What is your business going to look like in 2030? If you asked taxi drivers or small hotel owners that same question 10 or 15 years ago, they probably wouldn’t have talked about a better client experience, using an app to make reservations, immediate client review or lower costs. They probably wouldn’t have discussed a personal approach that combines technology (like a phone) with simplicity and transparency.
Retailers probably would gushed about better store traffic, valets at their malls and ways to keep customers in the newest styles. Who knew that a 90s internet bookseller would grow to dominate online shopping and begin the revolution of e-commerce where consumers can purchase almost anything from their phone, tablet, etc.
As I’ve said, the consumer has been empowered by technology and convenience to see a more personalized and uniquely customized experience. Technology has emboldened consumers to realize they can get services on their terms and not what is dictated by the store or product owner. The consumer is looking for transparency around fees and service. Uber, Airbnb, Amazon and the like have disrupted business because they focused on the customer experience.
Got your attention?
So let’s look at the advice business. I see a dramatic change on the way. In 10 short years, your clients, and what they expect from you, will be dramatically different. To me, whether or not you remain their advisor in 2030 depends entirely on what you are doing now to better align your services with what they truly value. To create that value, with scale, specialization will be mandatory.
Just last week, in association with the Financial Planning Association (FPA), we launched a follow up to our October paper, “Advisory Firms in 2030: The innovation imperative,” where we made the case that most advisory firms:
- Haven’t truly differentiated themselves or their businesses meaningfully
- Don’t segment their clients other than by account size
- Aren’t thinking about how client habits and preferences have changed or how their services should adapt
- Are too caught up in today to plan for the future
Our new paper, Advisory Firms in 2030: Growth by specialization, also in association with FPA, looks at more progressive firms that are streamlining their practices to focus on specific niches. These five firms do not rely on geographic boundaries – their clients are all over the country. They go beyond investments in their marketing and servicing. By focusing on their niches, it allows them anticipate issues for their clients and deal with unmet, unrealized needs that a client might have.
Since our publication last week, I’m thrilled that it has seemed to strike a chord with many readers and reporters. From the press we’ve seen:
- Think advisor: Smaller firms must specialize if they want to grow
- CNBC: Financial advisors must find their ‘niche’ to survive over next 5 to 10 years
- Financial Advisor: Why Advisor Specialists Will Win the Day In Future
- Wealth Professional: Why niche-targeted practices are set to come out ahead
Let me hear from you
I invite you to download the new paper and let me know what you think. I’ve even started my own hashtag on Twitter: #GrowthThroughSpecialization to highlight comments and articles. I would love to hear your thoughts too. Share with us specialization or what is your firm is doing to innovate for the needs of the changing consumer.
Neither Financial Planning Association nor the firms mentioned herein is associated with SEI or its subsidiaries.
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