Wells Fargo's Heather Hunt-Ruddy on Making Good Advisors Great

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Hello and welcome to The Way Forward. This is Jack Otter, Global Head of Wealth and Asset Management at Barron's, and I have the distinct pleasure today of speaking with Heather Hunt Ruddy, Head of Business Development and Growth, Wells Fargo Wealth and Investment Management. Uh, so thanks so much for joining us, Heather.

Oh, thanks for having me, Jack. It's good to be here.

So you told Barron's that your job in a nutshell is, quote, I help managers, client associates, and financial advisors deliver a great client experience and grow their business. And so I saw that quote and I thought, well, that's a really great way to spend a half hour with financial advisor listeners. And so I'm hoping that for everyone listening, the takeaway is, wow, how does Heather Hunrady do that? How does she deliver those things? And what will make my practice better? So that will be the goal for our talk here. Because you're at Wells Fargo, I am going to address the 800-pound gorilla in the room and then close the door on that gorilla. Um, so let's get it out of the way. How do you think advisors should best address the fake account scandal? I assume their clients are asking about that. It's obviously a different department, um, but you share the Wells Fargo name. So, so how did your team handle that?

You know, Jack, it was, it was wrong and it was unethical, and it's in the past in the sense that, you know, we have an entirely new leadership team in Charlie Scharf who's been working really hard with the regulators to ensure that we have every control in place to make sure something like that never happens again. And I encourage advisors to be completely transparent with clients about it in the way we are completely transparent with clients about most of our activities, all of our activities. So it's— you got to hit it right out of the gate because people have it on their minds. But we're getting the question a lot less these days.

Yeah, time, time is a great healer. And, and you sound like you handled it exactly right. That is first rule of crisis management, right? To get it out there and address it directly. So let's move on to, uh, your, your, your main job. Um, can you give us an overview of how you work with advisors, um, to deliver a great client experience?

Yeah, so listen, there's a couple of different things that I think are part of this piece of helping people grow their business. We are very interested in two parts of the business. Coaching to better outcomes, and hiring the right people. And I'll break it apart a little bit. On the coaching to better outcomes, we've done a ton of data. So for me, in the 32 years I've been in this business, the one question I get asked consistently over and over again is, what do the best advisors do? So when I took this role, instead of trying to recreate the wheel, we did an incredibly deep data analysis of what our best advisors do. And we learned that there are differentiators. And when those differentiators are in place, people's businesses grow faster. So let me give you a couple of examples. We know that clients appreciate a planning-based approach. Seems simple. People are elegant at planning, and people are inelegant at planning. And for me, planning is about not just having that right process or that right tool, but it's about the conversation with the clients. And being really good at listening more than you're talking. So I'll give you a quick anecdote. We just did a high-net-worth study of women, actually for International Women's Day. And there's still a 30-point gap, 30-point gap between what women want to talk about in a meeting and what advisors in the business are talking about. And what's interesting, there's actually a 28-point gap between what men want to talk about and what advisors are talking about.

Can you— I'm sorry, can I just do a quick follow-up there? So when you say that, is that they only talk about 70% of what the client wants, or what do you mean by 30-point gap?

It means that the clients want to talk about their lives, they want to talk about their families, they want to talk about their dreams, and we want to talk about performance, and we want to talk about what stocks we're purchasing. And so we have a, we have a gap in the listening game, and we have a gap in understanding that a client wants us to really know them before we try to build a financial plan around them.

Well, that certainly fits with everything we hear, so that makes sense. And, uh, tell us what you did with that information.

So, well, hang on, we're not quite done. There's other best practices. So let's hang on, hold the phone there, Jack. Um, number 2—

I'm so excited.

I know, this is really exciting stuff. Number 2 is around understanding that clients have credit needs and really taking a full balance sheet approach. So our advisors who engage with their clients looking at the entire financial picture— I will, I'm going to, I'm going to save a little bit of the punchline for the end. That's the second best practice. The third best practice, there's 5 of them, so just hang on with me. The third one is I'm spending the majority of my time with my top clients. So I'm focused, I'm going upmarket. The fourth one is I have a professional process for managing money. I either am a portfolio manager myself or I hire the best in the business. And last but least, I'm on a team. So I have a team-based approach, lots of different people that can answer lots of different questions. Okay. People who embrace these best practices do 300 times more business than the people who embrace none of them at our firm. 300 times, 300% more. And it is such a compelling example that what it says to me is, listen, clients want you to know them. They want you to talk about the entire picture. They want you to listen more than you talk. And when we can help advisors tweak and look at how they handle each of these best practices, magic happens. The second piece I wanted to mention that I started with was the hiring. Financial advisors have to act like the CEO of their practices. And some are really, really good at this. And that's about managing your team, right? You know, having employees who are well-paid and well-engaged, creating an environment of engagement where everybody feels like they're part of the process. And I have seen magic on teams when people are really engaged in leading their teams. And I have seen disasters. You know, the financial advisor who says to me, I'm on my 7th sales assistant in 8 years. My first thought, I have to admit, is always, well, something might be actually wrong on what you're doing there. So it's the 2 pieces: be the CEO of the practice and understand that those best practices You gather more assets. Clients are stickier. They want to stay with you longer. They want to refer their friends and family. They feel comfortable. They stay with you for a lifetime.

Well, that all sounds outstanding. I wonder if we can break some of it down. I mean, certainly the, the bottom line there, the 300% more business jives with everything we're hearing, which is the best advisors are growing at a much, much faster and accelerating rate because of all the things you just talked about and the referrals and all that. I want to pick up on your comment about the team. Because there's so much there that's clearly the direction this business is going in. Do you have a best practice in terms of how to structure that team, or do you leave it to the teams themselves to figure out? I mean—

There is not one way to form a team. There are horizontal teams and there are vertical teams. And each can work very successfully if they're set up the right way out of the gate. So, you know, I do, I use a lot of dating and marriage analogies in coaching. You know, when you're deciding to form a team, it should be taken every bit as seriously as I hope most people took it when they decided to get married to somebody. You should date for a while. You should get to know each other. And you should do a couple of joint client meetings and maybe even work on one or two together and see if it gels. Because teams tend to fall apart in two areas: work like somebody's not working as hard, and money. And when those things are set up correctly out of the gate, then you have a much better team synergy. Then as the financial advisor, it's your responsibility to create avenues for engagement with that team. Is your client associate talked about as one of your partners? Have you brought that man or woman along on client events so that your clients understand your service provider? Do you take care of them? Do you say thank you? Are you making sure that processes are perfect? Are you managing the team? And most financial advisors didn't get into this business to be manager, and yet it's the most important job they're going to do to determine the success. Because every time somebody leaves a team, the, the restart rate to hire somebody new is painful and it's time-consuming.

You know, that point about management struck me when you mentioned the CEO of the business because to your point, advisors, some of the older guys, they're usually guys, started as cold callers. Others maybe came in more as CFAs or there's all different routes, but most of the routes were not running a team. It's a different skill. How do you help people learn how to move from that, whether it's a sales position or the client-facing or the investment position? To being that manager willing to hand off all those duties that used to be his or hers to the team?

Well, we do a couple of different things. So I'm a big believer in hiring coaching. The best athletes in the world have coaches. Why don't the best advisors think about constantly setting themselves up in a, in a manner of constant improvement and constant learning by hiring a coach if they need one? We have internal coaching resources that we use at Wells Fargo that we're really proud of. We have programs to help grow productivity and help coach people into that role. But if you're not at Wells Fargo and you can't avail yourself of those, there are a lot of external resources to help with that. Sometimes the best thing to do is to bring somebody in from the outside who can sort of stand up on the hill and take a look at what's happening. You got to be vulnerable to do that, right? That person might tell you, "You're not the right person to manage this team." And I have a number of financial advisors who, at the end of the day, put somebody else in charge of managing the team because the skill set was never going to to be there. But what a brilliantly beautiful thing to do, right? Like maybe their office manager is the best leader of the team. They have to step out of the way and let that person do that work. Somebody needs to be the leader.

It worked at Google.

It worked at Google. That's exactly right. And it's worked in a lot of places.

Absolutely. So I wonder if it's possible, and I realize it's, it's distinct for each individual, and to your point, the skill set of that that individual. But I think you've been doing this long enough, you've probably seen certain techniques work well. Are there any things that our listeners can directly implement in their business? You know, some of your advice, some of the tactics that will help them grow and, and just build a better business?

I think every advisor should do an annual— I call it a gap analysis, which is an overly corporate speak, but it's, it's a, it's a sit-down every year. I have a friend who locks himself in a cabin every year, right around New Year's, by himself. And he looks at all of his metrics and his numbers, and he does a really deep dive onto what is working and what is not. So he's really honest with himself. And then what'll happen is he'll reach out to the right resources, and we'll help plug those gaps. So the biggest advice I can give anybody who's listening is, do yourself a favor, Take 4 or 5 hours, sit down with your metrics, understand, are your assets growing? And if so, where are they growing from? What does your depth of planning look like? What are you getting in terms of referrals from clients? When was the last time you got a referral? What is your social media and web presence? And what is your marketing plan? And have a, have a self-reflection session. Identify the gaps. And then seek help to meet those gaps. The best advisors, the absolute best of the best, it amazes me. We had one of our best advisors last year was entering into a succession plan to sell his business to the next generation. And he was 6 months from retiring. And he took a class to get a new designation. And I was kind of chuckling with him. And I said, I am just so curious why. And he said, I've been constantly learning. And I never want to stop. And I thought it was such a beautiful, cool way to think about the business. And sure enough, I'll tell you, that guy has grown year after year after year because he always wants to get better.

You just said a very important word to a lot of the teams that we talk to, and that's succession. So I want to ask you a little bit about that. What's your message to teams about succession? Do you have any best practices? You know, how early should that plan be in place? How do you convey it to clients? That sort of thing.

Well, I think a succession plan should be in place from a very early time. I, unfortunately, 32 years in this business and managing lots and lots of people, I've seen the disasters happen. We lost a 40-year-old in a plane crash. Right. And so, it's great to hope it never happens, but you have spent a lifetime building this resource for clients. Do you want to just have it be abandoned without thinking about what that looks like? So, I would think about the future, and I would think about your succession plan from a very early age in the same way we have things like life insurance from a very early age. The best practices for succession, the thing, the biggest problem that folks have is figuring out what life's going to look like for them after they retire. And so, you know, I think we need to help financial advisors decide what that's going to look like. And how they can take those amazing skills that they've developed over a 30 or 40 or 50-year career sometimes and take those out into their community and, you know, help kids in school learn things like finances that nobody teaches anymore. We've got to help our retiring advisors see what that next phase of their life is going to look like because when they can't envision that, it makes it hard to even think about hanging it up. And, you know, the worst thing is when a client assumes that you're going to retire, so they start to leave because you haven't defined for your client base what that succession plan looks like.

Sure. Really interesting. I haven't heard that point before about helping the advisor picture his or her retirement, which is of course what they're supposed to be doing with their own clients. Um, but, but that's a classic story, right? You know, you're worried about everybody else and not getting your own life jacket.

Physician, heal thyself.

Yeah, exactly. In terms of how you ease your successors into the leadership role, any particular advice there in terms of how they interact, how you get them to interact with the most important clients early on, etc.?

Well, I'm a big believer in having joint team meetings. I, I don't think every advisor has to be in every single team meeting, But if somebody is thinking about retiring even in the next 5 to 10 years, their clients should be getting to know the rest of the team. So I'm a big believer that in large teams, people should be able to be plugged into a meeting at different times so that the client gets to know everyone. One beautiful benefit of that is, let's be honest, some people don't click with some people. So Maybe you, maybe you've got the client who just doesn't like you, and you can find somebody on the team that they do like. But much more importantly, you can have the client get to see this entire breadth of people that can help. And you can get the client's family to see the entire breadth of people that can help. We know statistically, you, you know this as well as I do, that when the patriarch passes away, The industry loses the matriarch about 80% of the time. And when the matriarch passes away, the industry loses the children an even larger percentage of the time. And we all know those stats. So what do you do differently about that? You have a multi-generational team. You have a team of people with different skill sets. You have a team of people with different genders. You have a team of people with different ethnicities. And you present a picture to the world that looks much more like the community that you live in and where all types of clients can see themselves investing with you for years into the future.

Yeah, it's amazing how many great success stories I've heard in recent years because of that connection with the next gen. In some cases, it was the prospect, right? You know, the matriarch and the patriarch were smart enough to realize that the bulk of the time with this potential new advisor was going to be spent by their children, not by them.

For sure.

Why don't we move on to, um, the idea of mentorship? Because obviously, in order to be sure that your successors are going to do just as great or better a job than you did, you're going to have to bring them along. So what's your view of mentorship? What do you try to get across as a mentor yourself? And And how do advisors work with you to, to get that?

Well, I'm actively mentoring anywhere from 10 to 15 people still at a time. So even though I'm, I'm at more of a management level, I don't ever want to lose that piece of the job because it's frankly the piece that feeds my soul. So I have men and women that I mentor, and I still have financial advisors that I personally coach. Not many, but a few. A couple things on mentorship. The, the concept of mentorship is really about spending time with somebody, giving them an avenue to bounce ideas off. I'm much more of a fan, and I know the word sponsorship gets used a lot. I kind of even want to change that word to be champion. I want to be a champion to the people that I am mentoring. And a lot of those folks end up being home office team members, but it would work on a team anyway. So think about this. You've got somebody on your team and you see a spark in them. Perfect example, I had an operations associate years ago, and she was bright, and she was dedicated, she was driven. And nobody had ever given her the chance because she was an operations associate, and therefore that was the box she was in. And we, we yanked her out of the box. I mean, she was even scared to get yanked out of the box. And eventually we put her through our management training program, and she's running one of our largest branches right now. And I have countless stories like that where you can take somebody— what a gift for them. But, but let me be honest, that was so much more a gift for me. That was one of the best things I got to do. And I've gotten to do it over and over again. To help somebody realize their potential is powerful.

Yeah, that's incredibly fulfilling. That must be a great feeling. And I'm sure, I'm sure their appreciation for you will last forever. I want to pick up on one point that you made earlier, because the industry as a whole is struggling with that. And I think your line was that you want to build a team that looks like the community you serve. Barron's is thinking about this a lot in terms of how to help the industry, and it's not easy. What are you doing on the diversity front? Teams is clearly a way to handle that rather than the old model of, again, that cold caller calling dad's friends, which is how it worked 30 years ago. But it's still not that easy. What are you, what are you doing about diversity?

Well, we're doing a lot about diversity. So in our NextGen training programs, we actually try to feed the pipeline of people who are looking at those programs by something we call Community Champions, which is our program. But let me tell you, it's completely easy to be replicated at any organization. Here's what Community Champion does. A Community Champion takes it upon himself or herself to go out into their community. And they're going to speak to organizations. Those organizations could include graduate schools, colleges, diverse organizations, things like NABA, or, I mean, I go on and on and on— Latino chambers. I mean, you can— the lists are almost endless. And the Community Champion's job is to go in and talk to those organizations about 2 things: opportunities to invest at Wells Fargo, but much more importantly, opportunities to be employed at Wells Fargo. So we talk about our training programs. We talk about the career. We talk about being able to join a team. We talk about, you know, the, the certifications you can get, things like your CFA or your CFP. And what this looks like as a career so that we fill the pipeline with people who are excited about this business and don't look like we may have traditionally hired.

And you found success with that?

We have. We found a lot of success with that.

Um, so I want to switch over to— we've talked a lot about sort of what you're saying to the advisors. What are the advisors saying to you? What's keeping them up at night? Where do they most come to you for help? What are their worries?

Well, they're, they're always looking for help in finding the right person to hire. I think that's a need in this industry, and I think we need to talk about all the different aspects of this business as a career. You know, even a Client Associate can be a very fulfilling and wonderful career. So we need to actually keep refilling the people that are working in the business. So that's part of it. I'll tell you, in the last year, it's really been around the pandemic and the pandemic's impact on their clients and feeling disconnected. And so we've talked a lot about how to connect with clients virtually. It's fascinating And I'm sure you're hearing the same thing from other people you're talking to. For about 60% of our advisors, last year was their best year.

Yeah, it's amazing.

Now, why? Why? So I'm, you know, of course I'm such a data-driven geek that I'm like, I have to figure out why. And it makes a ton of sense when we did some time studies. When you're working from home, you are far more efficient in some senses. Not so much with your team, But you're not, you don't have the person walking into your office to chat. You don't have to go down the hall for coffee. You don't, you know, it's, it's much more efficient to schedule time with clients that way. So that's No. 1. No. 2, I think that a ton of our advisors have been concerned, and I, by the way, I'm concerned with them, about sort of how our teams are doing. Client associates have had a hard year. You know, so many of them are women, not all, but so many of them are women. And so many of them are young parents, men and women. And trying to work from home and raise a family and homeschool and be a chauffeur and cook, it's been hard on teams. So getting people back and getting excited about coming back into the office and getting excited about re-engaging, I think, is a big part of what's on people's minds right now.

Yeah, you said you don't have people walking into your office. Well, you meant colleagues, but you might have a 7-year-old walk into your office.

Or you might have the dog walk across the screen on a Zoom call, which happened to me yesterday, so.

Exactly, exactly. I wanna hearken back to this article I referred to in Barron's because the headline was fun. You apparently advise people not to be a tater tot. So I think we gotta get to the bottom of that. What is an advisor tater tot and how do I avoid that fate?

All right, well, I have to tell you the story really fast because otherwise it won't make sense. So in 1952, the O'Reilly Potato Company had a problem. So they were really successful in making French fries. If you think about America in the early 1950s, post-World War II, the growth of the suburbs, the growth of the American housewife, and ready-made foods became a very big part of the American diet. So if you're cutting french fries and you're a potato company, you have a lot of little potato scraps left over, right? So they decided to create an internal contest to see what they could do with all these potato scraps, and this idea was born that you could bind them together with a little bit of flour and you could make them into this tube and you could cut them off and deep fry them, and they were delicious. And by the way, they are delicious. Here's what happened. They put the potato— the tater tots, which That was the first name. They put them out on the market and they failed. Now, they didn't fail because they were marketed badly. They didn't fail because they had the wrong name. They didn't fail because they didn't taste good. They failed because they were priced so cheaply that that American housewife decided that she and anybody else who was feeding their families was not going to give their children scraps. So they pulled them off the market and they repriced them. Brilliant. And that's— it's an incredibly successful product because the low price suggested low value. How does that translate to a financial advisor? If we are racing to zero, if a financial advisor is, is trying to compete by being the cheapest, it is a race they will never win. Somebody will always be able to be cheaper. And by the way, there are already people at zero. It's hard to make a living at zero. If your value is only the asset management and you're trying to price it cheaply, you've already lost. If, however, your value— I'm going to circle us back to those best practices— if your value is around creating a deep relationship with clients where you truly understand them because you have a great planning process, where you can meet all of their financial needs, both assets and liabilities, where you're spending great quality time with them, where you're focusing your attention on having a professional process. When you do all of that, you can price it fairly. Clients will see value in that and they will pay for that. So that's why I tell people not to be a tater tot.

I've heard the story before, but I wanted to hear it again. It is a great story and it's a, it's a really great way to illustrate your point, which I guess you know, which is why you tell that story. We will soon have to wrap this up, but one more question before we get to the actual idea, and that is, let's look to what I hope will be a post-COVID year. I've certainly seen a lot of signs of the world coming out of its shell already. I went to a high school graduation the day before yesterday, and people were taking their masks off. So it has been a good year and it's almost, we don't say that without recognizing it's been a very tough year for a lot of people in this country, but advisors, the best advisors have done well. What should and can they continue to do to thrive in the rest of calendar '21 and beyond?

I think that you talked about being at the high school graduation. I was actually in an airport. So once I got fully vaccinated, I took a trip, which felt like nirvana. That airport was mobbed. And what that told me— I was sitting on the plane thinking about it. I actually texted my boss, "This airport is mobbed." And he's like, "I flew last week, same thing." It tells me that people are hungry to get together. They're hungry for engagement. So if I'm an adviser, I want to start planning some small, safe, outdoor-type events through the summer to get clients back together, to give them an opportunity to get out of the house, to have something to do that's fun. So if you're ever going to think about an event strategy, this might be the year to really get pretty strong on that because clients are hungry. Human beings are hungry for togetherness right now. So that's sort of my prediction for the rest of the year and what I think advisors should be focused on. But it actually kind of leads me into— I know you're going to ask for the one piece of advice. So, and it leads into the one piece of advice. There were so many painful things about COVID and we lost people that we loved, and it was tragic. And there were gifts to COVID. My 25-year-old son came home for 3 months, and I'll treasure that forever. And everybody has stories like that. But what we learned, and one of the best gifts from COVID is we learned how to operate in this virtual space. Clients learned how to— 85-year-olds learned how to Zoom. Zoom and FaceTime and, and how to wire money on their phones. And people who were resistant to technology were forced to learn it. So let's use that. Let's stay focused on having a hybrid model. And what I mean by a hybrid model is offer your clients a choice moving forward. When you want to meet with all the generations, you can do it over Zoom and you don't have to try and fly people in, but it gives you a chance to get to know the children and the grandchildren. You can say to your clients, do you want to do this in person? So make sure you're thinking through your web presence. I'm— I, I want everybody to remember the other thing that came out of COVID was we all ordered takeout, right? Right. So we ordered takeout all time, all the time, and we were trying to keep our local restaurants going. And I live in a city, so I don't know every single restaurant in town. So what did I use? I used Yelp. Clients look online to see what advisors look like. So having your web presence be really— not just look great, but be very personal to you, to tell the story of who you are, and giving your clients a virtual choice moving forward, I think is one of the best practices that everybody should employ.

And maybe we can get away from those Sears-style portrait photographs, right? Something a little better.

It would be great if you hired a professional photographer, yes.

So I do have two follow-ups here. We'll try to make them quick, but I couldn't agree more in terms of people wanting to get out. What is Wells Fargo's policy on events for your advisors?

So we're starting to see people travel again, and we are starting to ramp up our capacity in our branches based on what local rules will allow. So we're starting to see that activity creep up, and we're starting to get requests for people to get folks together, and we're excited to be able to do those. We're probably not going to do large internal events this year. You know, I don't think I'm going to put 600 people in a hotel conference room quite yet, but we will be strong and back and running in '22. So that's what we're doing, and we're encouraging our advisors to be in front of clients if the clients want to be in front of them. Some clients are still not comfortable, but you can Zoom with them. That's the beauty of all this.

Yeah, exactly. And then people will take the best practices that they learned from this process and and use them again. I can't imagine depositing a check in any way other than my phone ever, right?

But you probably— well, you, you, Jack, you're cool, so you probably were already doing that. But okay, then the number of clients who've learned how to do that because they had to— it's brilliant.

I want to do one quick add, which I wasn't planning to do, but we've talked about so many things that are part of this. Um, Barron's has just built a benchmarking tool for advisors and we'll give them just a little taste of some of that data that you were talking about, and then their ability to compare some of their metrics to their peers and then work with a coach if they want to, to help with that. And it won't get as deep as what you've said, but it will start people thinking about the things that that guy in the cabin needs to think about. And I think that's so important because it's so easy to get caught up in the day-to-day.

I think that's brilliant.

So this could go on for hours. Um, we are out of time. Is there anything that I haven't asked you that you'd really like to share, or do you think we've, we've nailed everything?

The only one last piece I'd love to make sure advisors hear me say is we have a moral obligation to help people invest in a way that helps them fill their dreams. So get out there and tell people what you can do to help them.

That is a wonderful way to end it. Um, uh, thank you so much.

It's my pleasure.

Heather Hunt, buddy, uh, we appreciate your time and we look forward to catching up with you again. To our listeners, thank you for tuning in. Uh, come back next week for another edition 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.