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Technology > Marketing Technology

Wealth Advisor, Heal Thyself: Beginning the Course of Treatment

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According to the “Physician, Heal Thyself” proverb, it’s imperative for doctors to cure themselves before they are fit to heal their patients. Similarly, wealth advisors must paint a path toward a healthy future for their own businesses, as they do so for their clients’ financial futures.

As I broke down in Part 1 of my series, advisors must be honest and thoughtful about their current reality, and take the time to identify the demographic, regulatory and technology risks that define the current state of their business. The next step to ensure full health was discussed in Part 2; advisors need to define their future-state success with the use of SMART goals, outlining differentiators, focusing on time efficiency, developing optimal operations and determining an exit strategy.

Part 3: Beginning the Course of Treatment

For advisors to advance on the road to recovery, I want to offer some help in charting a path to get from “here” to “there.” If you’ve followed the first two parts of my series, you’ll have bookends for developing a strategy to achieve optimal health. Now it’s time to leverage that clear view of the future, and an honest inventory of your current reality, to create an actionable plan to get to your desired end state.

Consideration #1: Think Holistically About the Path to Recovery

As with a physical ailment where a path to the cure may involve rest, medicine, diet and exercise, the path to recovery for your business challenge is likely to be multipronged. When you think about adaptations needed for your end-to-end operations, ensure you are considering all elements of your business: how you market, how you prospect, the products you offer, your fees and how you serve and support your customers. You should ask yourself a broad array of questions like: Is your current team ready and willing to take on the efforts to get healthy? Is it clear what internal processes need optimizing? Do you have an understanding of the technology tools that will help you save time and money?

Take the Labor Department’s fiduciary rule, for example. The new legislation will continue to soak up valuable time and mindshare from today’s advisors, as defining “compliant” with the rules proves to be a thorn in the side of many. In fact, a new Aite Group study found more than one-quarter of advisors believe that their firm has handled deciding on a course of action poorly in some ways. While the rule may be amended or rescinded, it went into effect on June 9, and advisors must be able to take regulatory changes in stride and maintain operational health. Compliance is not buying a software package, nor changing a few operational workflows. Compliance requires a multipronged change to third-party relationships, fee arrangements, client communications and operational processes that are supported by technology and policies. Being able to think broadly about changes needed and having answers to the above questions will enable advisors to construct a path toward health.

Consideration #2: Work Backward From Your Desired End State

In your path to progressing on long-term goals, create interim milestones that will help you achieve your longer-term objectives. Think about it like those arrow-shaped guide markers that you see on every bowling lane. Understand the long term goal (bowl a strike), but focus on attaining the short-term objectives (roll the ball over a specific arrow 10 feet in front of you). Set metrics for the number of customers you want to advise, your average AUM, percentage of clients on your model portfolio and any other data points that are important milestones on the path to health for your business.

To make these metrics matter, and to hold yourself and your team accountable, write them down and track progress. My team at YCharts uses a tool known as the RACI Matrix (Responsible, Accountable, Consulted, Informed) to identify roles, responsibilities and interdependencies within our team for completing tasks. Not only does it lead to better collaboration and promote operational efficiencies, but it also allows me to understand who is accountable for each objective in our long- and short-term efforts to keep our business humming along.

Consideration #3: Ensure Accountability for Workstreams

I’m a big believer in “put a person to a problem.” Taking the RACI Matrix a step further, advisors should consider applying basic project management methodologies to all elements of their work plan.

For example: From a marketing perspective, build workflows and identify who is accountable for creating collateral to support your development and dissemination of market perspectives.

Data backs up the notion that advisors who leverage technology are enjoying a competitive advantage. A new study from Fidelity revealed that tech-enabled advisors have 42% higher AUM and 35% more AUM per client. If a technology refresh is on your path to success, determine who will be leading the charge in learning about new products and tools. Who is responsible for researching new hybrid robo-advisor approaches?

While technology is proving beneficial for advisors, it’s still critical to understand what your investments in improving your workflows look like. Ask yourself, what are the hard costs (tangible cash outlays) of this effort? Of at least equal importance: What are the soft costs? These are the opportunity costs, a quantification of the impact of what you can’t do because you are focused on a new body of work. As time goes on, keep your team accountable by asking for mini project plans and checklists to ensure responsibilities are being met and your team is steadily working toward achieving optimal health.

Consideration #4: Prioritize Your Efforts

With a holistic view of your business, you can prioritize interim milestones or stepping stones you need to achieve individual workflows.

Make sure you are getting the most bang for your buck from an effort vs. impact perspective. First, get some quick wins to build momentum and buy-in on the longer journey. I often do this by focusing attention first on “low-hanging fruit.” I generally try to avoid high-effort, low-impact items and big-bang plans, such as shifting entirely from a legacy model or infrastructure to something new all at once.

Remember that change takes time, and there are rarely instant cures. The recovery/improvement process can take months and even years. Don’t bite off more than you can chew. Instead, sequence your steps and take it day by day. Be patient and understand that one effort, such as a key hire, or a new technology component, or a marketing plan could be key building blocks or foundational elements to reaching long-term goals and moving you along on the path to full health.

Consideration #5: Monitor Your Progress and Don’t Be Afraid to Make Course Corrections

The world is not sitting still while you adapt or transform your business. The Financial Times recently quoted Amin Rajan, CEO of Create Research, who said investment companies that have failed to modernize their technology risk losing business to more digitally clued-up competitors. Don’t be the business that gets overtaken by new approaches because you are steadfast with your current plans. Be the business that is ready for them.

As new regulations emerge, new technologies gain market traction and markets continue to move, best practices will evolve. Don’t engage in overly long steps on the journey. Break steps down into small pieces. At YCharts, we leverage this approach when we create our software. We subscribe to “agile” tenets. Small, quick deliverables that make tangible progress on journeys and receive near-instant market feedback/validation.

Move at the speed of the market. Two-year journeys miss market opportunities and end up with the wrong solutions. Twenty two-week journeys deliver quick wins and ensure you are consistently hitting the mark.

Your plans will need to change, and that’s OK. A Dwight Eisenhower quote that motivates me every day reads, “No battle was ever won according to plan, but no battle was ever won without one.” Keeping that in mind, you and your stakeholders should meet on a monthly basis to review progress and brainstorm ways to keep on the road to recovery.

While many advisors may be unsatisfied with the state of their business now and concerned about their futures, I’m hopeful my 3-part series gives advisors the three key steps needed to get healthy:

  1. Have the courage to confront their “sickness” head on by asking themselves the right questions to diagnose what is ailing them
  2. Define, in precise terms, the characteristics of your healthy end state
  3. Build an ambitious, yet realistic, holistic plan to chart their way back to a healthy state and don’t be afraid to tweak this plan as market conditions dictate.

Today’s advisors are dealing with the perfect storm of margin-degrading factors. When you understand what is ailing you, you can find the solutions that will help you save money and get your day back.


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