Advisory Firms Share Their Hiring Strategies

By Cyril Tuohy InsuranceNewsNet

By Cyril Tuohy

In any advisory firm's expense column, labor is often the most costly line item, as it needs advisors and producers to bring in clients so the company can grow.

So how do companies recruit and develop advisory talent who best fit their culture?

Six registered investment advisors (RIAs) share their secrets in “Be Greater: Why Being Good Enough is No Longer an Option,” recently published by Fidelity Investments.

At BakerAvenue Asset Management, an RIA in San Francisco with 22 employees and about $1.1 billion in assets under management, it’s all about “the fit.”

Chief operating officer Jerry Luff said the company looks for new hires to fit in with a tight-knit group of about 20 people. “We can’t afford to have someone come in and alter that and make the environment challenging,” Luff said.

Many of the RIA’s hires have come through referrals, eliminating the need to rely on head hunters or recruiters.

Testing out the personality of a prospective hire through an off-site meeting in Sonoma, Calif., for example, offers the candidate and the management team an opportunity to see how BakerAvenue leadership works, and if the fit is right.

“You can learn so much more in this type of situation than in a traditional in-office interview — and it shows we aren’t traditional, which is part of our key message to the market,” Luff said.

To the south, in Long Beach, Calif., at Halbert Hargrove Global Advisors, chairman and CEO Russ Hill said the company relies heavily on interns, “which provides a good opportunity to evaluate their skill set and personality before making a hiring decision.”

One internship recruitment notice typically generates about 50 applications, Hill said.

Ideally, interns will work at Halbert Hargrove year-round even if for just a few hours a week. Interns are given “real work,” which may extend to financial planning, contributing to service teams or mining software analytics, he said.

“When we are ready to fill a full-time position, we use an outside firm to do background checks, plus the tools that another firm provides to help assess personality, attitudes and values,” Hill said.

Candidates then proceed through a “rigorous interview process,” that includes facing as many as five people at once.

“Not everybody makes it through the interview process — even some of the interns we thought were really good,” he said. “It comes down to work ethic.”

Hill compared working at Halbert Hargrove, which has $4 billion under management, with being on a sports team where “each person is a coach, leader and team member simultaneously.”

On the other side of the country, at Rockwood Wealth Management in New Hope, Pa., a small advisory with eight employees and $260 million in assets under management, President John Augenblick prefers to hire people just out of school -- young graduates untainted by the traditions and the burdens of other firms.

Augenblick said he recruits from universities and financial planning programs. Young candidates with big public account-firm experience are also held in esteem as they are trained to carry a heavy workload, he said.

With Gen Y employees, though, it’s important to lay out career trajectories and expectations, Augenblick said. At his company, young hires are introduced to client meetings early on. “This is very important for millennials who want everything to happen faster than is often practicable,” he said.

In four years, an employee can become a financial advisor at Rockwood, so long as he or she has passed the Certified Financial Planner exam. Employees are eligible for equity in the company after nine years on the job.

“We discuss student debt levels as part of all this, the salary they can expect at each stage, and how that might help them handle the liability moving forward,” Augenblick said.

At The Colony Group in Boston, with 68 employees and $3.5 billion under management, the RIA puts a premium on diversity, said CEO, President and Chairman Michael Nathanson. “You need to hire the right people, and also the right mix of people,” he said.

Women are creating and managing a greater share of the wealth, and women represent more than one-third of Colony Group’s staff, he said.

Although it’s unfair to say that women prefer working with female advisors, “we can assume that at least some women like to work with a person who might be more sensitive to gender-specific issues,” Nathanson said.

Some women clients are bound to take the company more seriously if they are served by women advisors. Advisors looking to hire women will be taken more seriously by prospective candidates if women staff the company at all levels, he said.

“Beyond gender, we think that having a diverse staff in terms of age enriches the firm by providing different points of view and ways of looking at the world,” Nathanson said. “It also makes us more attractive to the next generation.”

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].

Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].