Not too long ago, an independent broker-dealer asked me to present to a group of wealth management executives at a symposium.
Something compelled me to calculate the cost of the talent in the room. I concluded my one-hour talk multiplied by 150 business leaders in attendance equated to about a month’s work.
With that in mind, I wanted to be certain the value received was commensurate with the precious time invested.
This pushed me to think really hard about the message I wanted to deliver. What was burning inside of me that I just had to get out and shout from the rafters!
In the end, it came down to two simple words – Hurry Up. For at that summit, I concluded the urgency for us to move as an industry was never more critical, and yet, in my role as a consultant, I rarely witness the need for speed.
Urgency is defined as “a pressing necessity”. Not a nice to have or want to have or maybe someday, rather, something critical – a must have.
So why hurry up? Are we a slave to change for change’s sake? I wound back the clock and looked at how as an industry we controlled the pace and type of change. Moving from individual securities to mutual funds, to ETFs to managed assets, mostly resulted from an inside-out approach with little input from consumers. Aren’t we the ones elevating the fiduciary conversation as an example? Does the client really know or care about RIA versus Trust versus brokerage versus hybrid versus. . .
Yet, the times they are a-changin’. Whereas Julius Caesar and Abraham Lincoln lived 2,000 years apart and on different continents, they both could only travel about 20 miles a day on horseback. When Lincoln died, they put his remains onto an iron horse, which traveled at 20 miles per hour. One hundred years after his death, men hurtled through space at speeds in excess of 20,000 miles per hour. For 2,000 years it was pretty much the status quo. We lived in an Agrarian society focused on fiefdoms and farms. Then came the Industrial Revolution. People moved from their farms to cities and new social and economic models prevailed. Once unobtainable items were made available to the everyday man and woman. The buggy whip vanished in the shadows of mass-produced automobiles.
We then evolved into the “Information Age”. We moved from an economy heavily based on manufacturing to one where service and information played a central role. The Internet was invented, computing accelerated and information democratized. No longer do you need me to get a stock quote or research report. This democratization of information affects almost every industry, from health care to DIY projects, as expertise and information are now abundantly available for free.
In his groundbreaking 1970 book Future Shock, Alvin Toffler characterized the change from an Agrarian Society to the Information Age as “Accelerative Thrust”. That is, he predicted things would move so quickly individuals, governments and society at large would not keep up. While using different terminology he foresaw things such as cyber terrorism, identity theft, hacking and a whole host of new challenges associated with the speed of change. He also coined the phrase “information overload” addressing how society and human interaction would change based on the massive amount of information available.
I submit to you we are in a new phase – a Consumer Revolution. Never in the history of man could you get so much of what you wanted, when you want it in such a customized and cost-effective form. Those iconic firms who were in “no hurry” quickly felt the power of the consumer. Gone are Kodak, Borders, Tower Records, and a graveyard full of once-dominant industry leaders, replaced by firms attuned to customer desires.
No matter if you managed the most profitable, Blockbuster with the best location, inventory, employees, etc., when that little red envelope started showing up in mailboxes if you didn’t hurry up, you were toast.
Business disruption and innovation are nothing novel. It is the pace that is new and who is driving the change.
I am a consumer. I shop at Amazon. I buy music from the iTunes store. I take digital photos on my smartphone. I use Yelp, WebMD, Tripadvisor, Kayak and a host of tools that in the past were only available to professionals.
I get enormous push back when I talk about how the pace of changes relates to wealth management. Yet, those red envelopes are being mailed as we speak. No internal expense ETFs, 100 free trades, digital portfolio management (combined with human guidance); the race to zero as many are calling it. Driven by the consumer.
So hurry up and do what?
Find your authentic voice in an overcrowded industry providing little distinction between firms. Remember, nobody gives bad advice or poor service – at least to hear them tell it. Our airline seats are comfortable. Our seats are all leather, have 5 inches of extra legroom and have personal entertainment systems with 120 different options.
Find your niche, put tangible, consistent processes in place distinguishing you from the crowd and use these to create a story resonating with consumers. Oh, and hurry up.