Covid-19 has prompted all of us to make adjustments to our lifestyle and daily routine – whether it’s how and where we work, how we balance work and life, how we interact with friends and family, or how we safeguard our family’s health and well-being.
Advisors, likewise, have had to make changes to how they manage their practice and support their clients in this challenging time. Many are viewing technology in a different light – and discovering how it can help them interact with people in new ways, run their business more effectively and enhance the value they provide their clients.
The severe market contraction in February and March served as a wake-up call for many advisors. Fortunately, the powerful market recovery that began in late March has helped to contain any negative revenue impact for most advisory practices. Still, the sharp market downturn serves as a vivid reminder that revenue and valuations can drop suddenly – and there’s no guarantee the next downturn will see such a quick reversal.
The implication for advisors is clear: Don’t wait for the next crisis or market slump to think about the future of your practice. Be proactive in assessing what you and your business need to prosper in any market scenario.
Four keys to achieving your vision under any circumstances
Based on countless discussions I’ve had over the years with advisors, industry leaders and service providers, I urge advisors to consider four key takeaways to help them achieve their vision for their practice.
- 1. Don’t try to go it alone. Position yourself and your practice for maximum impact by partnering or collaborating with others who share your values. If you’re an advisor at a broker-dealer weighing whether to launch an RIA, decide if you want to build an independent business from the ground up (with all responsibilities associated with running your own business) or partner with a firm or network that can provide resources to enhance your practice while lightening the burden of entrepreneurship. If you’re an RIA who cherishes your independence but also values interacting with other independent advisors, consider the benefits of joining an RIA with an established advisor network.
- 2. Invest in technology to drive growth. The financial services industry has experienced incredible technology-enabled innovation over the past two decades, and RIAs who prioritized technology investments have seen impressive business growth. With technology continuing to advance at a mind-boggling pace, it’s essential for advisors to invest in technology to drive growth. Yet integrating technology into an evolving business strategy requires time, focus and expertise – and can be overwhelming with so many options and configurations available. Again, rather than trying to figure it all out on your own, work with trusted partners who can help you deploy technology solutions to enhance the efficiency, profitability and growth of your practice.
- 3. Get the word out, build your brand. Having a strong, well-respected brand is key to growing your business. Your brand distinguishes you from other advisors and helps people understand who you are, what you stand for and how you can help them achieve their goals. But effective brands don’t just happen; they need to be developed, nurtured and communicated over time. Particularly in the current environment, with limited opportunities for in-person meetings, it’s important to actively tell your story and convey your value proposition using a variety of marketing, communications and public relations tactics. While advancing the strength of their own unique brands, TAN advisors also are able to leverage the reputation and impact of the Thrivent and TAN brands, as well as our relationships with many of the most respected brands in the financial services industry. In addition, having access to the insights and expertise of these industry leaders helps our advisors to elevate their credibility and ultimately drive their business forward.
- 4. Secure your legacy. Make sure you have a well-defined succession plan for your business that will allow you to maximize the value you pass on to your family and future generations. This is particularly important for advisors planning to transition within the next several years. When I ask advisors if they have a succession plan, most are quick to say yes. On further discussion, however, it often turns out they actually have a loosely defined “plan” or one that resides mostly in their head, rather than a carefully considered and well-documented plan. That’s a mistake. If you have, or intend to create, significant value in your business, you need a formal succession plan – one that takes into account all scenarios for transitioning your business, as well as access to financing or a capital partner to help execute your plan. You’ll also find that having a technology-enabled business strategy will make it easier to execute a succession.
At TAN, we help our affiliated advisors work through these and other priorities to figure out what makes sense for their unique practice and how we can help them create enduring value for their clients and take their business to the next level. We offer a best-of-both-worlds hybrid RIA business model that combines the independence of an RIA with the resources, expertise and community of a leading advisor network.
Advisors’ essential role with Covid-19
Clearly, Covid-19 has presented a host of new challenges and opportunities for advisors. Since the pandemic, many TAN advisors have told me how beneficial it’s been to be part of a caring and collaborative community of peers who are dealing with the same challenges they’re facing. They’ve found it reassuring to be able to call on their colleagues to talk about issues and share ideas, and they’re grateful to have the resources and expertise of TAN to draw on during these trying times as well.
Advisors are on the front lines helping their clients make sound financial decisions during this tumultuous period, and we at TAN are proud to support them. While it’s impossible to know what the future will bring, I’m optimistic that a vaccine or other effective solutions for dealing with the coronavirus will emerge soon, allowing people around the world to return to at least a semblance of normalcy.
Meanwhile, TAN will continue to track market changes, invest in new technologies and adapt business processes to allow advisors to work effectively in whatever environment they face. By anticipating change and adapting quickly to it, we’ll continue to empower our advisors to help their clients achieve better financial outcomes and create ripple effects of generosity in the world.