Employees at best places to work focus on the person — and the fun

Winners of the inaugural Best Places to Work for Financial Advisers discussed their challenges and secrets to success in a workshop preceding the InvestmentNews awards lunch on Tuesday in Chicago, where the top 50 best places to work were recognized for their outstanding dedication to employees.

Recruiting, training and retaining colleagues is more difficult and crucial than ever because of industry growth and changing attitudes toward job satisfaction, many of the advisers said.

Because of hiring constraints, twice as many financial advisory firms are running at capacity compared with those that are not, according to research presented at the hour-long workshop. It takes 20 months to find a practicing partner and six months to sign a lead adviser, the research concluded.

“The competition for talent is infinitely more intense than the competition for clients,” said David Berman, co-founder and CEO of Berman McAleer, after his advice firm won the top spot among firms with 15 to 29 employees.

Even though industry salaries have grown at double-digit rates between 2015 and 2017, pay and benefits ranked last among seven factors when employees rated employers, according to the results of employee questionnaires that provided 75% of the score used in selecting the winning firms.

“Compensation is important,” said Rick Kent, president of Merit Financial Group. “More so, people are motivated by purpose,” particularly millennials.

(More:​ Top 50 best places to work for financial advisers)

As firms mature, founders are confronted with sustaining their entrepreneurial mindset.

“There’s not that many people coming into our business that have the eye of the tiger,” said Kay Lynn Mayhue, president of Botsford Financial Group, a panelist at the workshop. Botsford Financial Group merged with Merit Financial Group in March.

In fact, the percent of “owner professionals” at financial advisory firms dropped between 2013 and 2017, falling from 59% to 34%.

“You just can’t hand out equity when someone walks into the room,” said Matthew Sirinides, senior research analyst for InvestmentNews. “This isn’t the VC industry.”

Allison Felix, chief operating officer of Cassaday & Company Inc., said her 49-employee firm with less than $3 billion under management offers an “almost embarrassingly low” base salary of $17,000, part of a design to inspire teamwork by tying overall comp to firm revenue growth.

The widest gaps between employee attitudes at winning firms and others were in corporate culture and communication-specifically, to what degree employees understand how the firm is doing financially–and in training, development and resources.

“We actually have a bad-idea contest,” Ms. Mayhue said.

To be eligible to win, an employee whose idea doesn’t pan out surrenders one of two red tickets she or he is allotted each year.

“If we fail, we want to fail by trying versus fail by not taking chances,” she said.

Mr. Kent, noting that 90% of financial advisory firms last only one generation, cited the irony of financial planners not planning.

“How dare we commit to clients, ‘we’re going to build a plan for you,’ and then we don’t do it for our businesses. That’s sad,” he said.

(More: Culture can slip as firms grow)

Winner of Best Places to Work for firms with at 50 or more employees was Balasa Dinverno Foltz, which requires employees take a full month off doing whatever they want after each five-year anniversary at the firm under a sabbatical policy begun two years ago.

“We want you to disconnect,” said Susan Korin, the firm’s chief operating officer and chief compliance officer. “We see that engagement come back many times over.”

The top firm for those with 30 to 49 employees was JMG Financial Group.

“You do need to enjoy where you go every day,” said Yonhee Gordon, principal and chief operating officer of JMG Financial Group. “You’ve got to make it fun.”

– Steven R. Strahler is a freelance writer.

Related Topics: Practice Management