6 Tenured advisors must remain engaged. Our society cannot afford to lose the collective wisdom of such a significant portion of those who serve it. As Boomers redefine this new phase of life, Boomer Advisors have the chance to redefine what it means to to be in that role. Like their clients who now have the opportunity to focus on the non material aspects of life, it is hard to not be excited for tenured advisors and their ability to be the ones who help their clients in new expanded ways. When you have accumulated all the “stuff” you can, you are freed to explore the other areas of life. What could possibly be more rewarding than finding meaning in your own life by helping others find meaning in theirs?
Hortz: Why do you see these 6 challenges as inter-related and creating a combined impact that can only effectively be addressed by creating "a solution system" that solves all six challenges simultaneously?
Trigleth: Our world does not operate in a linear way. Everything physical and social is influenced by the interconnectivity and interdependencies of all the pieces and parts. Complexity Theory seeks to understand and at some point explain and then predict the emergence of “next” in dynamic systems. When we parse out discrete elements in complex systems, like the world of a Financial Advisor, and try to resolve something in a vacuum, it is rarely effective. However, when you can cluster big trends and influencing variables, and think about their collective impact, you can also identify a few actions that when combined, can overcome the systemic nature of the collective challenges. In our case, we see 3 abilities that Advisors can bolt onto their existing capabilities and meet the six challenges effectively.
Hortz: What are those 3 abilities needed? Can you walk us through each of these capabilities and why they are so important in converting threats into opportunities?
Trigleth: Certainly!
1. Behavioral Coaching activities are critical in redefining the value of the advisor. Behavioral Coaching activities provide the capability to connect and help everyone. They are human centric, regardless of age, gender, or ethnicity and they create the bridge from the old value promise to a new one. These activities need to be studied, understood, practiced and provided in ways that are recognized as valuable. Several studies have tried to identify the economic value of providing support and mitigating poor behaviors (like buying high and selling low). But there is so much more value available if one attains the skills required to provide solid behavioral coaching. However, those who do not go through formal training in these skills run the risk of doing more harm than good.
2. Innovation and Business Modeling are the tools of today’s most successful and forward thinking companies. Most of our industry was not formally trained in these areas. Unless you graduated from Business School in the last 7 years, you probably were not even exposed to these at the university. But there are over 5 million people around the world who have downloaded and used simple business modeling tools to create new products, services and improved processes. 4 years ago a search of the Financial services lexicon rarely mentioned the word innovation, now you cannot escape it. Innovation and Business modeling create the path to avoid being swept way by the waves of change.
3. Leveraging technology is the third ability. As Advisors play catch up to the world of their clients, they will recognize that in order to match their clients’ preferences for consuming services, technology, they will have to deliver them at the scale required to offset the pricing pressure shoving margins on investment management to a few basis points. But it will be technology that also creates significant opportunity to bring a different kinds of value to create competitive advantage.
Hortz: You also prescribe that advisors need to change their business orientation from an internal one to an external view. Can you explain the needs and practical outcomes in changing to this perspective?
I mentioned the age of consumerism earlier. Some call it the age of personalization. Either way, people expect to get what they want, the way they want it, when they want it. Industries outside our own are setting whole new expectations for what constitutes a great client experience. Now add to this these industries are using “Design Thinking” to create product and service sets that are aligned with the specific jobs clients are trying to accomplish, reducing the pains and capturing the gains they long for. This is much different than how most advisors approach their offer, which is, “here is what I do, now let’s go find as many people as I can to sell it to”. Well in our industry many Advisors have not even done a rudimentary segmentation of their book. And even when they do this, it is focused on the benefit to the Advisor not the consumer. Great companies and sophisticated industries did that type of segmentation back in the 50’s. It is amazing that consultants in our industry are still plying the idea of crafting a single client experience for a practice, the market is way beyond that. Current technology is capable of delivering hundreds of different client experiences, but Advisors are not thinking about how to do that. They are barely making the move to codify and deliver one kind of experience. Advisors need to be thinking about building platforms that clients can then personalize. The best example is to take a room full of people, and have them compare their smartphone home screens. None will look alike, yet they are all on 1 or 2 platforms. The platform (technology) is what creates the ability to allow personalization while still creating profit at the level of each user.