AdvisorHub Culture Study Part 5: What Makes an “A” Culture Firm

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To win top culture marks from financial advisors, brokerages must demonstrate a commitment to inclusion.

In the AdvisorHub survey on culture, sponsored by brokerage firm Edward Jones, more than 500 financial advisors from across the industry were asked to grade their firms’ cultures on an A through F scale.  

According to the survey, 44% of the respondents gave their firm’s culture an A grade.  While that might seem like good news for the industry, it reveals that the majority gave their firms less than stellar scores. Notably, 13% assigned their firm poor or failing marks. 

Brokerage executives seeking to move their firms’ cultures into A grade territory in the eyes of their financial advisors need to excel in many areas, such as creating consistent and transparent compensation, allowing financial advisors to serve clients without the pressure to sell certain products, and providing for work-life balance.

But the difference between a B and A grade may lie in what firms are doing to make all of their financial advisors – including women and diverse associates — feel valued and part of the team. When it comes to culture, diversity, equity and inclusion matter more than ever.   

In 2020, 18.1% of all financial advisors across the U.S. were women and 12.3% self-identified as people of color, according to The Cerulli Report – U.S. Advisor Metrics 2020. 

“Attracting and retaining diverse and women financial advisors not only enhances our firm’s culture, it is critical to our ability to grow and meet the needs of an increasingly complex and broad client base,” says Vanessa Okwuraiwe, a principal with Edward Jones in St. Louis.

According to the AdvisorHub study, women and diverse financial advisors were more likely than men to agree that a firm’s culture is of personal importance. 

Moreover, a variety of cultural factors – such as the ability to choose an office location and serving clients virtually – were of particular importance to women financial advisors. 

Many financial institutions in recent years have been recognized for progress in embracing diversity, equity and inclusion; for example — Edward Jones received a perfect score of 100 percent on the 2020 Corporate Equality Index from the Human Rights Campaign Foundation. But beyond awards, it’s become clear that real actions support real progress. That’s why Edward Jones announced a five-point commitment to diversity, equity and inclusion to address racism and positively impact opportunities for women and people of color.  

“Part of the firm’s commitment includes continuing our focus on equitable hiring, training, promotional practices and policies,” says Okwuraiwe. “Through tailored programs, mentorship and support that meets associates where they are at, Edward Jones will continue helping people of color and women succeed.’’

A wide range of trainings and dialogues are key components as firms modernize their culture and drive toward greater inclusivity, says consultant, Cindy-Ann Thomas, a principal with Littler Mendelson PC, who provides training and other services to companies who see the importance of both monitoring their cultures and improving their diversity and inclusion practices. 

“I want my workshop participants to know that they are human and they have unconscious biases,’’ says Thomas, a former litigator in employment law. “After implicit bias training, people come away thinking, ‘I’m not bad, I’m human but I can see how my biases can get in the way of recruiting the right people or keeping people in my organization.’” 

While training and enhanced personal consciousness are valuable to foster cultural awareness and empathy, Okwuraiwe says firms must also create space to listen and give every associate a voice. 

Thomas agrees that understanding and listening are keys to success. “We want to take the temperature of an organization, how do people feel about working there, what do they feel about compensation, parental leave policies etc. and whether they feel included,” she says.

“A few years ago, I wanted more from our family leave policy,’’ says Julie Kelly, an Edward Jones financial advisor based in Durham, N.C. “Not only were my concerns heard by leadership, I was asked to join a committee to co-create change.” 

Kelly is not alone in the industry. Increasingly forward-thinking firms are recognizing the need to create a culture that provides flexibility for parents, both women and men. By giving financial advisors, like Kelly, a voice Edward Jones is creating a more equitable culture. 

As the result of Kelly’s and the committee’s efforts, today, Edward Jones has a family leave policy that is generous by industry standards – 16 weeks paid for primary caregivers. The policy was even expanded when Covid-19 hit. “An additional 10 days of paid time off related to the pandemic was also provided for caregivers in 2020 and the firm recently granted another 10 days of paid time off related to the pandemic for 2021,” says Kelly.  

Both women and men in the AdvisorHub Culture Survey reflected on the importance of flexibility in personal schedule and autonomy to run a practice, though interestingly, these were areas of significant gaps between what was most important to financial advisors personally and what they thought was important to their firms. 

The proof that Edward Jones’ efforts to build a lasting, inclusive culture are paying off in the recognition the firm receives from independent organizations such as market research leader J.D. Power. The firm, known for its customer surveys, also conducts an annual U.S. financial-advisor satisfaction study. According to the 2020 study, 87% of Edward Jones financial advisors said they would recommend the firm as a place of employment, twice the industry employee average of 44%. 

Edward Jones’ Okwuraiwe concludes that “our culture of belonging is rooted in our purpose: to partner for positive impact to improve the lives of our clients and colleagues, and together, better our communities and society.’’

In the sixth and final article in our series, we’ll address how the industry’s new virtual culture is impacting financial advisors and how firms are responding.

Related posts:

AdvisorHub Culture Study Part 1: 90% of Advisors Say That Firm Culture Matters

AdvisorHub Culture Study Part 2: Is Culture More Important to Firms or Financial Advisors?

AdvisorHub Culture Study Part 3: Culture and the Client Experience

AdvisorHub Culture Study Part 4: How Culture Impacts Financial Advisors Considering A Transition

AdvisorHub Culture Study Part 6: How Financial Advisors are Mastering the New Virtual Culture

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