My partner Jim and I often talk about how financial advisors are compensated in our industry. Without getting into the weeds, for the most part, an advisor’s compensation is typically tied to some revenue target, which you have to hit within a specific period of time (often the short duration of the training program, especially at the larger financial institutions), or else you’re gone. Goodbye. We don’t think that this is the best way to keep good people doing good work. Nor is it the only way to build a team.
One thing that author and leadership expert, Simon Sinek, talks about is the idea of doing away with those kinds of revenue goals in general. We’ve wondered, debated (and continue to think about), what a world would look like if an advisor didn’t have to hit a hard and fast quantitative goal in order to be considered successful. What would Beck Bode look like if we ‘measured’ our advisors against the yardstick of exemplifying our values, rather than hitting some ‘production goal?’ Wow!!
A core value of our firm is to help people get better every day. Now I know that money isn’t everything, but I can tell you from personal experience that money can open the door to richer life experiences, and to opportunities not just for ourselves, but for those we love. It allows us to contribute to causes that are important to us.
As a firm, we impact a wide range of people. By helping them with their money we can create opportunities for them to ‘be better’ as people – whatever that word ‘better’ means to them. For some, it may mean being able to afford a college education for their child(ren). For others, it may mean getting their finances in order, or maybe stop ‘keeping up with the Joneses.’ It may mean creating a healthier relationship with money and as a result, creating healthier relationships with the important people in their lives. If only you knew how many people with big mortgages, fancy cars and country club memberships live paycheck to paycheck. The amount of pressure this kind of lifestyle puts on people, and the friction it puts on their relationships ultimately affects their health and longevity. What is the point of saving for the future, if you can’t live long enough to enjoy your money? To us, ‘being better’ is living long enough and having your money last long enough so that you can have the impact you envision in the world.
We know that as financial advisors, at Beck Bode we impact anyone who wants to expand the range of opportunities in their life. In our world, we put money at the center of that impact, not because money is the most important thing in our value system (it isn’t), but because money is a tool. Like any tool, it needs to be appropriately deployed to the right spot so that people can put themselves on the right track, to a better life. The ‘right’ track is not dictated by us. It’s dictated by the client. We don’t tell people “you need to get fitter” (financially, physically, relationally, etc.), but we do offer a perspective that by exercising discipline today, you may be able to make tomorrow a lot brighter. When we create opportunities for our clients, they in turn can create opportunities within their spheres of influence and care.
When a financial firm is focused exclusively on revenues, it shows. In our industry, there is such an intense focus on growth, that recruiting advisors is just as cutthroat as delivering results to clients. When the leaders of a firm are singularly focused on adding team members to hit yet another ‘hard and fast’ metric (advisor headcount), compromises are made. Not every recruit will necessarily embody the core values of the firm. Over time, that shows in the culture of a firm.
As leaders, we have to exhibit a whole lot of courage in terms of worrying less about whether or not our core values resonate with every recruit who walks in the door. Ultimately, we want to attract folks who are aligned with what we feel so strongly about, the centerpiece being our core value of getting better every day.
It’s exciting to think about what a financial firm would look like if it focused on impact, first and foremost. Imagine the kind of people we could attract to our cause! We want a firm filled with people with dreams of their own, dreams of helping others fulfill their dreams. Dreams of creating opportunities not just for themselves, but for entire communities. That’s the stuff that gets Jim and me excited. We know that if we continue down this road, we will attract the kind of people for whom this vision is wildly exciting.
Jim and I always wanted to create a firm that was bigger than ourselves. Bigger than what we could do for our kids and our families. We wanted to increase the size of our own impact and pave the path for others to do the same. A values-based approach is perfectly aligned with our dream. The beauty of Beck Bode is that we are an entrepreneurial firm. We’re not some large, lumbering financial institution, bound by industry norms, slow to change. We are innovative, nimble and creative.
Changing how we measure performance – from strictly revenue-based targets to more values-centered goals represents a monumental shift in thinking and practice. It’s counter to conventional thinking, and maybe precisely for that reason is seriously attractive to us. Other financial firms may call us crazy. Swimming against the current makes many people feel uncomfortable. We’re drawn to doing things differently, taking calculated chances, for the sake of being better.
Ben Beck is Managing Partner & Chief Investment Officer at Beck Bode, a deliberately different wealth management firm with a unique view on investing, business and life.