The Three W's

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Hi everyone, I'm Sterling Shea with Barron's and welcome back for another episode of The Way Forward. Our guest this week is an industry-leading coach and consultant, Fran Skinner of AUM Partners. Fran is definitely a friend of Barron's and has been a highly celebrated speaker at a number of our events over the course of the year. She's a CFA and a CPA, and I know she's going to have a lot of wisdom to share on how advisors should be thinking about their business in this, this very interesting time that we're in. Fran, hey, thanks so much for joining us.

Well, thanks for inviting me, Sterling.

Fran, you've been writing and speaking a lot about practical ways advisors and managers can improve diversity on their teams. Such an important issue right now. We believe adamantly that the teams that are going to dominate this business in the future are going to have diversity, diversity of age, diversity of gender, racial diversity. And those are the teams that clients are going to identify with. Can, can you start by just giving us some of the ideas that you've been sharing with them around this thought and what's the background on them?

Sure. So the background goes back 25 years to my own time when I was struggling to be a you know, do it all, stay at home, a mom, you know, small children, working full-time, a commute, etc. And going to my boss with a slide presentation entitled "The Best Deal You're Going to Get This Year." So this is 1995, and I made a case that I should work an alternative work schedule, which back in 1995 you either weren't allowed to do or it was the kiss of death. For your career. And I was lucky that I was working for a wonderful woman at the time, and she said, okay, we'll give it 6 months and try it. And quite frankly, Sterling, that's the only thing that kept me there at that time. I couldn't keep going at the pace I was going without some flexibility. And so that kept me in, and other people started coming to me sort of like— and it was like this big secret You know, I hear you're, you're working a different schedule. Can you tell me how you made it happen? And so then I started coaching people in terms of how to position it and, you know, what did you need. So that is the source of my passion, because I know I, as a woman, that that was so important to me. And with that flexibility, I was able to go on and not only work, but get my CFA studying at night, get my MBA going to class at night. It was a game changer for me. So that's part of, and that's been a big part of what I've, when as a consultant, coached people how important flexibility is and meeting people where they need to be met to keep these high performers in the game.

Well, all the more relevant in the situation we find ourselves in, in the virtual engagement era brought on by COVID. That you, that you have an open mind to that sort of thing. How do you think that meshes with the way advisors and advisory teams are operating right now?

Yeah, so I think that if you have to look at any bright spots coming out of 2020, one of them is the openness that has had to occur. So people that have been clients of mine long-term that have always had some negative feelings about maybe flexible work schedules, work from home, things like that, that they got to see firsthand because it was thrust upon them that it can and does work. It's not 100%. It's not every job, you know, was seamless, but they were very surprised in what they saw. So it has been an eye-opener for people and in varying degrees, somewhere in the future, in the new normal world, I believe a lot of this sticks based on talking with them saying, wow, I've been very surprised by how some of this has worked.

Well, it hinges on accountability. As a leader, how would you suggest that advisors and those who are leading teams in the business think about inspiring and judging accountability of people in the virtual and flexible work arrangement?

So, that goes into one of the modules we do is called the Accountability Module. And that really just boils down to the following: who's going to do what by when? The 3 W's. Who will do what by when? And it's all about having clear agreements that when you're discussing anything with any member of your staff, peers, whatever that might be, if you want to have a culture of accountability on your team, it's about who is going to do what. And most people get the who and what. What they frequently fall down on is the win. So we might have a very clear agreement, Fran is going to do X, but more times than not, we don't settle up on the win. And I, as the requester, may have thought you understood, I meant by tomorrow. You, as the receiver of that information, were thinking, well, I have these other 3 things ahead of it, I'll get to it then. So, if you want to talk about what really ramped up in this environment this year, what's become so much more important, it is that accountability piece, that who will do what by when, that clear agreements portion to make sure that there weren't disappointments, that things went more smoothly. So I do believe the people who understand that, that without really thinking about it, they've ramped up accountability on their team this year. And those people who sort of, you know, have hit rocky points along the way, more times than not, it can be traced back to this lack of clear agreements.

Yeah, and from what I'm hearing from you, it starts with clear communication. So, it can't just be an unsaid expectation. It's really gotta be spelled out in detail and concisely.

And I can't emphasize that enough, the expectations, you know, and when I'm doing live training, I usually put the word assume up on the board. And if you've ever seen the old joke, you know, in terms of assume is one of the worst words you can use in business, that it usually leads to disappointment. So, that's the big thing is anyone who— I always coach people, anyone who's thinking or saying the word assume, you're setting yourself up for disappointment. Wow.

Now, I know you've also used a phrase when you talk about this and other related subjects about advisors learning to grow their own. What does that concept mean to you and why is it relevant?

So this is everything. I get so many requests from people when I'm at conferences or people reaching out to me that they want, they want diversity on their team. It's exactly what you said. These are going to be the winners long term in the advisory business, people who have diversity of all types on their team. And people reach out and of course, you know, I have nothing to give them because the people I know work for my other clients. So, you know, I have nothing to give them and I frequently coach them and say, you know what, as an industry, all that does— people stealing from each other— all that does is move the deck chairs around. It doesn't get more people into the industry. So what I frequently share with them, I'll coach with them, I'll support them every way I can, is this grow your own, because it's the only thing I've seen work. And what that means is this, is that You as an advisor commit to entry-level young people coming into this industry, a broad swath of that, that brings diversity to your team. And how you do that is a couple of different ways. One, and this goes into the recent Barron's articles that I've had, is you develop relationships with the smaller and lesser-known schools. That, and you, and you create this relationship that you go in and offer internships and/or, you know, opportunities to diverse talent at the top of their class that may not be in the top 5 or 10 schools in the country. Everyone sort of sticks all to those same— I call them everyone swimming and fishing in the same ponds— that to get diversity, you go looking in other places. So that's a big one in terms of bringing people in and bringing the diversity in and committing to developing them.

Well, let's talk a little bit about that development. Say that you're lucky enough to do something like that and find someone really unique and diverse that you think can add exceptional value to the team, but they need a nontraditional workday, flex hours, remote work. How do you coach advisors on implementing that kind of structure, particularly with new employees?

So first of all, it's not a one-size-fits-all. So you may already have some of this in a normal world, but you may already have some flexibility. Maybe you have some things going on, but it's not a one-size-fits-all. It's about understanding what do you need. So some people may need to attract them you may need to offer them 5 short days. You might need to offer them 4 long days. In the case of Jenny Hubbard, who I wrote the article about in terms of remote work, it might be that you work remotely and you're only on site a few days. It's about understanding how do we balance how we serve the client, the needs of the business, with Meeting someone where they need to be met in terms of an alternative work schedule. And one of the things I like to share with people is something I learned from improv training at Second City in Chicago. A number of years ago, I took improv immersion training because I wanted to get better at the Q&A sessions when I was doing live presentations. And there was this wonderful epiphany that came out of it. And it is the power of the word "and," A-N-D, "and." And to keep the action moving, to have a more positive outcome, it's about paying attention to when you're using the word "but" or "or," those things that could potentially stop the action. So as you're talking about bringing people in and what works for them, it's about constantly saying "and." So you need this and I need this, and how do we make that happen?

So those little connectors make a big difference in being really clear with someone's expectations.

Absolutely. And breakthrough ideas. That's what I've seen since I sort of had this epiphany. And as a coach and as a consultant, when you introduce that concept to people, it can create, I jokingly say, magic. Because people aren't locked into just, you know, what my vision of my alternative work schedule was going to be versus your vision. It's how do we make both and come together and still satisfy all of the needs of the business?

Well, let's go back a little bit too. I mean, you're giving us some ideas here for successfully building accountability into the team in the virtual environment. You're giving us some ideas on kind of unconventional sources to find diverse talent. An advisor also has to make a leap of faith before hiring someone on that individual's ability. Yeah, they're going to assess kind of the cultural fit. They're going to assess the general aptitude, but yet there's an unproven component to the talent. And you have to, as an advisor, evaluate that because it's a big investment. In hiring someone, what are some ways that you would advise those out there who are seeking to make some of these hires to evaluate unproven talent and stack the odds in their favor of success?

Yeah, and that's such an important question because as I've shared this with people, they do, they pull back because they're like, oh my gosh, you know, it's such an investment. And your phrase is spot on in terms of taking a leap of faith. So how we support people in this is a couple of things. One, we teach them how to interview to get at their past experiences. BDI interviewing, get at their past experience, whatever the source of that experience, because what you can expect in the future is basically a function of what these people have done in the past, that it's not about getting their opinion or, hey, what would you do under a certain situation? So it's about understanding how to interview to better understand what have they been doing in the past. And when I say that, even new graduates or early people earlier in their career, they have a wealth of information that they can share. And you don't want to take any shortcuts just because they're early in their career. So for new grads or very early in their career people, you go after experiences, group projects in college, which are always a challenge, part-time jobs, jobs, volunteer work, internships. So number one is interviewing and trying to get a feel for, do I have a potential superstar here? That should not be a light version of your regular interview process. Secondly is how important assessment tools, psychometric testing tools are. And there's many of them out there. You know, the one we use, it's called the Harrison Work Preference Assessment. We've used it for 10 years and we've used it with a lot of— with our relationship with Barron's, a lot of Barron's top advisors. And we also, you know, source advisors and others who we don't meet through our Barron's relationship. So we have 10 years of data using this assessment tool where we're able to look at what are the attributes that are common among the people we see on, you know, Barron's top list, and then others who are good advisors, they're just not Barron's top advisors. So some of the things we see differentiate the Barron's top advisors are the attributes of taking initiative, wanting challenge, being naturally helpful people, and probably the number one in terms of business development success is the attribute of influencing. So you're using these assessment tools to see, is that DNA present? Because you can't make someone love influencing people or love helping people. That's just not trainable. So you're looking for that DNA. The things you can train, right, are the eligibility portion of giving them experience, training, shadowing you, etc., but you can't make them learn to love something. So those would be the two big things that would help advisors get more comfortable about taking that leap of faith is a, a better way to interview and get behind, you know, what they actually have done in the past, meaning what you might be able to expect in the future. And then some sort of reliable testing tool that is aligned with the high attribute, the Common attributes of top-performing advisors.

Fran, you're giving us a lot to chew on here. Let me dig into a little bit of that in more detail. You say don't give a light version of your regular interview to, you know, talent that might be younger. What are some practical dos and don'ts from the Fran Skinner playbook on approaching interviews, being a good interviewer?

So being a good interviewer. So first of all is beware of the biases, the halos and the horns that you have, like being aware of those. And so, for instance, the 3 that I have seen that tend to trip people up, either that they do this light version because someone had something that the person had a halo around, or they dismiss possible candidates because of the horn. And so let me tell you the source of those 3 biggest biases, and the first is the school someone attended. The second is a previous employer or where someone did an internship, in particular for younger people. And then the third is the source of the referral. So if someone has, you know, a halo around, you know, Bob, who gave us a good referral in the past, then already someone coming in may have this halo around them and you don't dig as deeply as you should. Same thing with the school someone went to. Just because they went to a magnificent school and got great grades, how many times I've seen that backfire that someone will come and they're like, "But I don't understand why they didn't work out. They looked good on paper." So this interviewing, that first of all, raising the awareness of these biases you may have, the horns or the halos, and that the interview questions focus on past behavior. So let me give you a perfect example of that is I like to ask questions that have the person talk about something that didn't go well. I want to see how candid they are about it, and I want to see what lesson they learned that they applied in the future. So it'd be something like, tell me about a project or something you worked on in the last year where the outcome did not turn out the way you'd hoped it would. And you get to see, first of all, hopefully, they've got a good answer for you that they're not, "Gee, it's been a banner year. I really can't say anything didn't pan out the way I expected it to." So, red flag. And then, when they start telling you, then you get to do what I call drill-down questions. You start asking them things, "What was your role?" What tripped you up along the way? And what you're listening for is accountability. Well, I should have done XYZ differently. Or is it blame? And again, the blame, red flag. You want to talk about having someone coming in who's an accountable person. If you're asking for a story like this and you're hearing blame, another red flag. So, that's what I'm talking about when I talk about getting better at interviewing to better understand What am I getting? Who am I going to invest all this time in?

I think those are great suggestions, and this is so important for advisors to understand, wealth management firms as well. I would venture to guess that most people who are hired that don't work out, it's as often a lack of cultural fit as it is, you know, a mistake in judging someone's ability or aptitude. What are ways that advisors can assess that kind of cultural fit? Most do it just by gut and feel and interaction? Are there some other ways they should think about that?

Yeah, so it's exactly what I just mentioned. You keep using these tools not just for can someone do the job, but is there a fit here? And when I talk about fit, some people, they take away a negative connotation when we talk about that. And I want to be very clear when I'm talking about cultural fit. Here's what I'm talking about. That when you're asking these BDI questions or when you're creating this assessment, you know, what fits here in my organization to be a top-performing advisor? Here's what we're talking about. We're talking about cultural elements along the lines of this: I want to help others achieve their goals. Versus some firms, you know, they create incentive structures that say, I can make a lot of money here if I bring in a lot of assets. Neither one is bad. You just need to make sure that you're bringing in someone who aligns with one of those two. If one of those two is yours, because I mean, as you can see, the mismatch, it would be you bring in someone who wants to be helpful for someone into a firm where, you know, our one of our values is you're going to be a top, you know, top compensation, top rewarder if you bring in assets, you can see that mismatch just isn't going to, just isn't going to pan out. Another one would be autonomy. You know, in terms of a cultural fit, one organization, the advisor or the manager may be very hands-off. They, they want to get you trained and they want to see you flourish. They want to see you. And this has been a big one during the pandemic in terms of autonomy, people working from home. Getting that and are they flourishing? We've had some really neat stories I've gotten from my clients in terms of the autonomy that's been given to people because they're working from home and how these superstars have developed. So autonomy might be another one if that's going to stick around post-pandemic, if that's part of the values of the organization, the culture of the organization, that you will get the latitude you need to become a master at what you're doing, have decision-making rights, et cetera. So those are the types of things when I talk about cultural fit, it's things like that. Is this a culture of appreciation where we're all constantly appreciating one another? It's not about having set events to say thank you. It's about that's a culture of appreciation. So that's what we're talking about in terms of culture. Cultural fit.

There's also, I think, a hesitation, a lot of advisors on a couple of fronts about hiring new people. First, how do I go about sourcing the talent? Secondly, how do I create realistic assessments? How do I judge accountability, cultural fit, to your point? But then there's also a hesitation. I think sometimes advisors feel that, hey, here I found all this, this person that I think can help me strategically with my business, let's mentor them, put my heart into it, do all the right things. But am I just in the long run setting myself up to lose someone as they turn out to be a great advisor who's capable of doing it entirely on their own? Do you have thoughts on that?

Oh, I do, because that's probably the second biggest thing. You know, the first being the time and effort I'm going to put into someone. And the second biggest roadblock people have is what if I do this grow your own and I create a superstar, particularly a diverse superstar, Am I, am I just setting myself up for pain? And the answer I always give people comes from my love of poker. As you know, in normal times, I love as a hobby to play live tournament poker. And there's only one guarantee in poker, and that's you will lose every single hand that you do not play. And so in terms of, that's the same thing here is to differentiate and diversify your firm. If, if you're not willing to make that investment, that there's no way that you can have any payoff on the other side of that. So there's always a risk. And so what I encourage people is that it's about having a retention strategy and great communication. So what's the long-term plan if you're going to have this person come in? What's the long-term plan? And it's not only about compensation. So, most people think that, that, well, it's about how much money can they make? At what point do I start sharing the profits? Maybe they get some ownership. That's all important. But I always encourage people to look at that more as hygiene. Because whatever you set up along those lines, someone else can replicate and still steal them away. So, it's about your plan, your retention plan, including thoughtfulness when it comes to what I've— you know, many people have heard me talk about your total rewards moat. So, what are you setting up that others can't duplicate? And that might be the culture, that might be giving people responsibilities. It's a lot of other things that go beyond just money. So, and how do you know what that is? You ask them, what's important to you? What's important to you to be a part of here and feel like this is where you want to be long-term.

Fran, so much good advice about hiring, about thinking about sourcing talent. We've got a couple minutes left. I have a couple quick questions. Are new graduates the only source of this grow-your-own strategy? No.

And this is like my double top secret that I share with people, and I'll share with you, is how many times I have found working with advisors, excellent advisors, that they were career changers, are career changers coming out of some sort of background in education. So keeping your ears and eyes open for someone along those lines. And when I say education, it's been all over the board. It might be elementary ed, high school, college, or even corporate education, that it's this desire and this ability, again, going back to this DNA, to patiently and thoughtfully want to impart knowledge to someone. And when you think about it, the successful advisors are the people who are constantly being called upon to do that. All generations, it doesn't matter, as clients, that if you have that DNA to be able to constantly sit down and impart that knowledge, answer those questions, et cetera, that that part, again, you can't make people want to be patient and patiently impart knowledge and have patience with questions, et cetera. That part is the part you're looking for in the DNA. It's the part then, can I take this person who was in education for 5 or 6 years, prove that they had some sort of passion for it, and am I willing to support them going through and getting their CFP and the other things that they need for the technical side of being a great advisor.

Well, another good piece of advice. I wonder if you can close in our traditional Barron's way by offering an actionable idea to the advisors who are listening in. Yeah.

So my actionable— I did part A and part B of my actionable because I couldn't decide which one to use. So the first is, and this is something I coach my clients all the time, let's say they either just as an exercise or they believe they're ready to do another hire. I always encourage them to revisit the backgrounds of their current and even past employees. So when I say that, I mean, you know, what colleges did they attend, previous employment referrals, those things that I mentioned that sometimes show up as biases that you don't realize. And you really, really challenge yourself if you're not getting the diversity of all types of diversity, that if you're not getting that, challenge these biases that you've had in the past and take a fresh look. So if you look at your staff and 50% of them came from the same referral source, 50% of them came from the same school, et cetera, can you challenge yourself to look elsewhere to really bring some diversity in? So that's the first one. Go through that exercise, actually put pen to paper. And put that down. And then the 1B part of that answer would be the diversity of thinking styles and attributes such as risk tolerance, optimism, how people make decisions. Again, are you all sort of clumped in the same area, right? Were you hiring people that are like you, which means it felt comfortable to you? Or is there a way to sort of push that a little bit? I'm not saying go, you know, crazy off the other edge because there's a potential that would just create, you know, some real tension. But can you push the envelope a bit and say, for instance, I'm a big optimist, you know, if you are indeed an optimist, and optimism would be another one of these key traits that I have found is among top-performing advisors. But can I look for someone who also has some skepticism? And the reason why I use those two as an example is because then Let's say you just have a team of optimists. You hired optimists and this is awesome. There's a missing voice in the room every time you all get together to discuss maybe an opportunity, a client, whatever it might be. And that missing voice is the skeptic that would say, yes, but what about— have we considered this? So you always want to also map out sort of this diversity of thinking styles and traits in that Did I hire a lot of people like myself? And if so, has the time come to look for someone who will naturally bring that missing voice into the conversation? Wow.

Awesome. Well, as I expected, you've given us some great ideas and some, some interesting things to try and go put into action. So thank you so much, Fran. Great.

Thanks a lot, Sterling.

I'd also like to thank all of you for listening in. We'll be back next week with another newsletter and another 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.