Finding, hiring, developing and retaining good talent is seen as the best way to grow a financial advisory business in the next few years, but according to a new poll released April 10, few elite RIA firms seem to be taking the steps needed to succeed at these challenges.
Leaders of some of the nation’s largest advisory firms admitted they are struggling to identify the right talent, expand their talent pools, and implement initiatives that help drive diversity, according to a poll conducted at the 2019 Elite Advisor Summit held by BNY Mellon’s Pershing last month inFort Lauderdale, Fla.
“Talent shortage is by far one of the biggest threats to growth among advisory firms,” said Gabriel Garcia, managing director, Advisor Solutions at BNY Mellon’s Pershing. “It is critical that advisory firms start putting in place measures that will increase their appeal as a ‘best place to work,’ build their reputation in the marketplace and, perhaps most importantly, help them tap into new and diverse talent pools.”
The 2019 Elite Advisor Poll, conducted among the executives attending the two-day, invitation-only event, reveals that the majority (59%) of the leaders at the country’s most preeminent registered investment advisors (RIAs) and institutional firms are finding it challenging to find the right fit for their firms.
About 4 in 10 (41%) are not entirely satisfied with their firms’ efforts to hire women or ethnic minorities. For the majority (59%) of executives responding to the poll, the main challenge in hiring women and ethnic minorities is the lack of enough qualified talent from these pools.
Yet, when asked what their firms are doing to reach a more diverse talent pool, almost half (47%) of the executives indicated that they have not implemented some of the best practice initiatives and programs, such as recruiting at schools with a diverse student base, removing subconscious biases from job descriptions, diversity training, etc.
Additional highlights from the poll
- Recruiting: Only 5% of elite advisory firm executives say they have no challenges with recruiting. Aside from the challenges in finding the right fit, executives (20%) say there is a lack of talent in the marketplace and that attracting talent to their firm is a challenge (17%).
- Retention: Providing opportunities for career growth is deemed to be the most effective way to retain employees, according to 55% of respondents. Only 16% say competitive salary is an effective tool for retaining employees.
- Diversity: Slightly over a quarter (28%) of respondents say their firms are expanding recruiting efforts to include schools with a diverse student base. Meanwhile, only 9% say they offer diversity training and only 14% say they are reviewing job descriptions to remove any subconscious biases from the hiring process. Further, a mere 2% of executives say their firms are measuring progress on diversity.
The Elite Advisor Poll was conducted live via mobile phones during the 2019 Elite Advisor Summit, which took place March 11-13 in Ft. Lauderdale.
The poll gauged attendees’—which comprised 86 executives of some of the nation’s largest advisory firms representing an average AUM of $9 billion and a median AUM of $1.8 billion—views and concerns around talent and technology.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
