PLANADVISER - November/December 2022 - 20

practice management / cover story
With interest rates having jumped and the economy
shakier, Hammond anticipates a slowing growth rate for
both advisory acquisitions and the practice-valuation
multiple advisers get when they sell their practice. When
advisers get a really high multiple at the M&A market's peak,
he says, they may not focus as much on the depth of the
acquirer's resources to help them grow. " But if the market
drives that multiple down, they'll receive less than what
they would have gotten at the peak. It's then that advisers
are going to start focusing more on, 'What's my life going
to look like on closing day plus one?' " he says. " Then we're
going to see a much bigger focus by firms on, 'How are we
retaining advisers, and are we helping them to grow organically?'
All of that stuff-support and infrastructure to help
advisers grow-is going to become much more important. "
6 Offer a sense of ownership.
" We want our compensation
to be aligned not only
with the things an individual
adviser cares about,
but that the firm cares
about, " Shoff says. " So
everybody at CAPTRUST
has a path to equity: Everybody
who works here can
be a shareholder. Having
broad-based ownership-
particularly because we've
been doing it for 24 years,
and we go deeper in the
organization to offer it-
is very unusual. It takes
more than advisers to take care of clients. "
Equity is one good way to get alignment between organizational
goals and individuals' career goals, Shoff says.
" Advisers
hate fences.
They're OK
with having
freedom
within a
framework ... "
" Another way is that our compensation structure has always
been variable, so there is unlimited upside for advisers, " he
says, describing CAPTRUST as unapologetically a growth
company. " Advisers hate fences. They're OK with having
freedom within a framework, but they'll say, 'Don't tell me
I can make only so much money.' " He sees value in having a
consistent variable-compensation structure, as CAPTRUST
does, and says some other firms allow advisers to individually
negotiate their variable-compensation agreement. " So,
for advisers at those places, they never quite know if they
got a good deal or not, " he adds.
SRP advisers are given the opportunity to become an
equity partner in the firm and/or to maintain part ownership
of their practice if they sold part of it to SRP. The firm
also proactively shares its financial data, such as sales
performance and financial
with our organizational goals, " Cullen continues. " So we
take our one-year strategic plan and divide that into a
series of specific goals, and then we're transparent about
what those goals are and about what the status of the
goals is during the year. We have bonuses for the entire
staff based on whether we reach those goals. " Those oneyear
goals revolve around data such as sales growth for
plan advisory work, sales growth for wealth management,
new advisers becoming affiliated with the organization or
having their practice acquired by SRP, revenue retention
for existing clients, and EBITDA [earnings before interest,
taxes, depreciation and amortization].
7 Make a work/life balance doable.
Oswald's Rini says that, to keep staff members, advisory
firms need to effectively balance a clients-first mindset
with a people-first mindset, the latter meaning people on
the advisory team. " In our industry, the mindset has always
been 'Clients first, clients first.' My focus is also on making
sure our team members' needs are being met, " she says.
" I've seen how, when people on our team feel their needs are
also important, they feel more able to treat all of their client
relationships like A-list clients. "
Several years ago, D'Aiutolo Malcolm adopted the " family
first " notion for its team members, and D'Aiutolo says it has
been important in keeping the group together. " We listened
to our team, and we realized that everybody is into the work
we do, but we also have to be respectful of what else in their
life is important to them, " he says. " We wanted to support the
idea that family should be the most important thing in our
lives: For some people, that means a spouse and kids, and, for
others, it may mean their dogs. "
Younger people, in general, are looking for more of a
work/life balance than is D'Aiutolo's generation, he says.
" They're willing to trade some upside compensation for that
work/life balance, " he says. " So I think teams are going to
change in the future. If you look at the way advisory teams
were built 20 or 30 years ago, you had a senior consultant
who did everything and made a lot of money doing it. In the
future, I think there will be three people who are each doing
parts of that job [and making somewhat less]. "
ProCourse Fiduciary Advisors, an MJ Insurance company,
also shares the value of family first, says Brea Dantin,
co-founder and adviser at the Carmel, Indiana-based practice.
" We want to communicate to our team, 'To us, you're
more than a body that can help us get our work done, " she
says. " We want to make sure our people can have appropriate
work/life boundaries. " Sometimes in this business, she says,
" There's a stance of, 'If you're not at your desk and working,
you're not producing at the level I think you should be.'
" We hire intelligent adults, and we treat them like intelresults,
with all employees,
including the most junior, Cullen says. Within its strategic
road map, SRP also has a one-year plan and a four-year plan
that it shares openly with everyone on staff.
" We want to design compensation that is consistent
ligent adults, " Dantin says. " I expect our team members to
meet deadlines, to be innovative and to give great service to
our clients. If it takes someone 40 hours a week to do that,
that's fine. If it takes someone else 39 hours a week, that's
also fine. We're not micro-managing their time. " -Judy Ward
20 | planadviser.com November-December 2022
http://www.planadviser.com
PLANADVISER - November/December 2022

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