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August 21, 2012 at 08:00 PM
According to the Chinese Zodiac, the year 2013 is the “Year of the Snake.” People born in the Year of the Snake are said to be clever, calculating and deliberate in planning to achieve their goals.
Some of us are attracted to snakes because of their swift movements and silky, regal bearing. Others are repelled by snakes because of their perceived threat. Those who find the way of the snake appealing may choose to emulate their stealthy methods to advance their businesses. Others may wait to see if and when the snake rears its ugly head.
In recent years, the financial advisory business has experienced the fallout caused by evil snakes who struck silently and with cunning. Regulators and their sponsors have intensified their scrutiny. Clients and prospects are more wary. Prospective employees are avoiding the profession. Many people have come to view our profession as dangerous.
These challenges mean that a multitude of advisory firms now find their strategy drifting alongside rising costs, with little momentum propelling them toward building an enduring business. Yet take note: Some advisory firm leaders have adopted the positive traits of the clever snake, moving quickly and decisively to capitalize on the new opportunities—for the good of their business, not to the detriment of their clients.
Native Americans are said to view the snake’s shedding of its skin as a sign of rebirth. That is a good metaphor for the coming planning season. It is time to shed your worn, wounded perspective and look on your business with fresh eyes.
How will you prepare for the Year of the Snake?
As summer draws to a close, we gear up for the coming year. Enlightened firms prepare for their autumn planning sessions by gathering data about their business, their clients, their competitors and outside forces such as elections and economic trends. This information impacts how good managers run their practices and serve their clients in the year ahead.
The most effective strategic planners focus on the four cornerstones of business success: growth, risk management, process improvement and human capital. While advisory firms have recovered, generally speaking, from the horrors of five years ago, most have not taken the opportunity to look much further than the coming quarter to create transformative change.
Let’s examine the planning process to identify some potential incremental improvements in the Year of the Snake.
Growth
Most advisors accept that the current organic growth environment for client portfolios is low. They assume, therefore, that revenues derived from asset management fees will also be relatively low. In many cases, the rate of withdrawal by retired clients is also putting pressure on revenue growth. Meanwhile, advisor productivity is declining, due to the greater attention devoted to compliance and client handholding.
So, how can you re-energize your entire team around a single new initiative that could help your business grow at a faster rate? First, narrow your focus. There is no need to embark on multiple initiatives, especially if you and your staff have little time to spare. Look to see if there is a niche inherent in your client base, or a seminar idea that you could repeat multiple times, or recruiting opportunities that may stimulate revenue growth. Sometimes small, incremental steps done exceptionally well can produce a better outcome than taking on too many ideas at once. What is that one great idea you can commit to—and excel at executing—to drive results?
