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INSITE 2018 Intro...  by David. F. Smith, Ph.D., CFP®

At the BNY Mellon Pershing INSITE 2018 conference in June, client firms had the chance to learn from experts and practice peers on subjects ranging from alternative investments to traits of leaders. The conference lived up to its billing as a “Premier Financial Conference for Success-Minded Advisors”. The meeting in Orlando had keynote speakers James Comey, Jay Leno, and Michio Kaku. While it's easy to guess what Jay Leno provided the audience (lots of laughs), and maybe what Comey discussed (American values are taking a beating), Kaku surprised the audience by future-telling what the next great wealth creator will be (Artificial Intelligence). The breakout sessions allowed participants to have direct access to current solutions around many topics. I attended as “Press” which was very nice of Pershing as it provided me time to discuss ideas with key executives at the conference. Since my interest is primarily in practice management and leadership issues these days, I did not attend breakouts in some great investment topics (see: ). The following is a collection of my posts during the event (slightly edited for brevity and clarity).

What: BNY Mellon INSITE 2018 Observations from an Attendee

Post #1: Staffing (InvestmentNews)

June 6. The meeting began with 6 a.m. Spin Class or you could do Yoga. I understand they were fun, but I missed them in favor of sleep. Instead my first session was on Staffing and Compensation based on the research conducted in partnership with InvestmentNews. The 2017 InvestmentNews Adviser & Staffing Study (key findings: ) provides plenty of data to consider productivity and the cost of productivity. The report provides extensive current and longitudinal information for advisory firms. The study covers 30 distinct positions in advisory firms; these can overlap or even be combined depending on the size of the firm.

At the INSITE 2018 conference put on by BNY Mellon Pershing, Mark Bruno and Matthew Sirinides did a great job of connecting the real world of advisory firms with the research for twenty years. Since 70% of the costs to a firm are staffing, attracting and retaining the right people is a large part of the productivity equations that result in profits. Mark said the main question a practice leader should ask is, "Am I incentivizing our people in the right way?" This is a great question and cash comp is one part of the answer. Mark mentioned one recurring comment from advisers regarding staff retention was the need to have “increases in salary and better incentives just to stay… I don’t want to just through money at the situation.” 53% of hiring is to current positions – a significant turnover challenge. Leaders need to keep in mind that as Dan Pink wrote about in Drive cash isn't the only motivator. Intrinsic motivation can be just as big a reason someone comes to work for you and the reasons they stay or leave. One such intrinsic motivator is whether the employee believes they are getting the training they need to succeed and grow in the firms, but as Mark pointed out, "Most firms do not have a formal training program." Matt noted, “There is a huge talent war going on…” which makes it very important that firms get their culture right as well as the table-stakes of cash compensation. Bringing on and keeping the right talent at the planner level below lead advisor is needed, per Mark, “to free up the lead advisor. The person with the most ability to grow the firm has the least amount of time to do so.” Most firms are at over-capacity levels now with only 11% having underutilized capacity according the report.

One area of concern to younger employees is having a career path. Larger ensemble firms, the ones showing the best productivity growth, have clear career paths, specific job descriptions, and development programs. While there may not be formal training, the work environment is conducive to adding experience and ability the allows for promotion. For example, some firms are not only suggesting the CFP® curriculum to more junior employees, but also paying for it. In these firms 40% of staff had that designation just a few years ago, but it is now 60% and not just lead advisors.

This is a Pershing conference, and Barb Novak, a vice president at Pershing, summarized the case for paying attention to staffing noting the earlier slide that while 5# of hires are into current positions, 33% are newly created. This type of growth requires formalization of career paths, development and training programs, and consideration of the intrinsic reward system and leadership styles. At a later one-on-one meeting, Gabe Garcia, Managing Director of Advisor Solutions at Pershing, emphasized that Pershing is committed to helping client firms to understand the business needs driving staffing issues. His group of relationship managers are there to help the businesses make better decisions including how to become the “employer of choice in their community.” Pershing provides toolkits designed to help in fourteen strategic areas of business management, most of which affect staffing and compensation decisions in some way. More on Gabe’s service deliverables to Pershing clients later. As Barbara put it, Pershing helps “create a paradigm shift… leading to new discussions on roles, responsibilities, and team structures.”

In one hour, then, a whole host of issues were surfaced and discussed using useful research data. This research is available through InvestmentNews and Pershing and if you are a Pershing client, help is available for the asking. The INSITE 2018 did indeed provide insights, but went much further than just discussion, the session showed that you are probably not the only one with questions and that maybe the answers are waiting to be customized by you to fit your business.

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