Updated with correction
One clue to Edelman Financial Services founder Ric Edelman's management style is the mandatory sabbatical.
The annual, paid sabbatical requires all employees with six or more years of service to truly disconnect from work. E-mail is shut off and work cell phones are confiscated for four solid weeks. And the sabbatical does not replace vacation.
The reasons are both altruistic and practical, said Mr. Edelman. “It's important for them to recharge. Selfishly for us, it forces cross training and reduces key-man risk.”
The ultimate beneficiary, he said, is the client, who gets a seamless experience working with 110 Edelman financial planners and 320 support staff at any of the firm's 39 offices.
Clients also benefit from continuous educational outreach, which this year included 800 financial seminars that staffers are also encouraged to attend.
The former financial trade press journalist and his wife, Jean, started the firm in 1987 in Fairfax, Va., after getting erroneous advice from a financial planner, which made them mad enough to try to figure out a better way to help ordinary people handle finances. “The subject of personal finance is not complicated. Wall Street makes it complicated. We spend a lot of time on the message, how to talk to clients.” said Mr. Edelman.
In 2007, the Edelmans decided to grow the firm more aggressively, adding divisions to handle 401(k) accounts and institutional investors such as endowments, non-profits and small to medium-sized businesses. Institutional investors now represent $40 million of the firm's $14 billion in assets.
With those growth spurts, Edelman spends a lot of time making sure that employees share the client-centric focus. “”We have a very, very thorough interview process,” said Mr. Edelman, beginning with video interviews, then a 50-question compatibility test of the candidate's approach to personal finance. Candidates still in the running then go through as many as 20 interviews in a single day, to make sure that they “truly understand,” he said.
“We look for heart,” said Edelman President Edward Moore. “We want caring people who want to make a difference. I view that we are on a mission, to help everyone do better.”
“We are very upfront about it,” said Pam Becker, vice president for human resources and training. “We look at their skills and then we re-engineer.”
Employees do get the message. “Do the right thing for the client is the true mantra,” said one employee. “We are always encouraged to do the right thing for the customer,” said another. “We help a lot of people.”
Employees say they are proud of a work culture that stresses integrity, mutual respect and teamwork. They also appreciate generous benefits, flexible work hours, birthdays off and a Rolex on their 10th year with the firm. They get time off for volunteer service, a value that the firm emphasizes by example. The firm recently donated $1 million to a hospital to offer skills advancement courses for area nurses, who also get free financial planning, as do Edelman employees.
Creativity and collaboration are rewarded with “on-the-spot” gift cards and other recognitions from colleagues, while a “STAR” (steward, teach, act, relationship) engagement campaign lets each department creatively demonstrate how they embrace company values on a daily basis.
There is also a serious emphasis on everyone just having fun together, like the Halloween candy corn decorating contest, National Play-Doh Day, and themed lunch days. The firm's 25th anniversary in 2013 was celebrated at Disney World.
“There is always a fun event either happening or being planned,” said an employee. When the firm's strict “no-tie” policy became more common at other firms, Mr. Edelman moved on to crazy socks.
