Money Money Money

 


Lyrics from great songs convey the difficult realities of our life.  Often we don’t immediately realize their message. ABBA wrote many great songs. The one that stuck in my head is Money Money Money. While it wasn’t written for our current environment or for independent advisors many of the messages resonate today. Our blog this week will summarize some of the ABBA lyrics that can help even if you don’t like the group or this song. If ABBA added lyrics for independent wealth management firms they would discuss three essential items. 


New Business Development 

We still need to develop and grow our business, but the operative words are our business.  Since it is our business we need to pay attention to items besides sales.  Our our firm ran a business that supported their objectives.  Those objectives often combined with our clients and our objectives.  The profit conflict required expense reductions and scale.  In our new business we will need to insure that our expenses are optimal but we need to insure that every expense supports our unique business goals.  Unfortunately there are several service providers that offer their scale to independent wealth advisory firms.  Their scale needs to be shared equitably with their clients but unfortunately they can be conflicted too.  The one item that remains sacrosanct is new business.  Most founders are experts but they need to hire a COO that can spend the time needed and possesses the expertise to help grow a stable firm.  This costs money and is a new cost for most.  While new business development is difficult and important, a COO is important too.  The cost of this role will decrease the publicized back of the envelope payments to the founder.  My experience is that the COO is an external hire not someone who is already on your current team.  



Client and Advisor Support 

When the COO and the founders establish their new firm they need to hire or retain great client service professionals.  These professionals will be retrained by the new COO and your custodian.  The new training is important but you can’t train the love your clients have for your client support advisors.  We also need to be trained on how to best manage a great independent wealth advisory firm.  Our old firm hired coaches and high priced consultants.  We need help too but we don’t need McKinsey and their million dollar fee.  


Legal Compliance 

Now we are the boss we need to insure our new firm meets and exceeds the legal requirements of the SEC.  Brian Hamburger has established an expert firm to help. This is an area most new independent advisors realize that they need help and are willing to pay for the help.  Many advisors only dealt with a compliance professional when there was a problem. We need to adjust our opinions because the compliance professional will try and keep us out of regulatory jail. Money well spent. 


ABBA had it right. Now that we are independent we will make more money, but we need to spend money to make this money. 

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