Why Wealth Management Firms Must Shift The Role Of Operations To Stay Ahead

On my Bridging the Gap podcast, we do a segment called “Buy or Sell.” I throw out a statement and ask my guests whether they agree (buy) or disagree (sell) with it. In a recent episode, the statement was: Over the next ten years, your firm’s strategic decisions on technology will have a greater impact on the business than the firm’s investment strategy.

I’m buying that every day and twice on Sunday!

Your firm’s investment philosophy and strategy will always be at the core of the business. It will continue to be a reason that people choose to work with you, and a key to your client relationships.

That’s why your strategy is unlikely to change much over the next decade. Sure, you might tweak things a bit. You could add a few alternative investments to the mix. But a drastic shift in your philosophy probably isn’t in the cards.

Conversely, technology’s role in your firm’s operations will continuously change and evolve in the next decade. Human relationships will always be at the core of our business.  But new tech and other innovations have the potential to completely remake every aspect of a financial advisory firm’s operations. Technological tools will change how we assess and address a client’s financial situation. Our communication and interaction with clients and other members of the financial services ecosystem will also be impacted.

These changes will happen not only because they offer us the opportunity to boost efficiencies, but also because clients expect them. People accustomed to watching movies on their phones, checking their bank balance on an iPad and summoning rideshares with the press of a button aren’t going to be very patient with an industry that doesn’t keep up. They will demand more accessibility and ease in their relationship with a financial advisor.

To stay ahead of that demand curve firms must invest in the right technologies and implement the most useful innovations. We can identify those potential game-changers by documenting all of the processes we employ in our work and studying them to understand how technology might eliminate steps in the process. The true ROI of a successful technology strategy is more time to do what only humans can do – strengthen relationships with existing clients and make connections with prospective clients.

Believe me when I say that effective technology implementation and process innovation will be the hallmark of successful financial firms over the coming decade. And firms that embrace that process today will be well ahead of the outfits that wait and delay. I’m not suggesting you blow your entire CapX budget on new tech before December 31. I’m urging you to start thinking about your business operation at a granular level in terms of how new technology and innovative processes could improve those operations. That you should definitely do before the end of the year.

So, do you agree with my “buy”?  Is your firm exploring and implementing new technologies? If not, what’s the holdup?  Have you begun documenting your processes and looking for tech-driven opportunities for improvement? How’s that going? Let’s start a conversation around this important topic.