If there's one skill that an adviser needs today, it's the ability to manage change. Look at some of the many and varied high-level trends that have been grabbing headlines in our trade publications:
• Fee compression and transparency
• The shift from brokerage to advisory accounts
• The growth of passive investing
• Charging separately for financial planning and investment management
• Business models and the growth of RIAs and hybrids
• The decline in the number of solo firms, the uptick in the number of multi-adviser firms, and the emergence of true ensembles and enterprises
• Streamlined technology to help advisers run their businesses and clients track their investments, performance, and goals
• The DOL fiduciary rule coming ... and going
• The aging of advisers and the threat to our industry from the lack of young advisers
• The consolidation of advisers and the suppliers who support them
• Compliance and ever-increasing regulation
• The host of choices available to consumers for obtaining financial services
This list is certainly not exhaustive. How can advisers keep up with everything that's going on — and do so efficiently?
What's the Right Thing to Do?
That question comes directly from Peter Drucker. Deciding on the right thing to do is the first priority. You can't do everything and certainly not all at once. Even if you could, why would you want to? Just because something is a trend doesn't make it the right thing for you or your firm to embrace.
For example, let's take robos. To most industry observers, the notion of a robo-adviser developing a relationship with a client is a farce. Yet by the time some future clients have accumulated their wealth, they may be quite used to robot-based relationships. Does that mean advisers should pursue the technology now when the trend won't manifest itself for years?
In reading through our list, it's hard to decide which trends would be worth pursuing. And regardless of which are the ones to follow, some advisers will avoid the risk of being an early adopter. Others — given the average age of advisers in the industry — will simply retire before the trend takes full force.
In all cases, however, before thinking about how to manage a change efficiently, the adviser or firm must decide whether a trend is the right thing to embrace.
Pursuing a Trend Efficiently
Once an adviser decides to pursue a trend, the question of efficiency comes next. Efficiency translates into doing something the right way. And that means developing a plan. But financial planners are sometimes poor at planning for changes in their own businesses.
Remember when our elementary school teachers taught us to make an outline before writing a report? Children are still taught to do that, but the look and feel of outlines have changed dramatically.
For example, mind mapping, which came about in the 1970s, unhinges our brain from the need to simultaneously think creatively and chronologically. The result is better organization in terms of the major points to cover and the minor points that support them. A variation of the mind-mapping approach is to use stickies to jot down single concepts, as well as their supporting details, before organizing the stickies into the sequence in which they need to be tackled.
Of course, technology-based versions of the mind-mapping and stickies techniques exist, though they are not necessarily better, especially for group-based project planning within your firm. But whether one uses a manual or a technology-based version, a documented plan is what allows a project to be implemented with efficiency.
It's easy to be overwhelmed by everything going on around us. In fact, it's enough to make an adviser stick his or her head in the sand and ignore everything! That's not a good idea. Instead, decide on the right trend or trends to pursue first. Then design a clear project plan for how the trend or trends will be implemented in your firm. Peter Drucker would call that doing the right things the right way. That translates into efficient adaption to industry trends!
Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network.