Four themes from this year’s Advisor Summit

What happens when you bring together over 200 elite advisory firms, sprinkle in investment, technology, practice management experts, and top it off with Mark Tibergien?

You get the 2022 SEI Advisor Summit.

I’m a practice management junkie, so I was like a kid in a candy store at the summit. I left with a bag full of notes, a head full of new ideas, and an inbox full of new connections. As I sort through it all, I’d like to offer you the key practice management themes and actionable takeaways from this year’s Advisor Summit.

Theme 1: We truly are better together: community as an accelerator

While much of the summit was more passive observation than active discussion, it is clear that time with your peers is well spent. We kicked off the event with an advisor roundtable session. I haven’t heard a room so loud since I last braved leaving my house on New Year’s Eve. The feedback was clear: advisors value spending time together, especially in person.

What does this mean for you and your practice?

If you are not part of an advisor community, study group, or other form of peer sharing, it's time to get out and make some new friends. At SEI, we have four formal communities: RIAs, women advisors, operations, and growth. We come together throughout the year to talk, listen, and learn together.

Pro tip: There is etiquette to being a good community member:

• Be willing to share. You get what you give.
• Come with an open mind and ears. If you're doing all the talking, you're missing the point.
• Leave your ego at the door. It will only get in the way.

Theme 2: Know thy business

Leave it to Mark Tibergien to provide a masterclass on how to think and act like a business owner. He reminded us that value is a function of the future. Our ability to grow, serve the next generation of investors, and manage our business through good and hard times supports our firms in generating ongoing meaningful value.

Tibergien shared his signature profitability formula and emphasized the importance of understanding your gross and net profit margins. Look closely wherever you may have issues in your business.

If gross profits are low or declining:

You may have an issue with:

• Pricing
• Productivity
• Client mix
• Service mix

If net profits are low or declining:

You may have an issue with:

• Insufficient volume
• Cost/expenses aren't right

Pro tip: With markets (and likely revenue) down and uncertainty high, the days of easy revenue and record high profitability are gone. To navigate the future gracefully, understand and manage key business metrics such as profitability, revenue per staff, and drivers of gross and net profit margins. Using benchmark data such as the InvestmentNews Study¹ can help you understand how you’re doing.  

Theme 3: People and process: set apart the best from the rest

Investing in and making the most of your firm’s human capital through a strong operational infrastructure (processes, integrations, and workflows) came up over and over again. It was clear from advisor panels that when it came to investments in 2023, people, process, and technology are top of mind.

SEI is proud to sponsor the "2022 InvestmentNews Benchmark Study: Advisory Compensation & Staffing and Pricing & Profitability,"¹ which echoes these sentiments.

The hot questions were:

1. Where should we find candidates?
2. How much will you pay them?

While I didn’t hear any easy-button answers, there was a consensus about the process of hiring; it's well worth outsourcing for big ticket hires such as service advisors and senior operational roles. And you'd better be ready to pay for talent.

Mr. Tibergien reminded us that early talent can come from many places, including the over 300 college programs with a financial planning program or focus on career changes. He also encourages employers to treat candidates like prospects and highlight how you plan to provide development and career pathing opportunities.     

Pro tip: Process can help you make the most of your people investment. We have two toolkits in the Growth Lab to help: Scale with Operations and Scale with Technology.

Theme 4: The right partnerships can set you free

Traditional conference booths were replaced with interactive kiosks in the Summit Experience Center. Attendees were able to demo technologies and services from SEI and our strategic partners in real-time. While no advisory business is alike, it was clear they all had one thing in common—there was a strong interest in finding the right partners to gain capacity and efficiency, and to deliver value to their clients.

The biggest takeaway: Many attendees didn’t know about new features, functions, and integrations with their existing tech partners. I guess that’s what three years apart does!

Pro tip: If it’s been a while since you connected with our technology partners, you may have missed what’s new and how they can help with your specific ops questions. Make the most of your tech investment with annual or biennial check-ins. Conferences can be an efficient way to meet a bunch of partners at once. There have been a number of new technologies and features rolled out on SEI’s platform. Ask your business development representative what’s new. 

As you head into the tail end of 2022, I hope these themes get you thinking about where you’re going and how you’re going to get there.

Sources:

1. "2022 InvestmentNews Adviser Benchmarking Study" (fee required to view report), InvestmentNews, investmentnews.com.