The Branch of the Future

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Hello and welcome to The Way Forward. I'm Allison Rooney from Barron's, and today we are joined by our guest, Tosh Elwin, President and CEO of Raymond James Associates. Thanks for joining us today, Tosh.

Thanks, Allison. I'm really excited to be here with you today.

It's great to hear your voice. And Tosh, I want to hear your take on the past year and how Raymond James advisors are adapting to this new normal. But first, I know you have a great story that I really want our listeners to hear. Tell us about the Tosh Neighborhood Pizza Factory from this summer.

Oh boy, okay, I'll be happy to share that story. So I, I don't know, gosh, probably about a month, maybe 6, 7 weeks or so into the, the depths of the pandemic as we were all sequestered at home and getting quite restless, I woke up early one Saturday morning and did my normal Saturday morning routine of opening up the iPad, catching up on emails, news of the day, and so forth. And then having done all that, I had the epiphany that that day would be a fun day to fire up the wood-fired pizza oven in the backyard and bake some to-go pizzas and invite some friends at a social distance to pull up curbside and get some pizzas to go. And so I cleared it with my wife. She was supportive of it as well. And then as soon as the local Italian market opened at 9:00 AM Saturday morning, I was one of the first in line, started to grab all the ingredients I needed. And although I make my own sauce and cook my own toppings, I learned long ago that this Italian market that's been making dough since the 1940s is gonna do a far better job at that than I am. And so I made my way to the, to the cooler where they keep the pizza dough, and as luck would have it, they were just stocking it at that moment. I asked the clerk, "How many pizza doughs do you have?" He said, "Well, how many do you need?" I looked at what he had and I said, "I'll take them all." So he loaded up my shopping cart and I came back home and sat down and started to build a spreadsheet because that's what you do in business and typed in different types of orders that I could do, pepperoni, cheese, margherita, et cetera, and then set out to start texting friends and neighbors and letting them know that my family and I were going to bake pizzas that night, pick them up curbside. They could have up to 2 pizzas of their choosing, and we'd throw in a bottle of wine to boot, and all we asked in return was that they make a donation in whatever amount is meaningful to them to a local nonprofit here in Tampa Bay, the St. Petersburg Free Clinic, that's focused on providing free healthcare, food, and shelter to those in need, and clearly throughout this pandemic there's been a lot in all of our communities that are in need, and so no sooner had I started to send the texts out and the replies started to flood in, and by the time it was all said and done that evening, over the course of about 4 hours, I baked 44 pizzas for my friends. It was almost the death of me, I think, that night. I'm, I'm really thankful that that's all the dough they had in stock because my, my eyes are always bigger than both my, my appetite and probably my aptitude. And had they had 100, I probably would have bought 100 and wouldn't have made it through the evening. But it was, it was a lot of fun. It was a great way for my family to really rally around something in the community, a wonderful way for us to give back, and a great way to see our friends at a distance and To top it off, we succeeded in raising a lot of money for the nonprofit as well. And the story probably could have ended at that point, but what happened next the following morning as I was recovering from the stiffness of throwing 44 pizzas the night before was my wife Emily suggested that perhaps I should share what we had done and more importantly, how this had benefited the St. Pete Free Clinic on social media that day. And at first, I wasn't totally sold on that idea. It seemed to be a little self-promotional, but at the same time, my wife's pretty persistent and she's usually right, so I yielded. And I think later that Sunday, or maybe it was Monday morning, I posted it on both LinkedIn and Twitter. One of my daughter's friends who had ducked into the backyard to see me in action had even made a TikTok of it. Which I'm not sure I'd even heard of TikTok at that point in my life. That was smart of her. That's right. And we included that in the post as well. And what happened over the next 7 to maybe 10, 14 days was really remarkable in that this story went viral like nothing I'd ever been part of before. And by the time it was all said and done over the course of the next 2 weeks, it had seen probably close to a million views on LinkedIn, thousands and thousands of likes and comments and a lot of shares. And I think what it really proved to me was in the depths of this news cycle of all of the tragedy in the country and the world, how hungry, I guess pun intended, we all are and were then as well for some good news and for something positive in our lives, and so probably the most gratifying thing about all of this were the number of emails and texts that I got from people I knew and as well as people I had not yet met about how this had inspired them to random acts of kindness, both big and small, in their own communities around the country, and that was, that was really gratifying to see and again proved his usually more than not, that my wife's usually right.

Well, it's an amazing story, and I appreciate you sharing it with our listeners. I think there's a lot to learn and take away from that. I want to move back to business. Can you talk a little bit about what it's been like to lead in the current environment? And perhaps there are stories that translate from your experience in doing this pizza factory, but what adjustments have you had to make as a leader?

Well, I think most notably has been that, that as much as all of us in the, in the wealth management profession, both as financial advisors, branch associates, and firm leadership alike have always been focused on the importance of showing care and compassion and concern for our clients and the communities in which we live and work and our families. I think one of the biggest teachings for me throughout this crisis has been the importance not only of continuing to be focused on all of that, but also the importance critically so, of self-care, both physically and mentally. I really early on in this crisis embraced the notion that this was going to be much more likely to be the proverbial marathon, not a sprint, and that we needed to treat ourselves almost as if we're all professional athletes and take care of both body and mind because the better we can take care of ourselves, whether we're financial advisors or serving in any other capacity within this profession, the better we're going to be able to take care of those around us that we have the privilege of serving. I would add to that as well that before the pandemic, I think we all, while it's a very personal definition, we all had very different definitions of work-life balance than we have today, and I think we're now seeing the importance of work-life balance amplified to levels that it's never been before, and we've all learned so much over the past year about the importance of that in our own lives. Again, however we individually and respectively define balance, and the pandemic has certainly forced more balance into my life. For me, being someone that has lived much of the past 15+ years of my life trying to single-handedly support Delta and Marriott, this has led to a lot more family time and a lot more meals together, not just pizza nights, a lot less travel, and I think as a result of this, hopefully for all of us, we're all going to emerge from this with a number of great new habits that are here to stay.

Those are great habits I absolutely support them. And I think on the flip side of not traveling as much, one thing that advisors are struggling with is the inability to see their clients face to face right now. But we have heard that a lot of advisors are picking up new accounts despite that fact in this environment, which does prove that money is in motion. What would you say are some of the keys to organic growth right now? What are the best what are teams doing to grow?

Well, I think in the conversations that I've had with a number of our advisors throughout Raymond James, and for that matter, conversations I've had with advisors that work at a variety of other wealth management firms, one of, again, the many silver linings that has resulted, and not in any way being dismissive of the human impact of this strategy, but one of the silver linings has been both the frequency as well as the modes of communication that advisors are now leveraging to remain in even closer contact with their clients than ever before. Somewhat maybe counterintuitively, I've been hearing time and time again that client engagement is stronger now than it's ever been before. Early on, those were phone calls and Zooms and emails in either direction, advisor to client, client to advisor. Where we were focused on, obviously, what's most important, which is checking in and showing love and care on each other's well-being. Then as the pace of the pandemic continued to evolve, you've seen those communications remain every bit as frequent but are now more so focused on continuing to provide the advice that clients and prospective clients need to provide for their financial well-being. As you look at how advisors have been able to translate this into organic growth. And you look at what some of the best teams are doing right now to grow, I think there's a range of things that are showing great impact. So for example, one strategy would be advisors that are using surveys to clients based on this changing environment to really develop a better understanding of what your clients prefer in terms of how often Do they want to hear from you? And how do they want to hear from you? Whether it's Zoom or whatever other technology your respective firm may be using, whether it's one-to-one communication, one-to-many, webinars, etc. And then being sure to really input and document those preferences into your CRM tools to help your advisory teams create new workflows around this because I really believe that the more digitized advisors can become, certainly, the less you have to worry about whether you missed any of those touch base opportunities with your clients. Another avenue that many advisors are leveraging both to retain and deepen relationships with existing clients, but then as well, to your point, to acquire new clients to serve as well have been how well people have been translating what had been in-person physical events to now this virtual landscape. And I think that for many of us, this pandemic has given us a glimpse into what social isolation really looks like and feels like. And so, this is, I think, a particularly important strategy for advisors to leverage both with clients and prospective clients alike to help people feel more connected and to add value. And so, we've seen everything from events advisors are doing with clients where it's a virtual cheese and charcuterie board-making class or a wine tasting or a cooking class. And then at the other end of the gamut, obviously leveraging our firms and other firms' resources to make the intellectual capital of the firm available to clients again in a virtual webinar format as well. But I think that the real takeaway here is that it's important for us as advisors to adapt to what clients want and clients need during these times. And I think more than anything, what they need from us is they need not only our advice, but they need, they need our steady hand and they need our counsel.

Great points. And team management and strategic team development is critically important right now. How should advisors think about it and what are some of the best practices or key considerations that you can share for advisors thinking about growing their team?

So here I'll go back to the importance, as I said just a moment ago, about care, both care for others as well as self-care. And I think that the most successful teams during this pandemic are focused on exactly that. Demonstrating the genuine care and commitment they have to the well-being not only of their clients but as well to each and every one of their teammates and ensuring that we all take the steps that we need to take to stay healthy, both physically and mentally, to stay safe. So that has to be first and foremost, and then beyond that, I think the best teams are showing the importance of really constant consistent communication, constant and consistent communication with clients, but also constant and consistent communication across the entire team. And then lastly, it's focusing on the importance of controlling the controllables and recognizing and acknowledging that uncertainty breeds anxiety. And anxiety is obviously a significant stressor for, for so many of us, ourselves included, as financial professionals. Helping our team and helping our clients focus on controlling the controllables and accepting what we can't control, I think gives people a lot more certainty, and that certainty is going to lead to the antithesis of anxiety. It's going to lead to comfort, and I think every single one of us could use a pretty heaping spoon of comfort right now.

You've spoken a lot unintentionally so far, but leading into culture. How do you, at both the firm level and the team level, continue to perpetuate such a positive culture? I know in this heightened anxiety period, that can be difficult, and a lot of advisors are struggling to maintain culture with everyone at home. So what tips would you share?

So I'd begin by noting, and I think appropriately so, that culture is arguably one of the most overused terms in corporate America. And certainly within the financial services profession as well. But then I would extend that thought by affirming that culture is as overused as it is because of how critical it is to the success of each and every one of our firms and within our respective advisory teams as well. And when I reflect on the culture of Raymond James and what we believe makes our firm unique and distinctive, vis-à-vis many of our other great colleagues and peer firms in the profession as well. What has really struck me over the past year has been that while oftentimes we would certainly all think that there's no substitute for being able to break bread or shake hands with someone in person and to have that physical proximity and connectivity, in a really positive way with this pandemic and all of us leveraging new technologies, or at least newly used technologies, as effectively as we all have, is that ultimately, whether you're looking at the culture of Raymond James or the culture of any other great firm within the wealth management profession, culture is people. And what's really been impressed upon me is that the people can shine through no matter the mode of communication, and so as we look at how best to continue to perpetuate our culture in this virtual format, we've looked at using each and every opportunity that we would have gathered in person to pivot to a virtual format, and so a tangible example of that that I would share with you would be one of the hallmark events for Raymond James and Associates is our summer development conference that we host every July, most typically in the Orlando area. And this conference, by design, is a very inclusive event at Raymond James, inclusive not only of the financial advisor, but his or her significant other, children as well. I think back to the, to the last summer development conference we had, And the number of children, which I think bodes quite well for a new financial advisor training program, but the, the number of children outnumbered the number of financial advisors that we even had in attendance. And, and at our virtual summer development conference that we hosted this past summer, we brought everything to life via Zoom as much as possible as we would have done in person. And my favorite example of that was the family favorite, the traditional ice cream eating contest at Raymond James. This is taken so seriously by so many of my colleagues at the firm that I even know people that start training for the ice cream eating contest in the weeks in advance. I'm not exactly sure what ice cream eating contest training looks like, but they say they do it. We pivoted to virtual and we invited our advisors and their families to record their own family ice cream eating contest and submit the videos. And while we didn't get to declare an ultimate winner, to the chagrin of some, I think it is a great example of how all of us can get creative and we can pivot and we can perpetuate some of our firm's traditions in a great fashion. Two other great examples I would give of that would be our firm's annual Women's Symposium, which we hosted this year for the 26th time. But for the first time in 26 years in a virtual format. And again, the spark that results from giving people the opportunity to engage and to network and to support each other and to cheer each other on, that, that can transcend the distance, so long as we provide avenues, again, for people to shine, which is really at the essence of the culture. And then The last example that I would share of this was just this past Friday in support of the Diwali holiday. Our firm gathered together with our Mosaic Inclusion Network, and this is an event that, that this past year numbered probably some 500 people in person to both celebrate as well as learn more about Diwali, and we did so digitally. This past Friday, and the attendance was probably every bit as strong as it had been in person. And again, I think if we all get creative, we can continue to perpetuate many of the best traditions of our respective firms.

And that brings us to the really big question here. Will it matter if the teams of the future are virtual? Can team members stay at home, or do you think they'll migrate back to the offices and what will the team of the future look like?

Well, I'm a big believer that pendulums generally swing too far in either direction. And so while some have proclaimed as part of the aftermath of this pandemic the death of corporate real estate and traditional office space and so forth, and that we will permanently in this country be a remote or mobile workforce. I do think that while there's some degree of truth to that, that pendulums tend to swing too far in either direction. That said, I am quite optimistic and excited about the prospects of what new habits will be here to stay with some semblance of permanence, and as an example of that, and we were already well into the midst of this work even prior to the pandemic, but the pandemic has only served in a, in a confirming way for us to accelerate this work, our progress on what we refer to as the branch of the future, in which we've been envisioning and getting considerable and valued feedback from our financial advisors and our branch associates about how they envision engaging and interacting with the traditional office environment, or better said, the branch of the future, and we will be building on that model in a way that's going to be, I believe, more adaptive and more responsive to how both professionals as well as their clients are going to interact with the physical space. And I think it's really exciting, and I do think that this pendulum is going to result in a happy medium where we're going to see some continue to work virtually, and then some, I think the more appropriate term is building to support a mobile workforce, which will be both in the office and remote at various times. But I think what's, what's clear is that we're all learning a lot about preferences. We're learning about how people prefer to work, and we're really thinking about mobility in the future.

That's great advice, Tosh, and I'll be curious to see what you you get for feedback from your advisors on, on when they want to return to the office. But switching gears, recent news has emphasized our industry's need for more diversity. Can you tell us what your thoughts are on the current environment and what advisors should be doing to help champion diversity on their teams, with their clients, and in their communities?

Well, it goes without saying that there's a lot of work that still needs to be done when it comes to increasing diversity within a variety of industries across the country and financial services included. At Raymond James, we have a number of initiatives that aim to demonstrate that financial services is a viable option as people plan for their career future, like our campus recruiting efforts, our advisor training programs, which which these programs themselves involve very concentrated efforts on increasing diversity. And this year, we affirmed our continued commitment to the Black community and, for example, launched coaching programs within Raymond James for our Black advisors and associates. And then taking that a step further, I would note that on a personal level, I've seen a lot of success coming from mentorship programs. And I've been involved in the University of South Florida's Corporate Mentorship Program for the past 10+ years. This is a program that began with a focus on serving and supporting diverse first-generation college students. And then over time, as they've had great success in, in attracting additional mentors, they've been able to broaden that program in support of even more students within the, the business school at the University of South Florida. But I'm a huge believer in the importance of giving back through mentorship, and I really do believe that each and every one of us has both an opportunity, and I would take it a step further and say a responsibility, to change the world. One person at a time. And I think that can be accomplished to a large extent through investing in, in mentorship programs like this.

Now, do you have other thoughts on how the business is likely to change in the next 5 to 10 years? I think diversity is a huge point of that, but what else do you think is going to be a seismic shift in our industry?

Well, I would begin with the belief that I hold that the industry today stands at a proverbial fork in the road where many in the industry recognize that one of the single biggest expenses in operating a wealth management firm is the associated cost of compensating financial advisors. In recognizing that, Many firms are choosing the fork in the road in which they are intent in leveraging technology and other tools and resources in a way that they can disrupt and disintermediate that single biggest expense. Whereas Raymond James is choosing the other fork in the road in which we recognize and believe that there will be a persistent need for advice, but further, we very much believe and celebrate that there's going to be a persistent value placed on human advice. And with that in mind, Raymond James is doubling down and reaffirming the advisor's very critical role as the center point of contact for their clients. And so while technology will undoubtedly continue to become a bigger part of our business. I really think how we approach this and how we continue to invest in technology and innovation in a way that supports the advisor as the center of that client universe and that client relationship rather than as, as many others are focused on disenfranchising them I think that's really going to shape how the industry evolves, the profession in the next 5 to 10 years. I personally, as does Raymond James, very much believes in this value of human advice and the significant role that an advisor plays in helping clients. It's what's led me to develop the great appreciation and pride I have in this noble profession. Where I firmly believe that arguably second only to what a physician may do to positively impact his or her patient's physical well-being, or if someone is of faith, what their pastor, their rabbi, their minister may do to positively impact someone's spiritual well-being, I firmly believe that what we do in this profession as financial advisors to positively impact our clients' financial well-being that it ranks right up there in terms of societal importance. And everything we do as a firm is well aligned in reaffirming that value that human advisors provide.

Thanks, Tosh. You've given us a lot to think about today and a lot of great ideas. But in typical Barron's fashion, before we go, I want to ask you for one final actionable idea that our audience can take away this week.

Well, I appreciate that question, and in fact, as we've been chatting today, Allison, about the importance of perpetuating our cultures, this call to action is absolutely one of my favorite traditions in this profession, and I give great kudos to Barron's for originating and preserving that. In terms of a final actionable idea that I would share with you all, It would be to remind us that every single one of us has such diverse talents and passions that can benefit others in need, and if there's ever been a time that you wanted to try something outside of your day job, i.e., opening a backyard pop-up pizzeria to fund the local nonprofit, there's no time like the present to take action and to think about how you can use your unique talents both within and outside of our profession to help others and to make a difference.

Thank you, Tosh, for your insights today. They've been invaluable. And thank you to our listeners for tuning in. We will be back next week with another newsletter and episode of The Way Forward.

This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions. With wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.