One of the many great things about the RIA industry is our deep-felt commitment to the fiduciary rule, which states that advisors must put the interests of the client ahead of their own. RIA owners have built incredibly successful businesses by using this principle as their guiding light: Always put the client first. But sometimes there is a hidden side effect to this obsession with the client—we can end up neglecting our employees. Without engaged and motivated employees, the number of clients an RIA can serve will be drastically reduced and the quality of service compromised.
RIAs spend immeasurable time, energy and money developing an appropriate client onboarding process. Understanding that first impressions last a lifetime, many firms have mapped out exactly what will happen once a client says, “Sign me up!” RIAs know which team members will do what: someone will reach out to the client to begin the paperwork and transfer of assets process; a welcome email will be sent, detailing the roles and responsibilities of the various team members; the next two or three meetings are carefully scripted, as the assets are transferred, and the new investment models are implemented—nothing is left to chance. Everyone wants that new client to have a great onboarding experience so they will feel valued and hopefully impressed enough to tell their friends and family about the great wealth manager they just hired.
Unfortunately, this thoughtful experience does not translate to the onboarding of our employees. We all claim “our employees are our most important asset” and, yet, after putting a candidate through a months’ long interview process, when the new employee arrives at the office on their first day, half the firm doesn’t know who they are or why they are there. As the new hire is standing at the coffee maker, several people will approach them and ask, “May I help you?” And they have to keep saying, “I work here!” And it’s not like RIAs are enormous bureaucratic organizations of thousands of employees—this scenario plays out frequently across the country in RIAs of 10–15 employees.
RIAs need to realize that onboarding of an employee starts weeks before the new hire arrives in the office, not the morning of their hire date. Too many new employees arrive to find no dedicated workspace has been set aside for them, their computer is not configured (sometimes, the computer hasn’t even been purchased!), their employment documentation is not ready, and, most tragically, the employee’s roles and responsibilities, including their general career path, have not been discussed internally by their new supervisors.
As part of our employee development course inside The COO Society, I interviewed Stacey McKinnon of Morton Wealth, and she laid out the typical onboarding plan for their new hires at their firm. First, employees meet with her, as the firm’s COO, to discuss Morton Wealth’s career pathing program, core values and how the culture is reflected at the employee level. Next, they meet with the firm’s CEO, Jeff Sarti, to understand the company’s vision and to discuss the importance of culture, yet again. Then, they meet with Meghan Pinchuk, the firm’s CIO, for a presentation covering the investment philosophy and due diligence process, as well as to learn how the C suite is dedicated to the growth of their employees. This is a true “wow” experience for employees and sets a long-lasting first impression.
David DeVoe has written in this publication that, “Future leaders become strong leaders from the coaching, molding and guidance of their managers.” He continues, “Despite the universal knowledge of the importance of their people, firms in the industry are not investing in this asset as significantly as they should.” During my interview with him as part of our employee development course, David pointed out that by prioritizing employees, it is the clients that actually benefit the most. “If you really treat your employees well, coach them properly and really invest in them … if you help them become greater, not just at their jobs, but in their lives, you’re making happier people that will interact with your clients on a day-to-day basis. Clients can sense the person they are speaking with feels taken care of, that they have been empowered, they have been coached, and they are jazzed up and excited. There’s no way your client experience won’t go up in that kind of environment.”
We must do better as an industry. We can no longer hide behind the fiduciary rule or statements like, “I got into this business to service clients, I’m just a bad manager of people, there’s nothing I can do about it.” Our employees must be treated better. As David DeVoe wrote in his article, “Firm founders and management have invested heavily—both technically and emotionally—to achieve the world-class level of service that they provide their clients. It is time for advisors to invest as much energy in their staff as they do their clients.” And that starts before their first day of employment and extends beyond their onboarding program.
Matt Sonnen is founder and CEO of PFI Advisors, as well as the creator of the digital consulting platform The COO Society, which educates RIA owners and operations professionals on how to build more impactful and profitable enterprises. He is also the host of the popular COO Roundtable podcast. Follow him on Twitter at @mattsonnen_pfi
