Building a resilient advisory business for the post-pandemic world

Is the advisory industry capable of continuing the transformation that began during the pandemic in order to shape its next phase?

In a year that was like no other, we all learned that we are more resilient and more adaptable than we ever imagined.

Advisory firms demonstrated remarkable agility in the way they pivoted their business operations, client communications and use of digital tools to continue serving clients without disruptions in an all-remote environment. As volatility took hold of the markets, the value of fiduciary advice became even more pronounced, helping advisers drive growth in an incredibly difficult year.

How firms move forward from here will be critical to their future success and will separate leaders from the rest.

A digital-first approach to business development is the way forward. In every conversation we have with firms, business growth rises to the top of the list as the biggest challenge. This is no surprise. For over a decade a majority of RIA firms relied on market performance as a driver of business growth. The extreme market volatility experienced at the height of the pandemic underscored the perils of this reliance.

A virtual environment effectively rendered traditional, in-person forms of business development obsolete. It also broke down geographical boundaries, opening up new opportunities for business growth and talent acquisition — making it possible for every firm to become a national firm, all the while intensifying competition.

To succeed in this environment, firms need to get comfortable with an omnichannel approach to growing business, where personal and digital interactions complement and reinforce each other. They need to acquire a new level of proficiency in leveraging digital, social and mobile channels to target, nurture and convert prospects. They must be able to deploy the latest digital capabilities, such as e-signature, that are now nonnegotiables in virtual client onboarding. They need to be able to put their personal touch on virtual interactions by employing creative communications approaches to help foster client trust, engagement and loyalty.

A tech-forward mindset is no longer cutting edge; it’s table stakes. Investing in technology is now a business imperative. We all need to face the fact that the world that we live in has changed forever. No one will be going back to the old ways of doing business. Firms will be looking to reduce their real estate footprint and take a fresh look at their workers by segmenting them into groups: those who need to be in the office most or all the time, those who can have a flex schedule and those who can be remote most of the time.

This new, hybrid approach to workforce planning will require ongoing investments in new collaboration technologies and better coordination among teams, but also investments in technologies. Investments in resiliency, cybersecurity, data analytics, automation and artificial intelligence will help optimize work distribution, realize greater efficiencies and deliver better value to clients, as well as identify, manage and mitigate risks.

Experience is everything — now more than ever. In a remote-first environment, every touch point with clients and prospects assumes new meaning. While technology is the underlying platform that facilitates interactions, the human touch is still what makes them unique and memorable. Firms need to make every client interaction count, organize teams around clients and effectively match skills to client needs.

They need to employ technology not only to make the client experience frictionless but also to anticipate client needs. Further, they must equip all client-facing teams with new skills to help blend the use of technology with a personalized experience, focusing on clients’ overall — not just financial — well-being. We increasingly see experience (on- and off-line) as a core pillar of advisers’ value proposition and a key factor in driving business growth.

Culture and values matter: The global pandemic exposed and deepened existing social and racial disparities in our communities. A generation of future clients and employees is holding governments, businesses and those in power accountable and demanding change. Increasingly, firms will need to define their role in effecting change and demonstrate how they are contributing to a more diverse, inclusive and equitable culture — both inside and outside their organizations. We see across the industry the emergence of new commitments and new programs to help advance this goal, which will become increasingly integral to success.

2020 proved we are capable of more than we realize in the face of adversity. Now comes the hard part. Are we capable of continuing the transformation to shape the next phase of the advisory profession? I think we are up to the task.

[More: Better together? Why not all advisory teams are meant to go independent]

Ben Harrison is head of Advisor Solutions at BNY Mellon’s Pershing.