Financial advisory firm leaders often miss the mark on the most important assets of their business. And no, it is not your clients. It is your people, a BNY Mellon Pershing executive said.
“Your clients are very important, but without your people, you really don’t have a business,” said Christina Townsend, managing director and head of relationship management for wealth solutions at BNY Mellon's Pershing.
It did not surprise Townsend when leaders of some of the largest advisory firms, in a poll conducted by BNY Mellon, said the biggest strategic challenge impacting their firm’s ability to achieving a long-term growth plan is hiring and retaining talent. The survey was taken at BNY Mellon Pershing’s Elite Advisor Summit, held virtually in March. The average assets under management represented by firms at the summit were $10 billion.
“It is something that is top of mind to grow their business,” said Townsend. She said BNY Mellon has for several years asked this group of elite advisory firms about the challenges they see around growth. “And the topic of attracting and retaining talent continually ranks as one of the biggest challenges for them."
There are many reasons for that, Townsend said. For one, she said people generally do not gravitate to financial services because they are not aware of the industry’s offerings. The industry, she said, must educate people about the many jobs within financial services, more specifically within the RIA advisory landscape. “You don’t have to be an advisor. There are operations roles, marketing roles compliance and regulatory roles, technology roles,” she said.
Townsend said advisors need to change their approach to hiring and focus on underlying skills instead of technical skills. She explained that 40% to 50% of the hires within the RIA firms come from other RIA firms, which means that a lot of people are hiring for specific experiences and technical skills. But she said if you are planning the long game, it may be better to look at potential hires that have underlying skills that are not necessarily found in people in financial services. Those potential candidates with underlying skills are good at client service, they are great project managers, great at interfacing or dealing with complex challenges, she said.
“We encourage firms to really think about for that next position. Do you need to hire within financial services, or could you look for people that may not have technical skills on their resume, but they encompass everything you want for your firm?” she said.
Townsend said the source for potential candidates is also important. “So many people rely on networking, which is OK, except our networks tend to be a lot of people who are much like us with very similar experiences,” she said.
She said BNY Mellon encourages advisors to hire from a broader pool of candidates through sources like intern programs and to use a recruiting firm for more strategic hires. They are also encouraged to invest in coaches to help them strategically think about finding candidates beyond traditional networking. Townsend said diversity of all types must be a factor when looking for candidates. “Bring someone in who is of diverse thought who is going to bring in diverse ideas,” she said.