What do you do if you’re the owner of a financial planning business and your gut tells you that your business needs to change, but there’s no hard evidence – it’s just a hunch?
Worse still, what if you’re that owner but you’ve got business partners who just don’t share your view? They’re happy with the status quo.
Or what if you’re the future successor in a similar position, desperately trying to convince the current owner of the business of the need to innovate to stay relevant?
This issue is widespread, so if you’re affected I want to assure you you’re not alone.
In a Harvard Business Review article, Persuade Your Company to Change Before It’s Too Late by Pontus Siren, Scott Anthony and Utsav Bhatt, the authors explain that there’s a paradox facing leaders who are seeking to transform their organisations.
Often, leaders want convincing data to make the case for change. However, by the time public data proves their case, the window of opportunity for grabbing a march on the market has shrunk or disappeared completely.
And if you leave things too long by taking a “wait and see” approach you can find you and your business on the proverbial ‘burning platform’ with very limited options for manoeuvre if you want to survive and prosper.
The market is already moving
In my white paper of November 2021, What Next For Financial Planning In The UK?, I explored the issue of how businesses and industries get disrupted.
It’s clear to me that there are a lot of moves already being made that have the potential to pull the rug out from underneath the financial planning community.
The next generations of potential customers are not interested in consuming financial planning in the way that we currently offer it and almost none of the best financial planning firms are responding to the threat in a meaningful way.
Because they’re doing really well.
So what’s the problem?
As I discovered in my research for the white paper, Clayton Christensen, author of The Innovator’s Dilemma, stated that for the businesses he studied that were eventually disrupted, the last 3 years of their lives were all record years in terms of profitability – then bam, gone!
That’s a scary observation. Good times are no guarantee that you’re sitting pretty.
In my opinion when the demographics that have driven the financial planning boom end, and that’s not far off, financial planning as we know it will be under huge pressure. Not because it’s bad, but simply because new innovative offerings will meet client needs in a range of financial areas without the huge expense.
Your mission: should you choose to accept it
Innovative advisers, fintech players and new entrants to our market are already jockeying for position and creating new offerings that have the potential to re-shape how next generation clients are served. If you’re expecting to secure those clients as they age and move into the pre-retirement space, you could end up disappointed.
Many of the new offerings are what I’ll call Cyborg advice models (stealing the phrase from Bob Veres, publisher of Inside Information). That is, they’re blending some interesting technology with some access to a human adviser and creating something completely new, often with a lower cost of delivery.
If you’re a business that intends to still be trading and serving clients profitably over the next 10 or 15 years then making your own moves now is vital.
Can small, owner-operated financial planning firms compete with the well funded larger players?
But you’ve got to be open to the issues coming your way.
In my webinar, I’ll show you some strategies that will alow you to compete effectively in the new world. If anyone can be reacting and listening to customers needs its the best and brightest advisers in the financial planning space, as long as you can let go of defending the status quo.
Let me finish with a powerful example of where you have done this in the past.
I arrived in the UK in April 2004. What I discovered was a small collection of firms that were embracing the ‘new’ financial planning model. I know financial planning in the UK started earlier than that, but by 2004 it was still a relatively small cohort of believers.
What did the rest of the industry think about this new approach?
Let me be blunt. They thought you were f***ing nuts.
In 2006 the FCA commenced their Retail Distribution Review (RDR) and implemented it in 2012.
Who was laughing then?
For financial planners, RDR was a non-issue. They were already running client-centric businesses. The rest of the market who’d resisted the change were dragged kicking and screaming into the 21st century.
Being early to the financial planning party was a competitive advantage and set you up for almost two decades of success and market leadership.
Don’t let your success keep you stuck.
Can you be first to move again to a new way of doing business?
Let me know how you go.
Uncover Your Business Potential
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