The financial adviser evolution is underway

We’re in the midst of an adviser revolution. Or, maybe it’s better to call it an adviser evolution.

While most of us look at the next 12 months with renewed excitement, inspiration and focus, we’re also overwhelmed with the opportunity and unforeseen obstacles in front of us as business owners.

The pressure is palpable. What once was an invisible force shaping our industry now has a face in many forms:

• Stealth fee compression (expected to provide more and charge the same)
• Consolidation of firms, both large and small
• Growing friction between advisers and institutions
• The aging population of advisers
• The looming possibility of a down market
• Ever-increasing consumer expectations
• Headwinds in net new asset growth

We’re not the first industry to feel this wave of reinvention. Several major brands once ignored the writing on the wall and, either through arrogance or blind faith, decided status quo was survival. Netflix killed Blockbuster, Uber killed taxis, Amazon is influencing the next generation of retail shopping behavior, and Airbnb is changing the way people think of travel experiences.

As I’ve reflected on the evolution of our own firm, it occurred to me that advisers need to view their businesses through two lenses in 2018: anchors holding their businesses back; and engines that will propel them forward into the new age.

Through questionnaires, coach conversations and surveys, we’ve put our finger on the pulse of more than 1,200 firms, and one thing comes up time and again: The marketplace is clamoring for high value, not low cost.

Bloomberg reported that by the end of this holiday season, fast delivery will most likely outpace low prices with retailers like Amazon and Walmart, illustrating that consumers are finding value in convenience above all else. They’ll be looking for the same from their advisers. While the shift seems subtle, it’s quickly changing the way advisers position themselves and their holistic value as a firm.

4 anchors weighing firms down

Technology: Keeping up with technology has never been more important or as elusive.

Relationships: The friction between advisers and their traditional “relationships” is growing. Teams are facing a compounded uphill battle in attracting talent, both because there are fewer credentialed professionals and because even less are entering our industry.

The whirlwind: Advisers have a habit of wearing too many hats, and are unable to accomplish the pressing issues of the day because they’re fighting fires from every role and department. Be comfortable with being a librarian, not a library. Letting yourself take on too many responsibilities will only hold you back in the long run.

Adviser apathy: Perhaps the most invisible “anchor” we see is the growing complacency many advisers have when assessing the future of their business’s health. From small practices serving middle-class families to the large institutions and B-Ds influenced by shareholders, I see many who underestimate the change coming their way and overestimate the time in which it will happen.

4 engines advisers should embrace

So what can an adviser do with the relentless barrage of these shifts influencing our day-to-day? They can embrace “engine” thinking, turn their anchors into opportunities, and begin building the business that 2018 will demand. What is required to do this?

Client acquisitions: Gone are the days when your time is spent managing investments or masquerading as the IT guy. Dump the responsibilities other people can do better than you and use that newly found time to reinvest in the growth of your business. Focus on building relationships, growing assets and making the shift from adviser to CEO.

Reevaluate relationships: Transparency is forcing advisers to examine the relationships they have that create friction when attempting to put the client first. Consider the embedded costs to doing business with certain broker dealers, compliance issues, response times, archaic technology and motives that guide decision-making.

Total integration: Rising client expectations have created a new standard for delivering an integrated experience. One place for your clients to go for everything they need. One dashboard. One login. One focus. There’s a difference between having integrations and being integrated. Trust me, your clients know that difference.

Advance your “AQ:” With the pace of change, one of the most advantageous qualities of a business is its “AQ” (Adaptability Quotient). Make it a goal in 2018 to be more nimble as an organization. Change with the needs of your clients and provide an offering that adjusts as they do.

Your business is your biggest asset. Give it the time, effort and investment it deserves in 2018, and you’ll be surprised at how far you can go to compete in the future.

Ron Carson is CEO and founder of the Carson Group, which serves advisers and investors through its businesses: Carson Group Coaching, Carson Group Partners and Carson Wealth. Follow him @RCHusker