Identifying Trends
To start thinking about how to align organizational structure with strategy, it’s helpful to identify industry shifts and how they may affect different facets of your organization.

Technology. In today’s world, technology allows advisors to meet with a higher percentage of clients via technology-aided reviews. In fact, many report having fewer in-person review meetings. If this emerging trend continues, will there be a need for a full-time receptionist?

Another trend is that while technology systems have made some processes more efficient, they are also becoming increasingly complex. Most advisors can no longer bear the cost of designing even modest systems internally—not to mention assuming the responsibility for the daunting task of ensuring cybersecurity. Will internal technology experts instead become technology trainers? Would all technology-related services eventually be outsourced to strategic business partners?

Products and services. It looks like exchange-traded funds and indexing are here to stay. The commoditization of investment management has also been predicted for some time. How will positions like the paraplanner be affected? On the other hand, what new roles will emerge if advisors begin to emphasize financial planning (rather than investment management) as their centerpiece service? For example, would there be a greater need for risk management specialties if advisors took on the responsibility to position insurance to address clients’ needs?

Growth. Advisors will increasingly be responsible for multiple locations. Again, technology will aid them in the delivery of support services to all locations, but there will be redundancy. Perhaps the “juggler” employee of the past will re-emerge?

Furthermore, these larger organizations will inevitably require greater management sophistication. The “laissez-faire” management style preferred by many advisors is likely not going to cut it in the large ensembles of the future. The cost of hiring a professional manager who formally does what the advisor has “kind of” done for years can be a tough cost to swallow. Nonetheless, I wouldn’t be surprised to see a shift toward more professional managers or managing partners.

Independence. Advisors may see a higher percentage of their ranks shifting to salaried positions and away from the independent contractors who predominate today. How that shift might affect firms’ attractiveness to younger advisors or female advisors is a thought-provoking question.