Start by considering your growth path options and how you can add more to your current value proposition.
The advisers I coach who are growing rapidly are winning new business (and retaining existing clients) by doing more to enhance the client experience.
Integrated technology helps deliver the substantive pieces of their firm — comprehensive planning and more avenues of communication — while also adding ease and sizzle that enrich client-facing deliverables. Your value needs to be more robust today, and it will need to be even more impressive tomorrow.
So where do you begin when looking to take that first step? It all starts with considering your growth path options and where you can add more to your current value proposition. In speaking with advisers of every shape and size over the last few years, an action plan for growth usually comes down to three primary options:
1. Business as usual with a side of more work.
You continue doing what you always have, knowing you'll have to work harder to make the same and possibly even less money. The lifestyle practice can survive in the foreseeable future. Competent advisers who want to practice their trade can still be a big part of this profession and deliver needed services to clients, but without scale advisers in this position will likely have to work longer just to remain competitive. You may end up delivering more, but it will come at the expense of your time and margins.
2. Build it, invest in growth and they will come.
You get bigger, fix the holes in and/or enhance your current value offering, and plow profits back into the business. The main areas of investment will be in technology and human capital. Your margins will be less in the short term because these investments simply allow you to stay relevant. Margins in the longer term may expand some, but not back to current levels. Although your slice of pie may be smaller, your pie will be bigger, so you not only survive, but thrive.
3. Buy it, partner with an aggregator and they will come.
You decide to align with a consolidator. Every single adviser I coach is getting calls from these consolidators to explore a possible fit. My response is, “Talk with them!” Culture and value propositions differ among these firms, so choosing the right partner is crucial. However, the competent adviser very likely can find a consolidator that solves the current challenges and melds well culturally. It's my belief that many advisers will have great success by aligning themselves with this type of consolidator. It allows many advisers to focus their skills on what they do best, which is connecting with clients and prospects. Buying it versus building it can position and focus your firm for strong future growth.
Margin compression has already begun, and fee compression is likely on its way. Consolidation is in the second (maybe third) inning of the game and has become an open conversation. That also means there are still a lot of innings to play. So as advisers witness this changing environment, they need to first determine a path to take.
Throughout all of this commotion and evolution, my role as a coach remains the same. My vision is to help advisers live theirs, no matter what that vision may be. What has changed is that I first have to help advisers figure out which path is going to best allow them to achieve that vision. I need to help them match their skills with the model that best utilizes them. Regardless of the pace of change that is to come, advisers from all walks of life need an answer to the question: “What growth path fulfills the vision I have for my firm, my team and my clients?”
Greg Opitz is senior executive business coach at Peak Advisor Alliance.
