Hiring and Retention Trends

PizzichilloFrank Pizzichillo, AIF®, RIA Regional Director

The long-term viability of an independent RIA rests, in large part, on its ability to attract and retain top talent. The fact that 12,000 to 16,000 financial advisors will retire for the next ten years has fueled intense competition to attract the next generation of stewards of our nation’s wealth.

As a result, many RIAs have had to rethink their employment practices in recognition of the shared characteristics of the four generations now in the workforce.

Compensation is a critical lever an RIA must get right when it comes to building long-term sustainability into their firm. To get compensation right, an RIA must consider the generational and motivational factors that drive your employees’ approach to work.



Source: BlackRock, The 2015 Elite RIA Study

Generations and Motivations

Many factors shape the way people approach work, including when they were born. Some RIAs have employees spanning four generations:  The Silent Generation (born between 1925 and 1946), Baby Boomers (1946-1964), Generation X (1965-1980) and Millennials (born after 1980). Each generation has distinct attributes, shaped by their life experiences and the values they have embraced along the way.

Take Baby Boomers as an example. Generally speaking, Boomers have been defined by their work. They take pride in knowing they’ve done a job well done, and for the most part, believe rewards will follow. Employment perks and titles have meaning to those in the Boomer generation. The concept of a work/life balance as critical to overall well-being didn’t come into acceptance until long after they had established their professional identities.

Generation X employees have a different approach to work. They tend to be less formal, and question authority. They were born during a time of declining population growth and lived through downsizing environments. They are global-thinkers, self-reliant and resilient. These characteristics make them adaptive to job instability. They value time spent away from work, and would be willing to sacrifice pay to strike the right work/life balance. Money and perks don’t hold the same allure for Gen X as they do for Silent Generation or Baby Boomers.

Total Rewards System

When building for sustainability, an RIA should aim for a total rewards system with cross-generation and motivation appeal. A total rewards system integrates pay, benefits and overall experience . . . the key elements that employees value the most. Done right, a total rewards system provides the benefits employees value greatest, while also reinforcing the RIAs culture and enhancing the overall work experience. Non-compensation programs which become key components of a total reward system include work-life initiatives, such as wellness programs, flex time, and work-from-home initiatives. They also include training and development programs, and peer and corporate recognition opportunities.

A multi-generational team working towards a common goal can provide an RIA with a significant competitive advantage.  The key is to embrace the perspectives and approaches each generation has to offer and create a flexible work environment and total rewards system that values and motivates everyone, regardless of age.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, a Registered Investment Advisor.

The A, B, C’s of a Sustainable Practice


Michael Brady, CIMA®, RIA Managing Director

In the effort to build a sustainable practice, many advisors spend a good deal of time and money creating strategies to attract new clients.  However, in the race to acquire new clients, some overlook the potential for organic growth.

Organic growth refers to increased asset management fees, fees for new service offerings, or client acquisition based on referrals. One strategy known to help accelerate organic growth involves segmenting your existing client base to understand better the needs of your clients and tailor services and offerings around each segment.

You don’t have to use a complicated rating system, simply classify all of your clients as either “A,” “B,” or “C” according to guidelines such as these.

Dispersion of Clients
Once segmented, you can more easily see where you are and where you should be spending your time. If you are like most advisors, around 20% of your clients make up 80% of your business. Advisors with whom this 80/20 rule apply often find that the demands of serving the “B” and “C” clients makes it challenging to ramp up service levels to “A’s.”

Segmentation Strategies
Once your client base is segmented, you can dive deeper into the needs of your “A” clients and more easily identify common behaviors and priorities.  For example, you may find your “A” clients are all in similar professions and may respond well to a certain delivery style, or have similar needs which could rise to new service-offerings or strategic partnerships with other service providers. You may also find coverage gaps, or clients who don’t have a “go to” person at your firm (other than you) to contact for service. If no such resource exists, you now have a roadmap for hiring criteria.

When you look at your “A” group as a whole unit, you can also begin to design networking events, client appreciation outings and outreach efforts tailored to their collective interests.

In addition to devising strategies designed to prompt your “A” clients to become engines for growth, you must also create goals for the “B’s” and “C’s.” Ultimately, you will have to decide how to staff for and provide service to the “C” clients in such a way that is consistent with your brand and does not create a drain on your resources. You will also want to develop programs to cultivate the “B’s” so they eventually become “A” clients.

Ultimately, the segmentation exercise will help you identify the best-fit financial and service solutions for clients at every point along your client continuum. The end-result is better served clients, and a more efficient and sustainable practice.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Holdings are subject to change. Brinker Capital, a Registered Investment Advisor.