New study puts spotlight on RIA best practices for managing human capital. Many independent registered investment advisors (RIAs) are stumbling in the dark when it comes to understanding and implementing best practices in the realm of human capital management.

"Without some insight into what their peers are doing successfully, most advisors are forced to go it alone on organizational management issues, designing their own systems and processes by trial and error and hoping to discover what works," says Stacey Haefele, president of HNW, a New York-based marketing consultancy to private-client advisors and their firms.

With that dilemma firmly in mind, Pershing's Advisor Solutions affiliate and HNW set out to examine successful strategies in RIA-related human-resource management. The result is A View From the Top: Best Practices in Leveraging Human Capital, a quantitative report designed to help RIAs make their businesses more successful by identifying and examining best practices for attracting, hiring, and retaining employees.

Maximizing value

John Iachello, managing director of Pershing Advisor Solutions, says that as RIAs fight to address the increasingly complex demands of their high-net-worth clients the importance of having standards and procedures in place for attracting, hiring and retaining top-tier talent is increasing by the day.

"To be successful in today's competitive business environment, advisory firms need to operate at maximum efficiency, gain organizational leverage wherever possible and maximize the value of their associates," adds Iachello.

A View From the Top based on responses from principals of fee-based or fee-only practices with at least $50 million in assets under management and at least half of that derived from private as opposed to institutional clients.

The study shows that firms with annual revenues of at least $1 million put more time and resources into human-capital development than their lower-tier-revenue counterparts. Higher-tier firms are big on corporate-style HR mainstays like new-employee orientation, regular training, periodic performance reviews, and formal reporting structures. More than half of the high-revenue firms questioned say they rely on client-segmentation strategies to align senior personnel with the firms' most remunerative and complex relationships while encouraging junior talent learn the ropes on less challenging clients.

High-revenue firms are also more likely to use recruiting and retention tools like competitive salaries, benefits, profit sharing, equity, and signing bonuses to attract and retain top talent. They're also fairly adept at turning their firms' reputations and cultures into lures for strong candidates.

On the other hand, high-revenue firms don't balk at ditching their deadwood -- and at having systems in place to make sure it's done efficiently.

A View From the Top is free. You can email Barbara Gallo or Michael Geller in Pershing marketing department to request a copy. -FWR

.