Lessons Learned In 2020 And The Path Forward

“When something bad happens you have three choices. You can either let it define you, let it destroy you, or you can let it strengthen you.” -Theodor Seuss Geisel

I remember it vividly, it shook me. Set me into a weird emotional and mental state for many days. It was one of those days that I won’t likely forget for the rest of my life. It was a day that many people have experienced, but for me it was one of the first. Someone you had watched and felt was invincible, was now no longer here.

In a split second, they were gone. It made me realize how precious and short life is. And now with a new 7-month-old (at that time), it made me realize how precious and special my time with him was.

It was January 26, 2020. The day that Kobe Bryant died in a helicopter crash.

What I didn’t know on that day is I was in for an even greater lesson on how precious life and my time with my family really was.

And on March 11th, sitting in a hotel room in Jacksonville Florida, I get a push notification that the NBA has suspended their season due to COVID-19.

At that moment, I felt things were for real. I booked a flight home first thing the next morning and have yet to step back in the airport since that day.

2020 will be a year that people want to forget but will have an extreme impact on the way we live our lives, love our families and engage in the workplace for the rest of our lives.

So in this year’s edition of lessons learned and the path forward, I take time to look at what I’ve learned personally and professionally in 2020 along with where our industry is headed in 2021 and I make some random predictions. Predictions that if right I will promote as being genius and if wrong, I will never mention again!

Personal Lessons in 2020

I think it is best to start with the personal side of things and build into professional. Start with the emotional side of things!

The biggest lesson that was learned in 2020 was that COVID-19 has forced us all to slow down and simplify our lives. Prior to the pandemic we were all running on empty and running a million miles a minute. We were creating complexity and found ourselves easily focused on the wrong things… myself included. I was traveling a ton and missing the milestones of my little one. I was leaving my wife to be alone. And I wasn’t connecting with my family as deeply I should have been.

And during quarantine and while we watched many families struggle and lose loved ones, it showed us all that we must come back to the equilibrium of what matters most… our family and friends. We were given time to think, engage, talk and ultimately love. We had an ability to talk to friends and family about their struggles and challenges which led us to deepen relationships with those that mean the most. And that has continued as we try to find that new normal.

Going along this trend of slow down and simplify, 2020 was a year that reminded me, in the most impactful way yet, that life is precious. Whether it is the number of lives that have been lost due to the COVID-19 pandemic or the brutality and lives lost that encouraged movements such as Black Lives Matter… life is precious. And it is time for us all to take control and be better people individually. And appreciate what we have and live in the moment.

The definition of being a better person for me has evolved in 2020. It’s not just about growing and learning. It’s more about listening to understand as opposed to listening to respond. We don’t have to all agree, but being a better person is striving to listen, understand different perspectives and ultimately respect differences in opinions or perspectives.

And finally, this year has led me to become an even greater believer in the country we live. Despite the challenges, the protests, a heated election and some people losing faith… I see a lot of opportunity. And I see a country that provides the ability to impact and make the most of that opportunity.

We saw multiple companies create a vaccine, in just 8 months, for a disease that was not known prior to the year starting. The innovations in both science, technology and communication that have advanced over the past 20 years have allowed for us to develop cures and vaccines at literally warp speed.

This is a country of opportunity, innovation and freedom. We are a country that allows each person to make a change, on their own, without having to be told or allowed. For all the challenges that we may face (we will always have challenges), we still have the best opportunity and most freedom to change ourselves and change futures than anywhere in the world.

By simplifying things, this came to light a lot more than ever.

Professional Lessons in 2020

This can be summed up in really three overarching themes:

  • Tough decisions are even tougher when livelihoods outside of yours are at play
  • The VC world is a big boy game
  • Success is about having the right people on the bus

COVID – 19 forced all companies to make extremely tough decisions. And that wasn’t any different for us. March and April were definitely scary times. I learned a lot about myself and how to handle the stress and have the ability to focus on leading our teams.

But for our business, we made a decision to re-focus our entire business and ultimately relaunch our technology, we green fielded it. This led to having to have difficult conversations about roles, salaries and ultimately futures with our business with all our employees. We had to have difficult conversations with our clients as well. Ultimately, it all worked out and will be extremely beneficial for all the employees and clients, but the dread of the conversations, the enormity of the decisions and the impact it could / would have on others lives led to many sleepless nights and stressful days.

And some of these decisions were spurred by our desire to get VC funding and that opportunity being pulled from under us at the last minute. We were close to hitting an 18-month goal of getting venture capital for our business. We had grown, we had the right (at least we thought) business plan and had found the right partners.

But it wasn’t meant to be. It was actually the best thing for our business as it allowed us the opportunity to reset our focus, reset our strategy and we are stronger than ever because of it. But it did show that the game of VC financing is a big boy game. And if you aren’t prepared for it, the game will eat you alive. From that lesson I have reshaped my mentality of how I’d like to build our business and it is still to grow fast, but also to be financed smartly.

And finally, having the right people on the bus allows for tough decisions to be made with confidence. When you don’t have to worry about your people being committed to you and knowing that your people are dedicated to the vision, you can make sweeping changes and everyone is still bought in.

Our team made sacrifices from cutting salaries to basically nothing, to sacrificing time with family and working 90 hour weeks, to skipping PTO in order to push our business and vision forward. As a leader, having the right people on the bus gives you so much motivation and ability to think bigger and be confident in those thoughts.

And the final point I will make about professional accomplishments is the toughest days and toughest moments show the true person. And during these times (hopefully they are few and far between) as a leader, you will be able to identify who you want on your team going forward and who you don’t. It will be crystal clear. Take advantage of those opportunities to really analyze your team.

Wealth Management in 2021

2021 will be a redefining year. 2020 was a year that shook us all and left us rethinking how we do things, why we do things and ultimately what we want to be doing.

And next year will be the year where we are able to take those thoughts, lessons and action plans to implement them. We will be looking to use these lessons to redefine ourselves both as individuals and businesses. And it won’t be any different for financial advisors.

  1. Firms will take the lessons of 2020 to strengthen their core value and delivery to clients

We were forced to handle our clients and meetings and onboarding in different ways. We learned a lot and found out that video conferencing isn’t all that bad. We learned we had to be better at communication with both our staff and clients. So, 2021 will see continued and expanded adoption of internal communications systems like Slack and Teams, along with a more focused effort on establishing expectations with clients as to when video conferencing makes sense and when in-person makes sense. Earlier in the relationship, in-person will make sense. Longer established relationships, video conferencing may be just fine.

  1. We will experience a champagne moment when we get back to the office

The moment the vaccine gets to the masses, offices will open back up in full. And the pent-up demand and excitement to be back in person will bubble over and create a surge in everyone showing up and being at the office. This champagne moment will wean off over the course of the year and by the end of 2021, people will be looking and wanting a balance between the good of remote and the good of in-person.

  1. Companies are going to put an even greater emphasis on culture and employee satisfaction

The pandemic separated the “good” firms from the “great” firms. The “great” firms saw themselves winning tons of praise from their employees about how they handled communication and strategy during the pandemic. Whereas the “good” firms have some employees still slighted a bit in terms of how things were handled. The firms that were “great” will look to build on that and have an opportunity to carry that momentum throughout 2021 to create even more committed and dedicated employees. While the firms that did a “good” job will be forced to make up for that effort. The “good” firms will see higher attrition and it will be a wakeup call to management.

  1. The digitization of our industry will continue evolving at warp speeds

New business and technologies focused on serving the wealth management industry will emerge in 2021. And the desire by leadership teams and management will be elevated to test out new technologies and digital experiences. We will see the adoption of simple things like video conferencing and digital paperwork continue to grow in 2021. But we will also see firms become more open to newer ideas. The word of caution for firms here is to know “why” you are wanting these new tools. What was it during the pandemic that made you believe you needed the solution? And what do you want out of the solution? If you don’t have clarity there, then this is more of a shiny ball effect than an opportunity to really set your firm and client experience apart.

5 Random Predictions for 2021

To wrap things up, I always find it fun to make predictions for 2021. Some of these are bigger and less obvious than others. But they all should have an impact on our industry in some way.

As it goes with every person that makes predictions in our industry, I will only talk about the ones that I got correct and will look to file away the incorrect ones in a place far, far away.

Enjoy these! And be sure to send me some of your predictions for 2021.

  1. RIA channel growth will accelerate. This will be seen from the greatest number of brokers transitioning to RIAs ever seen.
    a. Thoughts: 2020 made brokers see that they can do this on their own.
  2. A separate custody player will emerge to compete with the Big 3
    a. Thoughts: 2020 was about the “Schwabitrade” merger. 2021 will be about a major player wanting to take some market share, in a major way, from Schwab, Fidelity and Pershing.
  3. You will attend an in-person financial conference in the 2nd half of 2021. And attendance will be near record highs.
    a. Thoughts: With a vaccine delivered to the masses in the first half of the year, there will be pent up demand to be in person and seeing our peers. Conferences will back… strong in 2021.
  4. Margins (on average) will contract YoY for financial advisory firms
    a. Thoughts: AUM should go up, but costs of attrition, hiring and new technology will lead to firms seeing margins come down YoY
  5. Robinhood and Betterment will go public
    a. Thoughts: I’m making this prediction harder by having two names, but it’s just time! Venture capitalists want some money back and it seems this is their easiest route.

So, there you have it. From what we learned in 2020 personally and professionally to what our industry will look like next year and sprinkling in some predictions… we are putting a bow on 2020.

Sometimes at year end we look back and wonder where the year went. This year won’t be like that. This year is one you look back and wonder what took so long, let’s go. But don’t let the desire to get to 2021 keep you from taking some really valuable lessons from 2020.

As Theodor Seuss Geisel said, when something bad happens we have three choices. And the one I hope we all choose is to let it strengthen us going forward. Bye 2020. Hello 2021!