changeWe all have things we love about the wealth management business and I’ve written about them here.  This post is allowing me to vent and I hope it’s going to help you remember some things you wish you could change in your firm.  Or, I’m hoping you’ll consider thinking about changing.

If you agree or disagree, please let me know what you think.

Too many firms sound exactly alike.

If I close my eyes and have you read your me your value statement on your website it’s going to sound like almost every other wealth management firm in the world.  The truth is too many firms just don’t think about what really differentiates themselves from their brethren.

In fact, I find that almost every firm does have something that makes them different.  The problem is that it’s really hard work to figure this out and it’s work that most wealth management firms really don’t want to do.

Don’t have your firm be commoditized.  Figure out what makes you different.

Owners don’t take actions to create sustainable value.

There are two things that create sustainable value in any business, not just the wealth management business.  The first is a recurring revenue stream. Something this industry has in spades.

The second is a real challenge.  That’s creating a business where you become irrelevant in the day-to-day operations.  Too many wealth management firm owners tell me that it’s not possible for them to get out of the way.  I challenge you to think about how you’re wrong with this assumption and then do some experiments to see how you can become operationally irrelevant in your firm.

Owners allow consulting organizations to over value their business.

I get involved in conversations regularly about what firm’s are worth.  Like most business owners you over value your firm.  The problem with this is you’re also going to hold a lot of paper if you decide to sell.  When you over value your firm, you are increasing the odds that you’re never going to be paid what you finance after the deal closes.  I’ve written about this a lot.  You can read more on this topic by clicking here.

Too many wealth management firms don’t focus on target markets.

You could also say wealth management firms refuse to develop niche markets and say no to everyone else.  I’ve written an awful lot about the issue of how niche firms out perform those which try to be all things to all people.

I can promise you one thing.  Your market is way too big for you to service, no matter how small you make it.  You really don’t have to take every client that walks in the door.  The faster you are able to say “you don’t fit” to potential clients, the more valuable your firm becomes.

Too many practices never become businesses.

I know you got into the wealth management world because you wanted to practice financial planning.  I also know that you have become an accidental business owner.  This doesn’t give you a pass on not learning how successfully runs a business.

It’s not just about practice management, it’s not just about bringing new clients on board and it’s certainly not just about how much you gather in AUM.  There is an art and science in running a sustainable business.  You should do yourself a favor and learn what that is.

We make things too complicated for our clients.

My experience with wealth managers is they’re a really smart group of people.  We also gravitate towards the technical side of the business.

If you pay really close attention to your clients when you start to get technical you might see their eyes glaze over.  This means you’re being too complicated.  It also means your clients are probably starting to feel dumb.  You don’t want to make your clients feel dumb do you?  Then simplify your processes.  Your clients will thank you for this.

We act like we know what’s best for our clients.

This is probably my biggest pet peeve.  This also is not just something that exists in the wealth management world.  It seems to exist in almost every part of the advice business.

It goes something like this:  If only my clients would listen to my advice then everything would be good for them.  The only problem is that our clients have their own needs and motivations.  It’s our job to find the core reason they believe what they believe and then help them achieve their outcomes.  It’s all about our clients and not about us.  I wish more people in our industry actually believed this.

Still this is a really great business.

After all my whining you might think that I’m down on the wealth management business.  That couldn’t further from the truth.

I love this business and think it’s probably the best business in the country right now.  It could be even better if we all paid attention to these 7 things and worked to make them just a little better.

What do you think?  Are you willing to at least think about these issues, choose one work to make it better?

BTW, we have a Linked In Group that you might enjoy discussing this issues in.  To join, click here and you’ll get a chance to see what we’re up to.


Topics: Sustainable Business, target market, Opinion, business creation

Posts by Tag

See all

Subscribe Here!