Business Planning Improving human capital in advisor practices, with David DeVoe

In an era of consolidation and growing teams, financial advisors and registered investment advisors (RIAs) are still learning how to leverage human capital: the skills and knowledge base on your team.

When supported, human capital can serve as a powerful resource that can enhance productivity and long-term practice growth. Unfortunately, the industry is trending in the wrong direction, says David DeVoe, founder and CEO of DeVoe & Company, a strategic consultant to wealth managers.

“Human capital is trending toward mediocrity. It’s on a slow, steady decline across nearly every metric we measure” — from compensation plans that rank in the worse than unsatisfactory range, to inadequate training programs, to clear career pathing, he says.

DeVoe encourages RIA firms to take a long look at what’s missing in their firms and double down on the everyday actions that can strengthen engagement, retention — and support business valuation over time.

“A strong management team is one of the top factors buyers evaluate when valuing a firm,” DeVoe says. Even for firms that are not for sale, he says, using valuation as a “health diagnostic” can help improve operations, culture and long-term stability.

Motivating mission, vision and values 

Employees get both intrinsic and extrinsic rewards from work, DeVoe says. Extrinsic rewards are more obvious: salary, bonus, competition, praise. “They are external drivers that bring someone happiness,” he says.

Intrinsic rewards are all about the meaning you find in work, an answer to the question “Why am I doing this?” Intrinsic rewards are particularly important for younger workers seeking purpose-driven careers.

Fortunately, advisors work in a deeply meaningful industry that’s all about improving the lives of their clients. While you may be fully aware of what this work means and what drives you to provide exceptional service, it’s important to share that impact with the rest of your staff. To show how even a small shift in perspective can create meaning, DeVoe uses an analogy where two people are doing the same activity, but one describes it as “I’m cutting rock” and the other describes it as “I’m building a cathedral.”

If you have already defined your firm’s vision, mission and values, it’s all about socializing and repeating them often. “Your mission, vision and values should be the North Star for every strategic decision — and every human‑capital decision — you make,” says DeVoe.

For advisors who have not done this work and aren’t sure where to start, DeVoe encourages firm leaders to take a page from Simon Sinek, bestselling author of Start with Why: How Great Leaders Inspire Everyone to Take Action. Once you have defined the “Why” behind your practice, use it as a consistent driver for communicating decisions, shaping culture and building systems around people.

“The more an organization engages with that purpose that they have, it will not only help them make more consistent strategic decisions, it's going to create a gravitational force for the employees to stay. And it's going to create more energy for them to go out and do great things. And you're going to make everyone on your staff a happier person too. They're just going to be happier at work,” DeVoe says.

Career pathing and compensation

According to DeVoe & Co. research published in 2025, 68% of next‑gen advisors say they want clearer career paths. This includes structured promotion arcs, skills development through training, coaching and peer mentorship — all of which can dramatically improve engagement and retention. Peer pairing when onboarding new staff can be especially powerful. The analytics and polling firm Gallup found that having a best friend at work is of increasing importance to employees.

“It’s a reminder how important your people are, and how important it is to do the myriad of small things that lead up to major things that can make them happier and make them contribute to your organization in their best possible way,” DeVoe says.

To be sure, compensation is also important. And incentive compensation can be an effective way of motivating employees to get behind your vision. Data from DeVoe & Co. in 2025 showed the industry’s Net Promoter Score (NPS) for incentive compensation was an abysmal -31. To help bring those numbers up, he recommends advisors start by defining the three to five behaviors that matter most in a given role and designing incentive compensation around those.

Those drivers can then become a foundation for performance reviews, which go hand in hand with incentive comp, says DeVoe. He recommends quarterly conversations with employees, regular tracking and sharing of key performance indicators and real-time coaching on how to make improvements. The more specific you are about what is important to the role and what they need to get right, the better.

“Your job is to say, out of these 30, 40 or 50 things that you do, there’s these three or four that are critically important,” says DeVoe. “If you do 36 things wrong but get these four right, you're likely getting promoted. You do 36 things awesomely and you fail on these four … you're probably not the best fit for the organization.

“If you aren't telling your staff what these four things are and how everything they do intersects with the company, then you're undermining the success of your employees as you're undermining your own success,” he says.