The successful pricing of the Focus Financial IPO is a milestone event. Unfortunately the event conjured up an old Wall Street missive in my head – buy on the rumor, sell on the news. How can we use this pithy saying to help us with our independent wealth management practice? We will share our thoughts with you in this week’s blog.
Wealth Management 1.0
The greying of the RIA industry has driven Wealth Management 1.0. When reality hits and older advisors realize they need to monetize their practice they look for buyers. DeVoe and Company tracks these transactions and identifies the major players. This trend still has longer to run but it is closer to the end than the beginning. An iPhone 5 still works but are you thinking about an upgrade?
Wealth Management 2.0
If you are planning on keeping your firm you need to consider the tools you will need to compete going forward. The tools are not cheap but the Bill Good belief that we must continually invest in our firm is a lesson we should all embrace. My experience shows that as we evolve we must embrace, Social Media, our fee schedule and our technology. A blog or a conference will help but an experienced manger to oversee the implementation is also needed. Mark Tibergien threw some cold water on this idea saying he has witnessed that established firms that hire professional managers have a difficult time implanting their advice. Especially if it requires the firm to change their established practices.
The transition to Wealth Management 2.0 will require a guide. Most of the growth in 1.0 was inorganic through corporate transactions and recruiting. Our next stage of growth needs to be organic. Organic growth focusses on growing our current business. That type of growth will require a training professional and an established training program. Sounds expensive. It is but a good training professional should pay for themselves with the organic growth they will lead.
Steve Jobs' genius can help us here. He said don’t build what consumers want today, build what they will need tomorrow. Easier said than done but we need to start working on a 2.0 version ASAP. Nobody will write a step by step solution for you and we know your iPhone 5 still works.