5 Inflection Points for Financial Advisors

5 Inflection Points for Financial Advisors

By Matt Oechsli | @mattoechsli

“A strategic inflection point is a time in the life of business when its fundamentals are about to change. That change can mean opportunity to rise to new heights. But it may just as likely signal the beginning of the end.”

Andy Grove – Only the Paranoid Survive

In your world of financial services, this concept of a “strategic inflection point” is not about one singular event that must be addressed, rather an ongoing challenge. Which is why firms and financial advisors will need to continually innovate and explore new avenues for providing value.

Grove goes on to say these inflection points are essentially “An event that changes the way we think and act.”

The reality is that most people are immune to change – hardwired to resist change – myself included. Which is why businesses who are about to be disrupted by an inflection point are incapable of jumping ahead of the point of inflection. Just think of the taxi business. Yes, inflection points create disruption.

The following are simply a handful of the top disrupters, some of which most of us use.

  • Uber
  • Airbnb
  • Warby Parker
  • Tesla
  • Netflix
  • Amazon
  • Dollar Shave Club

The following are 5 Inflection Points that, if not already, will soon be disrupting how financial advisors go about their business. As I list them, think of jumping ahead, the potential relevance to your business model, and the changes, if any, you can make.

1. Millennials

According to Deloitte, this demographic will soon affirm their status as the new drivers of consumption moving forward.

  • Do you have a NextGen strategy?
  • Veteran financial advisors should think of having a NextGen financial advisor (millennial) on their team who can connect with the children (NextGen) of their affluent clients and develop working relationships with the next generation of CPAs, attorneys, and other young professionals.

2. FinTech 

This is an all-encompassing term for technology in the financial services industry; money transfers, smartphone transactions, online banking, self-directed consumer investing, and much more. These financial activities will continue to expand into consumer-oriented services.

  • Are you current with technology that’s available?
  • If you haven’t already, you should be proactive about making certain your clients are aware of, and if interested, know how to use the technology available to them. Delegating a team member to task of teaching clients how to best use this technology, is a good value add that offer protection from fintech disruption.
  • You also want to know which fintech services, if any, your clients are currently using that are outside your purview.

3. Digital Marketing

Millennials have grown up in a digital world. You have web aggregators, social media, direct sellers, greater connectivity, digital communication, digital branding, and more – all competing for the services you’ve been providing.

  • You should consider knighting someone (millennial) on your team to be responsible for all of your team’s digital marketing. This covers the gamut of online branding, Facebook advertising, content videos, blogs, managing connections, tracking your competition, etc. This role is often handled by the same person who’s managing your NextGen and fintech initiatives.

4. Cybersecurity

This is one of the greatest, if not the greatest, risk factor facing the financial services industry. And your clients are hearing about it constantly.

  • How are you protecting your clients?
  • A great value-add is to conduct a handful of lunch-n-learn workshops for clients and COIs on cybersecurity.

5. Client Mindset

Financial advisors must be able to understand and address their client’s, needs, wants, and fears of today, and be prepared to continually address them in the future. Disruption will be ongoing. This is probably the most important indicator of a financial advisor’s future; using Andy Grove’s projections – rising to new heights or signaling the beginning of the end.

  • Do you really know how your clients feel – what they’re thinking?
  • Make certain that you “emotionally connect” with both spouses of your top tier clients. This is the best protection from the ongoing disruptions in your world of financial services.

Addressing the aforementioned is a basic requirement for rising to new heights. Focus on what you can control, continually assess the financial services playing field, and remember that it’s not one single event that’s going to disrupt financial advisors, rather it’s an ongoing challenge.

Always continue to explore new avenues for adding value.

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