Three social-capital strategies that boost advisors’ growth

At the Conference of African American Financial Professionals in Chicago this week, Ariel Investments co-CEO John Rogers and advisor James Dean identified three forms of social capital that can help financial advisors expand their practices: talent recruiting and retention, nonfinancial networks, and mentors or sponsors. The event was hosted by The American College of Financial Services and drew hundreds of industry professionals.

Rogers, who co-leads Ariel Investments, which manages more than $16 billion and was founded in Chicago in 1983, focused on building and keeping a skilled team. He described using equity compensation and giving employees responsibility for parts of the business as methods that supported long tenures at the firm, including Mellody Hobson’s decades-long tenure. Reflecting on 18 years on Aon’s board and watching founder Pat Ryan grow a large company, Rogers told attendees, “we’re so much smaller than we need to be,” and said leaders should keep working to grow firms and create a multigenerational business.

James Dean, founder and CEO of JD Financial Group in Greensboro, North Carolina, shared practical steps for developing nonfinancial networks. He described sending handwritten letters to successful people across two nearby counties to request short meetings as an entrepreneur rather than to pitch services. “I went as an entrepreneur,” he recalled, explaining the meetings helped him build social capital and referrals. Dean suggested advisors use prior careers, hobbies or interests to connect with groups of potential clients and noted an example of an advisor who used a nursing background to cultivate relationships with medical professionals.

Speakers and attendees discussed mentors and sponsors as a source of openings and credibility. Rogers cited early influences such as Stacy Adams, John Johnson and George Johnson, saying those figures showed him a path to start a money management firm. George Nichols, CEO of The American College of Financial Services, framed mentoring as reciprocal, with established professionals inspiring newer advisors and newer advisors serving as role models for others.

Panels compared Ariel’s 128-employee firm with smaller advisory practices but emphasized that the three forms of social capital apply across firm sizes. Sessions recommended using equity-based incentives and meaningful responsibilities to retain staff, pursuing outreach into nonfinancial communities to build referrals, and seeking mentors and sponsors to obtain introductions and job opportunities. The conference included advisers, insurance agents and industry professionals addressing underrepresentation of Black financial professionals and sharing steps for client development and firm growth.