Fidelity hosted another Inside Track, and this time there were over 200 attendees in Boston. Here are five presentations of note.

Have “Mojo”

Bo Burlingham, the best-selling author of Small Giants: Companies That Choose to Be Great Instead of Big, talked about the characteristics that make a company great.

He calls it “Mojo,” the business equivalent of charisma. “When a leader has it, you want to buy from it, you want to work for it. It is a feeling when you are in the presence of a real special company, a great company,” he said. “It is kind of like pornography. It is hard to define, but you know it when you see it.”

He listed six commonalities in the companies he saw as great:

  • A clear vision. The owners must know who they are, what they want and why. If not, they can’t make hard decisions. His advice for RIAs is to ask: “What is your vision?” Describe in detail how your employees will view your firm in 10 years. What will your clients say about it?
  • Community ties. Great companies are rooted in the communities in which they do business. RIAs must ask, “What can I do to get more into the community?”
  • Great customer service. Great companies enjoy close personal ties with customers and suppliers. Customer service is a skill that needs to be hired. That means RIAs must hire people that can project warmth. Have you asked your employees how you can improve the customer experience?
  • An environment that puts employees first. Do your employees know your higher purpose for being in the business? Do they understand it and do they define the firm’s culture?
  • Strong financials. Stable gross margins are necessary. Burlingham suggests that the management be open-book, because transparency with employees allows them to make smarter decisions. RIAs must ask themselves: What is the greatest threat to your employees’ jobs? If you know it, they will fix it. How well do your employees know your financial goal? Make it clear that the better you are going to do, the better they are going to do.
  • Passion. The owners and leaders of great businesses are in love with what their companies do. They all had a passion to make the world a better place and they wanted people to know it.

Hiring For Tomorrow

The number of advisors is declining, and the financial service talent won’t be able to fully replenish the roles of those exiting the industry.

Jylanne Dunne, an SVP in Fidelity Institutional Wealth Services’ practice management and consulting department, addressed this problem in her presentation, citing Cerulli Associates research that shows the number of advisors in 2004 was 339,450, a number expected to decline to 280,859 in 2017.

Fidelity research found 67 percent of firms do not have a succession plan ready for implementation, she said, which proves the need for younger advisors. Yet those younger people do not seem to want to be in the industry. Harvard Business School research found that the number of potential graduates entering the financial services industry is decreasing. It went from 45 percent in 2008 to 27 percent in 2013. We are not seeing the interest, Dunne said.

Fidelity’s research of interns found that only 9 percent of them are familiar with RIA firms.