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5 Ways to Future-Proof your Financial Advisory Practice

Anand Sheth
July 8, 2020

The future’s arrived early for many advisors. The recent pandemic has thrown advisory practices in at the deep end when it comes to virtual working. It’s also served to  highlight workflow lags. 

Financial advisors now, more than ever, need to ensure that their business processes and systems are agile and productivity-boosting. Failure to innovate could spell failure. In this post we’ll look at some ways to ensure your business succeeds well into the future.

1. Focus on the right niches

Specialists always trump generalists and this is as true today as it’s ever been. When people search for an advisor they go online and use specific terms depending on the kind of advisor they require e.g. retirement planner, pensions advisors etc. If you simply advertise yourself as a ‘financial advisor’ you won’t get picked up - you’ll get lost in the ‘white noise’.

To ensure your business’ longevity, find a niche and decide only to work with that group of people. 

There are many ways to identify a niche. You can segment based on education, financial goals, values, career, age, demographics, and interests. 

2. Consider targeting a younger demographic

To ensure the future growth of your company targeting a younger generation could be a good idea. Millennials, for example, will certainly be more and more in need of good financial advice over the coming years.

Bear in mind they will have  different pain points and a different outlook than those of previous generations. For example, they may be burdened with student loan debts or take a more ethical stance towards investing. 

Younger people are also likely to be technically-minded - and they will expect you to be too. They’ll demand seamless communication both digitally and in person. If you’re lost in the past they’ll move on and work with someone more dynamic. 

One way to reach out to Millennials is to ask your current clients about their children and grandchildren. Maybe offer to do a quick evaluation of their financial situation - as well as remind them it’s never too early to start planning for the future.

3. You can’t ignore the rise of the robo-advisors

You can’t afford to be complacent when it comes to robo-advisors. There are an increasing number of them out there.

However on the plus side there are still plenty of people in need of your full service offering, including wealthier individuals.

To attract and retain these types of clients you need to stand out with your superior service and attention to detail. It pays to remember that the #1 reason clients let go of an advisor isn’t performance - it’s poor communication.

Let prospective clients know they’re important to you by returning their calls immediately. When you meet let them get to know you as a person to build empathy and trust. Use open-ended questions to draw out their goals, then instill them with confidence that you can help them achieve them.

Once the meeting’s over send them a customized report along with your recommendations. The sooner you can send them a follow-up email the better. This will keep both your personality and your advice top of mind and will illustrate your professionalism.

And that’s something a robo-advisor can’t do.

4. Have a succession plan

It’s only natural that your clients and prospects will want to know what will happen to their money should something happen to you. So it’s surprising how few advisors address this issue. 

Think about how you want your business to look in the future. Maybe you have a junior partner waiting in the wings, to take over things when you retire? Or a family member? You may wish to work part-time in the future but hand over the reins for some of the time. 

By having a succession plan you’re also ensuring your hard work will not go to waste. If you’ve spent years building a successful practice you’ll want to know it’s in safe hands further down the line. 

If you’re a one-man business it’s harder to develop a plan - but recent studies reveal that advisors with succession plans tend to be more successful. Having a plan shows you care about your clients and their well-being - even when you aren’t around. 

5. Invest in the right financial advisor automation

To survive in this increasingly digital world you need to improve your productivity by using automation. You need to invest in solutions that support personalization, keep you compliant, and enable you to provide a better service to your clients. 

Low advisor productivity has long been a challenge. There are so many manual operations involved in running a practice, and a historic lack of integration of key workflow processes. Too much time is spent on back-office tasks. A study by Capgemini and PWC revealed that 29% of an advisor’s time is spent doing administrative tasks. 

As the report noted

“Client information is being rewritten multiple times with client specific data to be manually consolidated from different systems. Client reports are inconsistent firm-wide with a different look and feel.”

In 2009 when this report was commissioned gaps in workflow processes were noted. Fast forward to today, and advisors are still not operating efficiently. In order to boost productivity integrate data across all your systems - from your CRM, and planning tools and across all other functionalities. Look out for new software solutions to help you minimize the manual workload.

To stay competitive, increase market share and build better client relationships advisors need to future proof their business. This includes having a clear business strategy and finding a niche, as well as identifying and automating inefficient workflows. 

In such a rapidly-changing environment,  it’s a case of ‘now or never’ when it comes to creating your business of the future. So there’s no time to delay. 

Pulse360 software can help eliminate manual documentation processes and future-proof your business. 

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