up with demand. Part of a leader’s job is to adapt to this evolution and recognize that new hires have very different values from their parents. What I have found in both my companies is that heart leadership—and heart culture—really resonates with Next Gen employees.

Next Gen Employees: Changing Values, Changing Culture

In the past 10 years, culture has played a growing part (and often is the deciding factor) in younger candidates’ search for a firm that aligns with their goals and values.

What’s changed from the past? Everything! Although you may have said to yourself that you’d never give the “In my day . . .” speech that you heard from your parents, you may catch yourself saying that you didn’t have the Internet when you were growing up, or that texting was passing notes in science class. What’s iOS? What’s Wi-Fi? You tell your children, “In my day, you took the job you were given at the rate they were willing to pay, you put in 60 hours a week, you took one vacation a year, and you were grateful!”

All kidding aside, employees today have different priorities from previous generations, including a higher value placed on work/life balance, stress-relieving activities, and even a passion for social consciousness and community engagement. In some instances vacation and paid time off are worth as much or more than a higher salary, and flexible schedules that give employees more remote options are considered far more attractive than a corner office. Some truly forward-thinking firms throw in additional perks that were unheard of years ago—job sharing to learn new skills, flexible project assignments, gym facilities, paid time off for volunteer work, and educational reimbursement—to help sweeten the deal. Most of all, firms are less and less committed to confining employees to a set job description and instead give employees the ability to think outside of their defined roles.

Taking Your Time during the Hiring Process

As advisors, it’s important to consider what we’re up against when it comes to attracting new hires. Recruiting for the best new planners (and any other position in a firm) these days is like lacing up the gloves for a title bout. The talent shortage has heightened the level of competitiveness across our industry, and it’s crucial to find a way to separate your firm from the pack. That’s why now the differentiator for many firms is their level of commitment to client service. In my firms, one of the major components of choosing the right employee is finding someone who shares our philosophy of taking great care of clients—both internal and external. The competition is fierce, and with so many advisors interested in succession planning, there’s definitely an urgency in fighting for those candidates who look best on paper.

But that’s a problem if you’re looking to build heart culture. A candidate with a stellar résumé does not automatically translate to a stellar addition to your firm. Finding the right person takes time and patience, which cannot and should not be cut short for the sake of winning a race. In both of my companies we go through an extended hiring process that is key to creating the right team.

What are the benefits to investing time in a longer hiring process? If you have one formal conversation with someone for an hour, you’ll likely get plenty of rehearsed answers—anyone can be up for “game time” for an interview or two. But if you have several conversations with different groups of employees in different settings, you’ll get a much more complete picture of candidates. Do they communicate well with different teams? Do they share the same passion for what they’ll be expected to do? Are they team players? What do they want to achieve in their personal and professional lives over the long term? Who are they?

Taking your time during the hiring process means that you’ll be much more likely to choose someone who has an understanding of expectations, shares your business philosophy, feels his ideas will be heard, and is excited to be on board. Those qualities lead to lower turnover and the fostering of greater loyalty over time. The way we explain it to candidates: It is to their advantage to be learning more about us and the work.

Four Steps to Hiring the Right Candidate

The hiring process can be daunting, and firms may be tempted to choose an applicant based on impressive credentials rather than finding a cultural...