Leveraging values in practice management

What do we mean by “values?”

Simply put, your firm’s values are the guidelines by which your entire ecosystem operates. They define how your team members interact with and treat each other, your partners, your clients, and the communities within which you operate. Your clients’ values are the guidelines by which they interact with and participate in their communities, society at large, and the world. 

It’s no longer enough to have your clients’ best interests at heart. Consumer behavior is shifting, and clients expect more than strong returns. 

Clients are desperate for wealth managers who share their strong desire to make an impact. They want someone who will take the time to understand and achieve their unique goals. 

It’s increasingly important to investors that their wealth management firm/advisor has well-thought out values of their own that show up in everything they do. Those values create consistencies in their client experience and provide a comfort and ease that they might not feel otherwise.   

To win in this new era, firms need to evaluate and integrate their values throughout their business.
 

Four key trends are reshaping the industry. 

1. Advisors are leaving the industry faster than firms are replacing them.

• 40% of U.S. advisors are over age 55 and about one third of the workforce is expected to retire within 10 years.¹
• According to McKinsey, values, culture, and contributions to society are among the elements of a business that top performers value most.²
• Almost three out of four adults would not apply to a company whose values do not align with their own.³
• 86% of millennials say they would take a pay cut to work at a company that holds the same values they do.⁴

2. A massive generational wealth transfer is just beginning.

• Historically, 90% of heirs change advisors, which provides both a threat and an opportunity.⁵
• The generational gap between advisors and the next generation, and the lack of diversity among today’s advisors, make it difficult for some advisors to adjust. 
• Start building multi-generational relationships now by taking a deliberate approach to understand what’s important to both your clients and their families.
• Earn their trust and help them build a legacy by uncovering their shared family values.

3. There’s a growing demand for purpose-driven investing.

• Increasingly, investors today believe that their actions can have substantial social and environmental impact. It’s no longer just about maximizing profits. 
• In 2020, sustainable investing accounted for one in three dollars of U.S. AUA, which is a 42% increase over just two years prior in 2018.⁶
• Investors are also pressuring businesses to disclose the impact of their ESG-related activities. They want to know who benefits and who is harmed across a firm’s value chain to make more informed decisions. 

4. Competition is increasing. How can you stand out?

• Clients are moving assets between financial institutions at an unprecedented rate: 20% of North American clients and 30% of UHNW clients, plan to switch wealth managers in the next three years.⁷
• To keep these clients and attract new ones, advisors need to deliver more than strong returns. Advisors today are primarily competing on relationships, trust, and company culture. That’s where a values-forward approach can provide a competitive edge. 
• Move beyond talking about investment products and find out what’s important to your clients (and families). 

Building your business to last 

At SEI, we’ve seen firsthand that a values-forward approach has an incredible impact on company culture, with a follow-through impact on client service. It’s how we’ve thrived for more than five decades in the wealth management industry. Our core values have provided an enduring foundation for our strategic partnerships and a clear path forward for each generation of leaders. It enables us to help our clients build brave futures^SM. 

Sources

1. “10 Disruptive Trends in Wealth Management.” Deloitte, deloitte.com, 12.

2. Keller, Scott; Meaney, Mary. “Attracting and retaining the right talent,” McKinsey Insights. mckinsey.com. Nov. 24, 2017.

3. "Mission & Culture Survey." Glassdoor, glassdoor.com. 2019.

4. McQueen, Nina. “Workplace Culture Trends: The Key to Hiring (and Keeping) Top Talent in 2018.” LinkedIn Official Blog, June 26, 2018.

5. Deloitte,12.

6. “2020 Report on US Sustainable, Responsible and Impact Investing Trends.” US SIF. ussif.org. 2020.

7. “2021 EY Global Wealth Research Report." EY, ey.com. 8.

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