“I tell my people all the time: We’re not in the financial services business, we’re in the technology business. I long have realized: stay on the cutting edge of technology, or fail.”
Ric Edelman of Edelman Financial Services gave this advice at a session Monday morning on the first full day of the Investment Management Consultants Association’s national conference in Boston, sharing the stage with another successful advisor, Paul Tramontano of Constellation Wealth. The session, moderated by Matt Barthel of Barron’s, traced the growth of both firms but also yielded suggestions on what both men would have done differently and how advisors can succeed in the future.
For example, Edelman said he had built his now-nationwide practice largely by broadcasting radio and television programs (he says he regrets not having gone national earlier). With changes in the media, that route can’t be imitated by other advisors now, he said, so Edelman counseled the successful advisor to take one of two steps. “Partner with another advisor” to gain scale, or “become a ‘narrow-caster,’ focusing on a specific niche.
“Physicians have long been specialized,” Edelman said, relating a doctor acquaintance who “only works on thumbs.” Responding to a question from attendee and noted advisor Michael Kitces, Edelman said that advisors who want to succeed starting now should become the “plumbers’ advisor,” and not worry about not being the “carpenters’ advisor,” relating other advisors he knows who’ve targeted specific audiences like Marriott Corp. retirees or American Airlines pilots.
“The most productive thing” for an advisor to do, Tramontano said, is to “give away revenue” from existing clients who are no longer a good fit for you. Partner with another advisor to give away that revenue, he suggested, or just “give them away.”
As for investments that helped the two men grow their businesses, Edelman pointed out that he became an advisor in his 20s, so to demonstrate his expertise to clients and prospects twice his age, he decided to focus on “long-form education.” By using “any media available” for that education, including live seminars and eventually his radio and TV shows, he grew his firm.