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 While the rule may be amended or rescinded, it went into effect on June 9, and advisors must be able to take regulatory changes in stride and maintain operational health.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.