When you think of the traditional office space, perhaps a formal conference room and individual cubicles for staff come to mind. But just as in other areas of our industry, times are a changin' when it comes to space planning.
As millennial advisers come of age and wealth transfers to next-gen clients, many offices will likely shift to a less conventional configuration. So, if you find yourself debating the need for either an executive suite or a shared work space, it might help to consider the forces at play — both external and internal — that could influence your long-term office space decisions.
Reading about the financial services industry, you've likely noticed the focus on "mega-changes": fee compression, fee transparency, increased competition, robo-advisers, mergers and acquisitions, the rise of the ensemble, and the influence of readily available ETF options for clients. In more casual conversations, however, advisers have expressed to me that their businesses continue to grow and have not been affected by factors like increased competition. Indeed, many say they have not noticed much change at all — yet. Yet is the keyword here — they haven't noticed any changes yet.
But before signing a lease on a new office space or redesigning a current one, you should think about when these mega-changes may begin to take effect. Is there a tipping point at which transitions you don't notice today become overwhelming factors affecting your firm's profitability tomorrow?
Of course, it's not just the external environment advisers need to think about. You'll also have to evaluate your office space in terms of needs.
These days, more clients are comfortable with telephone reviews or virtual meetings. For older clients, these options may be more appealing than making a trip to your office.
Younger clients, on the other hand, may view the virtual meeting as the norm and actually feel less comfortable with frequent face-to-face meetings. Considering this, the formal conference room is being abandoned by some in favor of a more comfortable living room space within the adviser office.
Staff needs in the office have also evolved. Many employees work from home anywhere from one to several days a week. Part-time employees may be in the office only two or three days. These schedule changes affect the need for dedicated offices. In this light, the shifting from "my space" to open space makes total sense.
Last but not least, advisers may also find themselves switching out of the traditional "work from the office" mode. In fact, a home office in addition to a work office is a very common arrangement.
Some advisers like to work from home on days where they have no client meetings. For others, a long commute makes the home office an attractive option. Finally, some advisers have adopted a lifestyle practice and simply don't work five days a week (or even four).
A time of change
In these changing times, questions regarding quantity and quality of space are becoming more complex. In some ways, you could say that we have reached a moment of truth: Advisers are pondering the future of the industry, the future of their practices and the future of their office space.
To be sure, it is a challenge to weigh the options, and much will depend on your firm's clients. But one certainty is the future will bring a shift in the space a firm needs. My advice? Think twice about that long-term lease!
Joni Youngwirth is managing principal of practice management at Commonwealth Financial Network.