Take a few minutes to read brochures, look at websites and listen to the spiels of advisors describing their businesses: No wonder people looking for financial help find it hard to tell the difference between the many options.
Not only are many descriptions generic and poorly conveyed, but the variety of business labels—advisor, consultant, wealth manager—further complicates the marketplace for consumers. Perhaps regulators should consider overseeing financial services firms based on what they call themselves. If nothing else, this would force our industry’s different providers to describe what they do in terms the consumer can understand, and direct the enforcers to the relevant sins committed by these firms.
The point is the lack of clarity in financial services business models and the profusion of practitioners plying their trade using virtually the same branding has created a saturated market. How do the great companies succeed in this environment?
Mike Harris, a serial entrepreneur in the United Kingdom, says “to compete in a saturated market, you have to stand out in glorious Technicolor. And you have to make your competitors look dull and boring.” While many birds find shelter by blending into the trees, we notice the ones that stand out with bright colors, distinctive loud calls and impressive abilities.
At the recent Pershing European Client Conference in London, Harris exhorted participants to think differently about their businesses and to break free from the crowd. He knows what he’s talking about. Harris has created several billion-dollar enterprises including First Direct, Egg PLC and Garlik Ltd., and wrote the bestselling book “Find Your Lightbulb: How to Make Millions from Apparently Impossible Ideas.”
Harris criticized the idea of companies hiring consultants to teach them “best practices” instead of helping them to innovate and differentiate. He pointed out how dull and boring businesses can become and how that stagnant attitude eventually rubs off on the people who work for them.
Harris said, “When you make your company stand out in glorious Technicolor, you liberate curiosity and insight, and evoke determination. You rid your business of its dull pallor, blind spots, boredom and bureaucracy.”
As entrepreneurs, many advisors find their lives anything but boring, but check to see if employees share your exuberance and if the marketplace sees your firm as something special. Ultimately, the question regarding both clients and employees should be: “What will attract them to my firm, and why would they stay?”
Our industry suffers from the tyranny of best practices. We mimic the strategies of others, seeking out what worked best for competitors and attempting to apply similar tactics to our own businesses, without first considering whether differentiation might create a better result.
Harris noted that too many businesses focus on the process of innovation rather than the leadership required to drive innovation. Quoting Steve Jobs, the brilliant founder of Apple, Harris relayed the famous line, “We’re here to make a dent in the universe.” He added, “In business, we must first define the dent.”
In this vein, Harris advised firm owners to investigate three questions:
- What is the purpose of my business, beyond making money?
- What do I want to be known for?
- How do I want to leave people feeling?
Defining your mission is important, especially when discussing your business with people whom you wish to recruit or promote. While the financial rewards of the advisory business are compelling, the work would be exhausting if money was the only motivator. Benefits also include intellectual challenge and a degree of independence. But is personal fulfillment your firm’s purpose?