The North American wealth management sector has a talent management problem. How can this be fixed?

The financial advisory industry’s talent shortage is more acute now than ever. 

Demand for high quality advisors and executives outstrips supply. Three-quarters of advisory firms are hiring new employees, and nearly 40 per cent are recruiting employees from other registered investment advisors, according to the latest RIA Benchmarking Study from Charles Schwab. 

There are, however, alternatives to poaching from rivals. Some firms have launched programs to develop and nurture talent internally. Others are looking outside the industry altogether. 

“To compete on talent, firms are seeking to find the best talent outside the industry to bring fresh ideas to the innovation playing field,” said industry consultant Angie Herbers, CEO of Herbers & Co. “That talent includes marketing, sales, operations, and tech talent from other progressive professional services industries.”

What’s more, RIAs aren’t just dusting off old job descriptions when they have an opening, according to Lisa Salvi, vice president of business consulting and education for Schwab Advisor Services. Instead, they are “stepping back and asking what skill sets they will need to serve the ideal client they want.” 

In the past seven months, one fast-growing wealth management firm in Texas, Dallas-based true North Advisors has filled not one, but two key executive positions with exactly that calculus in mind.

Transferable skills
“We are looking for the best talent with a specialized skill set that we can plug into the organization,” said True North CEO Scott Wood. “We believe those skills [from other industries] are very transferable.”

Accordingly, True North, which currently has approximately $2.5 billion in assets under management and wants to more than double that within five to six years, hired Holly Wilkins as its new marketing manager in January and Jay McCauley as its vice president of strategic relationships in April.

Before joining True North, Wilkins was Midwest regional marketing manager for Greystar Real Estate Partners. “She understood the affluent market and was able to balance big picture execution with tactile execution,” Wood said.

McCauley managed capital campaigns for Presbyterian Health Care Foundation in Dallas and, after a merger with another hospital, was named president of Texas Health Resources Foundation. Previously he was director of development for a private school in an affluent Dallas neighborhood, St Mark’s School of Texas. 

McCauley and Wood were both members of the Salesmanship Club in Dallas, as well as friends, and Wood saw how many affluent people in Dallas McCauley knew from his previous jobs and how effective he was at building relationships. 
 

“Jay has a unique ability to connect with people,” Wood said. “He’s very credible and people trust him. We needed a deep expert in relationships and his skill set translated perfectly.”

Challenges and priorities
Familiarizing herself with the industry’s compliance rules and SEC requirements have been her biggest challenge to date, Wilkins said. Otherwise, she’s been able to easily apply skills from her previous job, such as digital expertise and working with data and strategic intelligence, to her new position.

Reviewing and contacting his expansive list of Dallas contacts and setting up informational meetings have been McCauley’s top priorities. His approach is similar to his previous job, he said. 

“Everyone has a need for what we do,” McCauley said. “My job is to find what’s the best fit for the family and their personal goals and let them see how we can help them. If I’m representing the best restaurant in town, I just have to get them to eat there.”

Marketing priorities over the next 18 months will include improving True North’s digital marketing, website development and social media presence, Wilkins said. She also plans to capitalize on previous website visitors, step up the firm’s paid search capabilities using search engine optimization and inaugurate a series of podcasts to boost True North’s messaging.

Benefits and drawbacks
According to Herbers, the major drawback of hiring from outside the financial services business is “navigating the learning gap of a regulated industry and the need for training programs to accelerate their knowledge in compliance.”

But the benefits are considerable, she added.

“The major benefit is technology innovation,” Herbers said. “The perspectives and ideas coming from outside talent are expanding target markets and giving RIAs the ability to serve clients of all sizes profitably and with operational efficiency. Many of the fastest, most innovative firms we see are the ones that went outside the industry and brought in talent who had previous experience in creating operational excellence in another field.”