Once again, the TD Ameritrade Institutional National LINC conference had lots of great information to help registered investment advisors and their businesses.
The following 10 pieces of advice can help RIAs in the future:
Be Ready For The Future
Tom Nally, president at TD Ameritrade Institutional, kicked off the first conference with a powerful address to the attendees. He concluded, “Lead with purpose and the future is yours.”
Then a young actress did an amazing job reminding us that the future might just be closer than we think.
Do Not Be Arrogant
Ric Edelman, executive chairman of Edelman Financial Services, sat on a fintech keynote that addressed innovation, and the next generation of financial services. Related to technology advancements, he said, “There is no way we can build it ourselves.”
His most powerful line came when discussing cryptocurrency and future disruption from exponential technologies, as many advisors avoid recommending investments like Bitcoin, simply because they do not understand them. “We need to get past our own arrogance,” stated Edelman.
Think Differently
Tim Hockey, president and CEO of TD Ameritrade talked about the concern of future job loss from technological advancements. He said that this creative disruption is happening, but we are still at just 4.5 percent unemployment.
Looking into the future, he advised, “Retirement is dead. We have to project ages of 110, 120. It will not survive this century.”
We need to be giving clients advice to reflect the future clients are going to have. For those not doing so, Hockey believes it is “criminally negligent.”
Both Hockey and Edelman agree that we are going to have to engage in life-long learning, as just a college degree in the early part of life will not be adequate when the future evolves.
Help Others In Need
Viola Davis is the first black actress to win a Tony, Oscar and Emmy Award, in addition to being the most Academy Award-nominated black actress in history. In her keynote address, she shared stories of how hard of a road it was to get to her success, overcoming racism, poverty and much more.
“Poverty is like a crime you didn’t commit,” said Davis after talking about how difficult her childhood was.
While she has achieved success, there are others that have not been so lucky. “Worthiness is nothing you should have to hustle for,” said Davis.
She reminded the crowd, “Everybody doesn’t start life at the same starting line.”
Take Advantage Of The Critical Trends
Sterling Shea, associate publisher and head of advisory programs at Barron’s, spoke about the huge amounts of money that will be in motion in the coming years.
“We see the gap in the haves and have nots widening,” said Shea.
He added that the advisory business is getting more expensive and complex, so the firms with business models that are scalable will be able to take advantage of the disruption.
One issue advisors need to be aware of is a potential talent shortage. “Advisors are leaving this industry faster than they can be replaced,” said Shea.
The online presence of a firm is also going to be more important. While Shea believes there is no algorithm that is going to replace empathy, the firms that can merge the rich digital front-end experience complimented with trusted holistic services in person will have more success.
“All this is a perfect storm,” said Shea. “What percentage of advisors are going to be able to pivot?”
Improve Sales Abilities
The struggle with learning how to improve at business development to grow in the future is that a lot of the trainers out there seem to be “a combination of Tony Robbins and a Las Vegas magician,” joked David Greene, managing partner of Greene Consulting, in a full day retirement plans workshop.
He said the best people at sales have “purity of intent.” This is the opposite of a car salesmen. Related to their technique, Greene said, “We call it ‘three questions and a pitch.’”
Instead, advisors should have a conversation to help prospects realize their problems.
How do we have conversations to truly get a prospect to stop and think and come to conclusions that they need your services? “People come to conclusions more when they are speaking than when you are,” advised Greene.
He added, “They will actually go through a self-analysis. There is a presumption you have the answer, just because you asked the question.”
“How many times have you watched the food channel and then actually went into the kitchen and made it?” asked Greene.
Advisors should also know how to communicate their value. It should not be a value proposition. Instead it should be “a value promise,” stated Greene.
Build The Right Culture And Team To Engage Clients
John Cashion, corporate director of culture transformation at Ritz-Carlton Leadership Institute, spoke about creating service excellence in a breakout session.
“You can’t teach culture. You have to live it, breath it, every single day,” said Cashion.
‘A lot of companies have culture, but they do not do much with it.” It is just words on paper unless employees do something with it.
At the Ritz, they try to strive to have a warm and sincere greeting, using the guest’s name, anticipation and fulfillment of each guest’s needs, and a fond farewell. Part of the “mystique” of the staff knowing the guest’s name as he or she arrives comes down to the doorman looking at bag tags as they are unloaded out of a car and then saying the name which is captured on a microphone so the front desk can be prepared with the name.
“The most important piece of our culture—the employee promise,” said Cashion.
At the Ritz, they try to hire the top one percent of talent. Cashion, stated “Select for attitude, not skill. Why attitude? I can teach you anything.”
Development is key, starting with a new employee orientation. “Habits are formed in the first 21 days.” Said Cashion. This is ongoing, even after the one-year anniversary celebration. Next, engage employees. At the Ritz they share gold standards of the day and “wow stories” on select days.
He was quite blunt when saying that superstars should be recognized or someone else will do so (and take them away.) On the opposite end of employee performance, he recommends getting those with a bad attitude out of the firm as quickly as possible, as all it takes is one person with a bad attitude to have a client want to leave.
At the Ritz, its employees are empowered to correct client issues with up to $2,000 a day. The Ritz wants its associates to own these “client opportunities.” The five steps are to:
1. Listen
2. Empathize
3. Apologize
4. Resolve
5. Notify
“Kill them with kindness,” said Cashion. “If employees are engaged at an emotional level, they will engage customers in the same way.”
Secure Your Firm’s Future
Vanessa Oligino, director of business performance solutions at TD Ameritrade Institutional, reminded attendees in a breakout session the importance of proactive risk management. She asked, “Are your team members aware of the risks out there?”
Oligino added, “Define, test and adopt policies to prevent risk. Your plans need to evolve. You need to look at them over the course of time.” She gave examples of Hurricane Sandy to losing a key associate.
There are many types of natural disasters that can be very disruptive to a business. That is why TD Ameritrade recommends having a well-documented plan, including having a backup location that is on an entirely different power grid.
Oligino has seen advisory practices be out of power for a long time and unfortunately some teams were not prepared. For example, their people were not trained on how to access the backup systems.
Risks even come from non-employees like vendors. Oligino, stated, “You need to ask them, ‘What is your incident response plan?’”
Advisors should have everything from an employee call tree to a client communication plan in place. “They need to be confident, knowledgeable and ready to execute the plan,” said Oligino.
Think About Future Jobs
Andrew Patterson, senior economist in the Vanguard Investment Strategy Group, spoke about the trends that will define our lifetime. The U.S. and global economies will undergo a dramatic transformation as several technological advances disrupt and impact the work force.
“We are not looking at how jobs are going to be lost. Instead focus on how jobs will change,” said Patterson.
He discussed how job tasks have evolved and will continue to evolve. He mentioned continuing education and focusing on skills like these to keep up with the pace of change: maintaining relationships, interacting with the public, persuading outcomes, applying knowledge, thinking creatively and strategizing.
Be Aware Of And Be Open To The ‘New Economy’
April Rinne, futurist and head of the sharing economy working group at World Economic Forum, spoke about how in just two years the vast majority of adults in the world have mobile phones. For this and other reasons, changes are coming to the new economy that in the past we could not fathom.
She gave an example of the sharing economy and the use of cars. “The average car isn’t used 23 hours a day,” stated Rinne. However, with better resource utilization of cars and other things, it improves economics, the environment and convivence.
“New business models help people save money. They boost sustainability and often build community,” said Rinne.
The new economy will allow us to rethink almost everything!
Mike Byrnes is a national speaker and owner of Byrnes Consulting LLC. His firm provides consulting services to help advisors become even more successful. Need help with business planning, marketing strategy, business development, client service and management effectiveness? Read more at ByrnesConsulting.com and follow @ByrnesConsultin.