Advisors are in the service industry. Establishing, developing, and nurturing in-depth personal relationships with clients is now the hallmark of a wealth management firm’s value offering. Today’s advisors must position themselves at the intersection of their client’s personal and financial life and help them make the best of both. However, as the industry moves forward, advisory firm owners are now staring down the "Great Resignation" and finding that attracting and retaining the best and brightest has emerged as a top management issue.
According to a recent survey by Schwab and TD Ameritrade, over 37% of advisors say finding talent is a top issue as the wind behind their backs from the growing demand for fiduciary advice is fueling their growth. Advisory firms are looking to add new operational and advisor staff to continue supporting their hi-touch service models and its’ been a challenge.
As a result, advisory firms are looking beyond the traditional sources of talent in wealth management to find new candidates outside of the industry. According to the survey, among the top five attributes sought are "work ethic, attention to detail, team player mentality, ability to communicate with clients in person and commitment to the firm."
So, while the talent issue will continue to be a challenge, what can advisors do to become more efficient, productive, and bring scale to grow their firms without relying on new staff? Industry blogger and advisor guru Michael Kitces' recent research suggests the more firms specialize in a niche area of clients and service offering, the more scalable they become.
“When advisors get more focused into a particular niche or specialization, enabling them to develop more ‘repeatable expertise,’ they spend 13% less time doing middle-and back-office support work, can support 14% more clients and earn 67% more vs. those that don’t. Similarly, specialized advisors are able to complete financial plans in nearly 22% less time.”
Other approaches to leveraging staff rely on the latest emerging technologies to streamline operations and the back-office to get the most from existing human resources. And, as workflows in wealth management operations are typically repetitive, data-based, and labor-intensive, the back-office is a great candidate for Artificial Intelligence as well as Robotic Process Automation (RPA), Machine Learning (ML), and Natural Language Processing (NPL) to drive workflow automation. As an example, according to CapGemini, RPA in the back office can reduce 70% of the cost of a full-time employee, providing a quick and tangible ROI to advisory firms.
Additionally, many industry studies have shown that advisors spend more than 40% of their time on operational, compliance, and administrative tasks, reducing their capacity and ability to grow without adding people. The good news is that firms that have adopted the latest technologies have significantly reduced that time spent. For example, SS&C's Black Diamond® Wealth Platform has numerous features and benefits that deliver both time and cost savings. In addition to leveraging RPA for workflow automation, the platform also includes an ecosystem of deep integrations, such as CRM, financial planning, risk profiling, rebalancing, trading, and more. As a result, this comprehensive wealth management platform can streamline workflows and simplify operations while delivering a superior client experience.
So, while the looming talent shortage does not look like it will be ending anytime soon, advisors today have many strategies, tools, and approaches they can look to optimize their valuable human resources.