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What a Future Ready Financial Advisor Looks Like

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What a Future Ready Financial Advisor Looks Like

Charles Darwin would love financial advisors today. “In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment”. – Charles Darwin

In October 1838 Charles Darwin thought of a way in which one species could change into another. He noticed that individual members of a species vary. Furthermore all animals are competing with each other to survive. If the environment changed in some way, say if a new, faster predator appeared then any herbivores that could run slightly faster than other members of its species would be more likely to survive and reproduce. Any herbivores that ran slightly slower than most would be more likely to be eaten. Slowly a new, faster herbivore would evolve. This was later called the survival of the fittest. (http://www.localhistories.org/darwin.html)

In the current world of financial advisors there is a storm of change. The three major changes Charles Darwin would observe is regulatory, technology and business models. Not only technology changes but major regulatory change and it is forcing the biggest change we have ever seen in the financial advising business. The biggest change is how advisors business models are changing and evolving. Being on the road and seeing different advisors in different locations I see the changes first hand. Let me explain my observations.

What does a Future ready Financial Advisor look like?

Financial advisors more than ever are adapting change and adjusting their businesses. To be prepared let’s give an example of what a future ready financial advisor looks like. First off picture what this advisors practice will look like in five years. From a technology point of view they will understand what robo advising can do for small clients and embrace robo advising by having their own account to see what their competition delivers. Most advisors I talk to don’t see them as a threat but a possible opportunity. They will have a technology platform that engages clients and they will have a better understanding of social media to service clients not to market to clients. This will be a by-product, not a focus. The future ready advisor will not be ignorant to social media because it is here to stay. A future ready advisor will have a clearly documented value promise converting all aspects of comprehensive planning including: tax, estate, risk management, insurance and investment planning. They will have it in writing so clients can answer three simple yet critical questions. What do I get, what does it cost, and how will you keep me on track? They will be so confident in their script that they would not be afraid to present it on the ABC.com network show “Shark Tank”. Future ready advisors fees are totally transparent and their pricing model will align interest with their most profitable clients creating what Steven Covey would clearly recognize as a win-win scenario . (The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey Simon & Schuster; Anniversary edition (November 19, 2013)

Lifestyle is critical to future success

They will also be future ready, by taking at least 6 to 8 weeks off per year so they can create their ideal lifestyle for themselves. As more than financial advisors, also real life financial coaches, they must lead by example and make sure they are living a balanced life and not be working past capacity, as so many advisors tend to do. They have clearly figured out the three keys to success are number of profitable clients, annual revenue from profitable clients and number of weeks off per year.

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80% of time with ideal clients and ideal prospects

Future ready advisors will spend 80 percent or more of their time finding or working with profitable clients. They realize that taking on non ideal clients only eats into their lifestyle and is not profitable in the long run, even if it means referring them to another advisor. Finally, future ready financial advisors have clarity around their future their lifestyle and ultimately their business value. Future ready advisors run a very valuable business and know what it is worth and continue to find ways to build equity in their business. They will have teams that they work with to service their clients. Comprehensive teams including tax estate risk insurance and wealth management strategic partners. Their pricing model will be innovative and not old school. The client experience with the advisor of the future will be consistent and comprehensive. Advisors of the future will spend their work time on their working passions, which is spending time with profitable clients and building processes to improve their ideal client experience and outcomes. They will be more passionate than average advisors.

Future Ready Financial Advisors focus on the five T’s

Technology, transparency, time off, total revenue per client and transferable value.

Are you ready for the future? How can you be an advisor of the future and get ahead of CRM2 and regulatory changes, technology changes and have a business model of the future.? Ask Charles Darwin about the strongest advisors in our business today. If they do not adapt to change, we know where they will end up.

Future Ready Financial Advisor checklist
 

  • Technology and robo-advisors
  • Regulatory, Transparency and value promise to articulate fees and what clients receive
  • Business model of future. Less clients more value per client
  • Investment Management and processes
  • Collaborative approach and less principal dependency
  • Practice Management Benchmarking and client feedback
  • New ideal client acquisition with annual client segmentation
  • Key client attrition and an ideal client experience process with 10+ touches per year
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