In Practice September 14, 2020

PANC 2020: Succession Planning, Mentorship and Practice Diversity

Because of its fundamental importance to American lives and livelihoods, panelists agreed, the workplace is the right place to nurture diversity and inclusion; they also agreed the adviser industry has a whole lot of work to do.

Reported by

The opening day of the 2020 PLANADVISER National Conference included a frank and actionable discussion about what has long been a critical and pressing issue: the lack of diversity in the retirement plan adviser and wealth management fields.

On the digital panel were Teresa Hassara, head of workplace solutions at Massachusetts Mutual Life Insurance Co. (MassMutual), and Amy Philbrook, head of core market sales and workplace investing at Fidelity Investments. The pair boasts decades of retirement industry experience working across a wide variety of roles, as well as many years of engagement on this crucial and evolving topic.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

The pair stressed that advisers need to act now to help change the face of this industry, which is overwhelmingly white and male. Not only is this the right thing to do morally and ethically, the panelists agreed, it is also of paramount importance for the continued success of advisory firms and their service provider partners. Simply put, the face of America grows more and more diverse every year, yet the adviser industry does not.

The numbers bear this out. Right now, just 19% of financial advisers in the U.S. are women. When comparing that with the professional fields that intersect with the financial and retirement advisory space, the problem is thrown into sharper relief. Roughly 52% of accountants are women, and 32% of attorneys are women. At the same time, even though African Americans make up about 13% of the United States population, the U.S. Bureau of Labor Statistics (BLS) reports this group accounts for only about 7.6% of financial services professionals.

“To remain successful in the long term, our adviser population has to reflect the American society at large, and it doesn’t do that right now,” Hassara said. “I can confidently say, from years of experience working on this issue, that no real progress can be made without a concentrated effort across all levels of an organization.”

Philbrook agreed with that statement, noting that last year was the first time in many years that the number of financial advisers who retired from their jobs outpaced the number of new advisers entering the profession. This means succession planning and diversity challenges are tied closely together.

“One piece of good news is that the job of being an adviser, frankly, has changed in a way that will make the role more attractive to different groups and types of people,” Philbrook said. “What I mean is that money management is no longer the main part of the job. Today, advisers can rely on powerful technology and solutions to do this work. Instead, being an adviser now is really about communication, service, goal setting and creating deep connections.”

Hassara and Philbrook said this means the door is wide open for people with highly relevant and transferrable skills to enter the adviser industry from other areas of the economy that are already much more diverse. Think the hospitality industry or even human resources (HR).  

“That’s the good news,” Philbrook said. “The talent pool is actually really big, because of the way the necessary skills have changed. We have to embrace this notion and accept that the lack of diversity is not a matter of a lack of qualified or interested diverse talent.”

Along these lines, Hassara pointed to various approaches her firm is taking to “make sure we are not just talking about diversity and inclusion.”

“One way we are taking action, for example, is by analyzing our own sub-advisers and asking very tough questions about their approaches to diversity and inclusion,” Hassara said. “We aren’t just settling for polite answers, either. We want to see the actions and the evidence that this matters to them. If it doesn’t, that is going to prompt a tough conversation on our end about continuing to partner with these groups.”

Philbrook emphasized that plan sponsors are also paying attention to such things—and they, too, are becoming increasingly vocal and demanding.

“We hear a lot of questions from clients along these lines,” she said. “Plan sponsors want a partner that can understand and help them to respond to the growing diversity within their own workforces. In one clear trend, they are asking about Spanish language capabilities, and they want to know, ‘Are you just using translation services or do you actually have people within your firm that are from that culture?’”

In terms of actionable recommendations for advisers seeking to address this challenge, the panelists had a lot to say, starting with the fact that traditional recruiting methods are themselves a core part of the diversity problem. For starters, college graduation is way too late to attract new types of people into this profession, they said. Furthermore, business- and finance-focused recruiting fairs on the typical college campus are likely not going to be any more diverse than the adviser industry itself.

“Don’t just do the traditional recruiting fairs and expect that you will have success changing this industry,” Philbrook warned. “You have to put yourself in a position where underrepresented talent gathers. So, you could work with faculty to identify promising talent, or make connections with the clubs and groups on campus that represent and connect minority communities.”

As noted, firms also need to be open to the idea of recruiting people from other fields who don’t necessarily have direct financial services experience but who nonetheless have the skills the modern adviser needs—the ability to create deep connections, build trust, etc. Once talent is identified, onboarding must be flexible and must allow for a substantial period of transition, the panelists agreed.

“The idea of moving to a sales incentive-based position is a big road block for many people, but it doesn’t need to be,” Philbrook said. “The industry absolutely has the means and the capability to support people and help them transition into the role of being an adviser. We have that obligation.”

“Smart people can learn this industry, but it’s the passion and empathy that you can’t teach,” Hassara said. “If you can find people with these qualities, you can teach them the rest, and you can create a workable compensation plan.”

In Practice September 14, 2020

PANC 2020: Building a Team—and a Culture—in a Virtual Environment

Advisers share tips on how to work effectively from home during the pandemic.

Reported by

At the “Building a Team—and a Culture—in a Virtual Environment” session held on the first day of the 2020 PLANADVISER National Conference, which, itself, was held virtually for the first time, speakers gave tips on how to create a sense of teamwork during the COVID-19 lockdowns and how to run an engaging videoconference.

The first thing retirement plan advisers need to realize is that with all—or many—advisory practice employees working from home, the casual exchange of ideas doesn’t happen, said Joe DeNoyior, president, retirement and private wealth, Washington Financial Group. “The No. 1 thing is to try different ways to get the exchange of ideas that would have occurred at the water cooler—or with someone popping their head into a colleague’s office—going,” DeNoyior said. In fact, Washington Financial Group made team building such a priority that teams and departments are now meeting more often than they did when they were in the office, DeNoyior said.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

He also said it is important to “rotate the agenda to keep people engaged” as well as to give employees an opportunity to interact on topics outside of work.

To that point, every morning, from Tuesday through Friday, for 15 minutes, the practice holds a call where employees can play games or get to know one another a little better by answering a question, such as “What is one thing about your professional and your personal life that your co-workers may not know?”

DeNoyior said that about 80% of the staff participates in these exercises and that they have given “people who probably did not say hello to one another in the office an opportunity to get to know one another.”

In addition, Washington Financial Group holds monthly “all hands” meetings, and supervisors hold periodic one-on-one meetings with their staff members, DeNoyior said.

Steven Dimitriou, managing partner at Mayflower Advisors LLC, said his firm is holding similar meetings but added that asking workers to send in questions about the company or their jobs during team meetings gets them more engaged. “We are really trying very hard to keep the dialogue moving about where the company is headed,” he said, but he added, like DeNoyior, “Don’t keep it strictly about business. You don’t realize how much of your corporate culture has to do with all of the personalities in your office and what is going on in their lives, so find ways to keep that going.” Mayflower Advisors has found to ways kept interactions lighthearted through “virtual happy hours,” he said. “They have given everyone an opportunity to socialize.”

Fortunately, just before COVID-19 hit the U.S. shores, Mayflower Advisors hired a director of strategic communications with the idea of promoting the practice to sponsors and outside partners. With the spread of the coronavirus and the proliferation of working from home, “as it turns out, a significant portion of her job is inwardly focused,” Dimitriou said.

Mayflower Advisors has also been able to keep morale up and build a sense of purpose by getting the whole company involved in charitable and philanthropic events, he said.

Mike Goss, executive vice president, Fiduciary Investment Advisors LLC, noted that one of the challenges of working through a pandemic is the dilemma of how to introduce the staff to new hires. Fiduciary Investment Advisors hired a few partners in Chicago and decided to help the staff get to know one another through weekly trivia happy hours.

Like the other panelists, Goss said it is important for retirement plan advisory practices not to focus all their meetings on work but, rather, to consider the “health and wellness of their employees.”

Goss said the firm’s partners brainstormed on how the company could help its community during the pandemic and decided to offer virtual internships to 130 high school seniors, 70% of whom were people of color or underrepresented groups at advisory practices. Each one had a dedicated mentor, he noted.

As to when retirement plan advisory practices are expecting to return to the office, Goss said right now all of Fiduciary Investment Advisors’ workers are at home and that the plan is to have limited numbers of employees return to the office on January 1. In reality, Goss said, it is more likely that that process of returning will begin in late spring.

DeNoyior said his firm “made the call early to work from home” and has left the decision as to when to return up to each regional office.

At this point, Washington Financial Group is permitting those employees who want to return back into its offices, but the reopening has been on a rotational basis, with only 20% of the staff members in an office at any one time, DeNoyior said.

He said the plan is to return the offices to “semi-normal” capacity on January 1. But, because commuting from the suburbs into Washington, D.C., is so time-consuming, the practice is considering allowing some employees to work from home in the “new normal.”

Because Mayflower Advisors has a private client division that has a cash management function, the business was deemed essential, and the practice never fully shut down, Dimitriou said. That meant that five people out of 30 were in an office. Mayflower has also been careful to restrict workers from traveling to other offices as a way of hedging against the spread of the virus, Dimitriou said. “I think that was a smart move on our part,” he added.

At this point, Mayflower’s offices are permitting 25% to 30% capacity and rotating people, he said. For the foreseeable future, Dimitriou does not expect all the firm’s employees to return to the office.

Goss agreed, saying that he has found he is far more productive working from home and he expects many retirement plan practices to make remote work an option.

«