There are few more personal services than financial planning, and finding the right personnel to help clients manage their wealth is naturally an important concern for accounting firms with PFP practices.
That's why, even in a time of serious market volatility and economic uncertainty, managing client expectations and keeping clients calm in difficult times were not the biggest concern of Accounting Today's 2023 Wealth Magnets — not by a long shot. Nor was it the fact that many of them reported flat or slightly declining levels of assets under management.
The problem most commonly cited by this year's class of the top Firms by AUM is the one that's preoccupying everyone in the accounting profession: the war for talent.
(See our full "
"One of the biggest issues we're facing is finding new staff who possess both the technical and interpersonal skills to provide our clients with the superior service they deserve," said Withum Wealth Management principal Carmine D'Avino. "This holds especially true as we continue to expand our operations, most recently establishing our presence in California."
"Human capital, without question," agreed Brian Harris, the owner of Strada Financial Group. "We're looking at a $60 million AUM acquisition and the only reason we may not be able to complete it is due to a lack of qualified advisors that still believe in human interactions and relationships."
Many of this year's Wealth Magnets are making concerted efforts to build their pipelines of future staff. "We have increased our college recruiting by attending college career fairs and meeting individually with students both in-person and virtually," reported John Valleau, an advisor at ShankerValleau Wealth Advisors. "Additionally, we have begun an internship program."
It's worth noting that, while staffing has been mentioned as a concern for the Top Firms by AUM in previous years, it has risen in prominence recently.
"Maintaining and finding qualified associates was more difficult in the past couple of years," explained V. Peter Traphagen, managing partner of Traphagen Investment Advisors. "We continue to support our existing team and provide them avenues to accelerate professional growth at the firm, as well as financial support for coursework and exams such as the CPA, PFS, CFP, AEP and CFA."
"It's important to continue to challenge staff to enhance their skill sets," he added. "As fiduciaries proving holistic planning, CPA wealth advisors need to continue stay current and advance their skill sets. You won't know what planning you missed if you didn't even know the planning opportunity existed."
Solution and problem
In search of ways to alleviate the problems caused by the talent shortage, some of the Wealth Magnets are turning to technological solutions.
"The only way to build capacity is to be super-dialed in on our technology and let computers do what they can do so the humans can do what they do best," said Strada Financial Group's Harris.
But for many others, technology itself is a key concern, being cited as an issue more frequently than anything except staffing.
"Technology is both evening the playing field when it comes to managing stock portfolios and providing new opportunities to improve the client experience," said Eric Zeitlin, CEO of Provenance Wealth Advisors. "Technology is causing fee suppression and clients are looking for lower fees, and some firms are charging lower fees due to the increased technological capabilities. As a firm we need to utilize technology to improve efficiency so that we are able to do more with less, which will hopefully even out our bottom line with the decrease in fees charged."
One factor that makes tech a concern is the speed at which it changes. "Our biggest current issue is trying to keep our investment operations systems up to date with the latest technological capabilities," said Erin Jeffries, chief marketing officer of Cain Watters & Associates.
Another factor is the way it enables fraudsters and criminals, who naturally target accountants and wealth managers because they have access to financial data and clients' accounts.
"We have also seen an increase in hostile technology such as phishing and fraud attempts," Morgan Weadock, a senior operations analyst at Joel Isaacson & Co. "Our manager of IT works hard to prepare employees and protect the firm against these attempts. We have updated a lot of our cybersecurity policies and do tabletop exercises on an annual basis. We are also looking outward and providing resources to our advisors and their teams how to protect our clients with their personal accounts."
The challenge of growth
As noted in this year's report, the 2023 Wealth Magnets are definitely taking steps to help clients manage their financials amid the current combination of volatile markets and rising interest rates — but they are also keeping an eye on the long-term, particularly when it comes to managing their own growth.
"The key challenges we face at Savant relate to growth and organizational change management, which are good issues to have but must be addressed thoughtfully," Ray Herber, assistant controller at Savant Wealth Management. "On our current trajectory, we are projecting an exponential expansion of our wealth management practice over the next three to five years, driven both by organic business development and an opportunistic M&A program. We have put considerable planning and resources into ensuring that we execute an intelligent growth strategy that suits us culturally and operationally as a company, and best serves our clients."
A big part of that future, of course, will rely on firms being able to find the staff they need to succeed there. "With growth comes an increasing expectation from customers for expanded service offerings such as tax, accounting and estate planning, to suit their evolving needs in a dynamic marketplace," Herber continued. "To keep up with the demand for tax and accounting services from our expanding wealth management clientele, we are proactively growing our CPA ranks through aggressive recruitment as well as M&A."
