Secrets Behind Success: How do top firms retain great talent? (Hint: It’s not all about the money)

Sep 26, 2018 @ 12:01 am

Most leaders at some point have found themselves discussing how to “keep” a certain talented individual from leaving the organization. Such conversations might have been prompted by a reorganization that impacted the person's role or, just as often, a job offer extended by a competitor to lure that person away. In any event, the central question of these retention meetings is usually: What's it going to cost us to keep this talent with the firm?

One consequence of this calculator-and-spreadsheet-driven approach to retention is illustrated by the InvestmentNews 2018 Adviser Compensation & Staffing Study Update , which found that between 2015 and 2017 many RIA firms saw double-digit salary increases across many positions, with lead advisers experiencing a 23% increase over that period. Even when we consider the hot battle for advisory talent, we must acknowledge that persistent wage hikes won't be sustainable in an industry that is experiencing mid-single-digit revenue growth rates. In other words, our industry must rely on a range of strategies to keep talented people engaged and performing over the long term.

Among many powerful tools for retention are: employing business experts who can effectively manage human capital; offering relevant professional development opportunities for all; and making a commitment to be an “employer of choice” in a firm's various markets. But, within these categories are a wide array of potential strategies and steps. Which are proven to deliver real results?

To help answer this question, we interviewed two leaders from top advisory firms and two executives from Pershing, with the intent of revealing best practices for retaining top talent. On the RIA side were Carina Diamond, managing director of Akron-based Springside Partners, and Mark O'Keefe, chief financial officer for Boston-based Bainco International Investors. Mark Tibergien and I shared perspectives from BNY Mellon's Pershing Advisor Solutions.

From this session was born The Secret to Adviser Retention , the third part of a three-video miniseries on staffing and compensation strategies, which continues to expand upon our popular “Secrets Behind Success” firm leadership theme. Here are some important points from the video:

  1. Retention is a win-win-win – Firms invest a great deal to bring advisers and other talented people onboard and build their understanding of the firm's operations and culture. If an employee walks out the door after just a short period, the firm will lose this investment. Clients who interacted with the employee will wonder what happened. And the former employee may risk being labeled as a “job hopper” by future prospective employers. Mark O'Keefe emphasized that everyone everyone gains when a firm builds an environment in which employees can contribute, feel valued and want to stay for the long haul. Such an environment helps the firm retain clients, reduces turnover costs and builds a culture that's known for cultivating long-term relationships. It's win-win-win.
  2. It's much more than a job – People across the organization want to feel as if they're part of something bigger and more meaningful than just a job. When firms are proactive about communicating goals and progress, people perceive the momentum and can understand how they contribute to it. Furthermore, firms that generate a spirit of camaraderie and fun (yes, fun), are more apt to have engaged talent both in the short term and the long term. Carina Diamond said that her firm cultivates a team spirit through such activities as celebrations for key successes and doing charitable work together in the community.
  3. Sound, vigorous management matters – Too often, advisory firms view compensation as the primary lever for retaining their talent. Money, however, cannot replace active, person-to-person management, including aspects such as goal-setting, training and candid performance feedback. Mark Tibergien offered this advice: reflect on your own career and how you were managed – and mismanaged – and let those experiences inform your own approach to effective leadership.
  4. Get creative with resourcing and benefits – Among firms that participated in the InvestmentNews survey, 4% of total overhead expenses involved paying for benefits (health, retirement, and other insurance). This is higher than the percentage spent on occupancy costs (rent, utilities) or on technology costs (computers, software, office machines). Why not look critically at benefits and look for opportunities to unlock their full value for employees? Mark O'Keefe said that his firm has been able to personalize aspects of the resources, training and benefits packages to meet the needs of its employees.

In the end, retention comes down to this: Ensuring that people truly want to be part of your organization for the long term. Firms must strive to really connect with every employee, to clarify the firm's mission and to articulate each individual's important and personal role in achieving it. The tools of retention – pay, benefits, etc. – are all there simply to keep this connection strong and mutually supportive.

After you've viewed this video about retention, you might want to check out the two other videos in this staffing-focused trilogy. The first –The Secret to Attracting the Best Talent– explores how successful firms have made recruiting a core business strategy (rather than ad-hoc activity). The second video –The Capacity Secret– discusses the importance of setting meaningful goals for expanding capacity and measuring performance. All three of these resources are part of Pershing's ongoing “Secrets Behind Success” video series for advisory firms.

BNY Mellon's Pershing Advisor Solutions provides a comprehensive array of practice management resources, programs and personalized support to help advisory firms manage and grow their business. You can engage with our consultants in multiple ways—receive guidance for implementing one of our programs, attend a Pershing event or practice management forum, or take part online through our webcasts. You can learn more at

About the Author

Gabriel Garcia is a Managing Director for BNY Mellon's Pershing Advisor Solutions in the Relationship Management group. Mr. Garcia works with registered investment advisers (RIAs) interested in developing and growing their practices, helping them to manage business issues they face. He engages advisers to help them make informed decisions around maximizing Pershing's resources and evolving their firms to become more scalable, profitable and productive. Mr. Garcia spent his previous 15 years with Charles Schwab & Co., where he held several leadership positions in sales, training and consulting. His last six years were spent working directly with RIAs. Overall, Mr. Garcia has 20 years of experience in financial services and has consulted with more than 100 firms ranging in AUM from $50M to $3B. He also is a frequent speaker at industry and national conferences. Mr. Garcia earned a Bachelor of Science degree in Finance and Business Administration from Radford University. When he's not in the office, he enjoys CrossFit and spending time with his family at the Jersey Shore. You can follow Gabriel on Linkedin at


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