Ahead of Wealth Management EDGE, JC Abusaid touches on what wealth executives can do to stay competitive
For wealth management executives, mergers and acquisitions might feel like the only way to grow and compete in the years ahead. Indeed, with the high volume of advisors eyeballing succession planning or hoping to streamline resources to focus on clients, M&A hype is all around.
According to the National Association of Plan Advisors, the ECHELON Partners’ 2023 RIA M&A Deal Report cites, “while there was a modest year-over-year decline, annual deal volume in 2023 eclipsed the 300 mark first achieved in 2021, reaching the second-highest annual total recorded.”
If your firm wasn’t acquiring another, or being acquired itself, I’m sure you knew one that was. But I’d argue that for sustained growth, wealth management firms must double down on their company culture by adopting a people-first approach, finding a comfortable way to market their services and focusing on their craft.
Here’s what wealth management executives can do to stay competitive without giving into the M&A frenzy.
Lead With a People-First Approach
My perspective is that M&A is the easy route – a viable option for firms who have the capital, but care less about company culture and employee retention.
Perhaps that last sentence made you stop in your tracks. As you’ve been accessing your firm's growth over the past year, has company culture fallen by the wayside? It wouldn’t be surprising, considering the dramatic changes the workforce has faced over the past five years.
But it doesn’t have to be this way. Early in my career, I was mentored by strong leaders to build a sustainable and resilient firm where employees come first, culture is key, hard work pays off and margins are important but not a short-term priority. In many ways, mentorship has made all the difference in the success of my firm and other people-first firms we know and respect.
I often think about how helpful it would’ve been if I had a mentor to help guide me earlier in my career, before I reached an executive track. That’s part of the reason our firm launched its own mentorship program eight years ago. While standing up such a program might feel like a monumental task, I’d argue it's imperative to start where you can. In my experience, matching colleagues based on compatibility and seniority is a good place to begin. Determine the focus of the mentorship program and what the individual goals are, and then encourage a regular meeting cadence to establish trust and boost their professional development. Your employees are smart: set the right conditions to help them connect with another peer and watch them take it from there.
Don’t underestimate the power of employee appreciation, either. Celebrating your colleagues can be as simple as acknowledging birthdays and anniversaries with a small gift card to a favorite restaurant or highlighting an individual’s contribution in the company newsletter.
There’s no one way to improve your company’s culture, but asking for direct feedback from your employees about what they need to thrive and how they like to be recognized are the right way to begin.
Focus on Perfect Execution
For industry professionals, a renewed commitment to client service should still be paramount. But what does it mean to focus on perfect execution, and how can they incorporate different workflows to improve outcomes and efficiencies? Incorporating best practices takes time, and being ruthless in our commitment to study our field and continue to get better is necessary.
You also need centralize core services to retain control on outcomes. All administration tasks, along with meeting material preparation needs to be centralized to achieve perfect execution along with scale. We are so focused on execution that we submit our self’s to a fiduciary audit every year. During the audit, our client records are reviewed along with meeting notes, deliverables and so on to make sure we are adhering to the highest servicing standards we can.
We cannot fall into complacency. When we work to build perfect portfolios, what wealth advisory services are we offering and how are we committing to fiduciary standards and going above and beyond for our clients? For example, we require all of our advisors to be Certified Financial Planners™ and we cover our employee’s continuing education. For employees that are looking to secure their MBA, we help contribute to that, as well.
There cannot be any shortcuts, so enforcing hard work and constant improvement throughout the whole organization is absolutely paramount. When firms are too focused on M&A, seeking perfect execution will always be a challenge.
Get Comfortable with Marketing
Finding ways to become more comfortable with marketing the firm's capabilities is crucial. First, we must reframe what selling truly is: explaining what you do and how you help others achieve their goals. Selling has never been our firm’s forte, we are a service organization through and through, and I imagine it's not yours either. In fact, selling has become a dirty word in the industry, but growth requires change. Moving Halbert Hargrove to a sales organization is probably one of the hardest transitions the firm has ever faced. However, we aren’t going it alone; we hired sales training experts to guide our team.
Over the past few years we’ve experimented with a handful of marketing strategies that have proved successful. By partnering with experts in public relations and marketing, we’ve found new ways to better articulate our message and offering to both clients and prospects while gaining industry-wide credibility. We’ve also focused on improving our SEO through digital marketing campaigns. Firms that want to compete today must demonstrate a mastery of technology. If you were to search your firm's name online, how would you rank your digital presence?
Above all, we’ve taken care to invest heavily in our community. Research has shown that volunteering improves executive function, and our team members are active volunteers, funders and leaders for many nonprofit organizations in the areas where we live and work.
I’ve always said that the investment advisory/financial planning profession is built on relationships and legacy. Failing to invest in your firm’s relationships with its employees as part of that strategy is a surefire way to fail. As wealth management firms continue to uphold their duties to establish legacies for their clients, so too must they do so for themselves.
JC Abusaid is CEO and President of, Halbert Hargrove and will be speaking at Wealth Management Edge. Join JC Abusaid along with 2,000 attendees senior leaders now
