Operational efficiency — like your service model, marketing strategy, and investment-management approach — is a cornerstone of your success as an independent financial advisor. And, like so much in our lives these days, all those things are in the throes of rapid change.

This change is a by-product of society’s inexorable march from analog to digital information systems. The instruments of this ground-shaking innovation — from software platforms to cloud computing and machine learning — are constantly evolving, while the ubiquity of connectivity means much of this technology is:

  • Already in your clients’ hands, if inert

  • Fully baked into their service expectations

So how ready are you? Not just for the concept of market changes, but for the reality of it, and in personal as well as professional terms. If you decide you have some work to do on that front, don’t worry. The effort you expend now to get in shape for maximizing your firm’s operational efficiencies will pay off as the intrinsic value of your business grows.

We know the goal of boosting operational efficiency is to lower costs without compromising on service standards and regulatory dictates. With that in mind, we’ll look at some cutting-edge best practices indie advisors might want to consider for sharpening business efficiencies.

Productivity vs. Efficiency: It’s as Much a Mindset as a Business Metric

Ready to swallow the pill? Advisors are notorious for viewing sheer output as a viable metric for effectiveness. And they’re wrong. Productivity measures output; efficiency measures input. But doing more of something counterproductive doesn’t equal an effective result.

Let’s look a little deeper. In one Chalice survey, 67% of participating advisors chose “increasing revenue and profits” as their number-one business priority. Other options included “standing out from the competition,” “buying, selling or merging their businesses,” “exceeding client expectations,” “managing operations that don’t contribute (directly) to revenue,” and more. Growing revenue and profits comes down to increasing the efficiency of each of these components. In other words, although advisors may know clearly what they want for their businesses overall, many aren’t getting granular enough about the role of — and the “fix” for — each business component.

Heightened M&A Activity Means It Can Pay to Be Receptive

Mergers and acquisitions are at all-time-highs in terms of deal volume and deal value, and have been for a while. Firms are pairing up, and as a result getting stronger, more resilient and better able to adapt. Using the same service providers, contractors or staffers — say, for functions like HR and marketing — these pairings can make substantial headway in trimming overhead.

The M&A boom means there are firms out there right now looking to partner with other firms of all shapes and sizes. Chances are, some of these seekers would be a match for your firm and your plans for its future.

Motivated Employees Are the Result of a Healthy and Open Culture

Workplace friction can arise from time to time in the happiest firms. But as owner, you can keep such strife at bay by establishing a strong and cohesive company culture, with emphasis on open and cheerful communication. Hire the right people, and if they aren’t playing nicely together, don’t hesitate to address it.

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