40 INVESTMENT ADVISOR JUNE 2020 | ThinkAdvisor.com
4. Client service is assertive and
3. Peer groups are cutting out the
middleman in mergers and acquisitions.
Our survey uncovered that advisors get
their information and advice about the
current, changing situation from two
primary sources: written articles and
peer groups. Of those two, we’ve found
that peer groups have gained the most
“mindshare,” or influence, in recent
years compared to the last time we faced
a nationwide crisis in 2008. However,
written articles were overwhelmingly
cited as the information source that
advisors turn to for information about
industry and financial market trends.
The information source we found of
most interest is the rise in peer groups
regarding M&A transactions. Not unlike
2008, our survey data revealed that M&A
discussions are continuing and growing,
only those discussions are happening
leader-to-leader rather than through con-
sultants, matchmakers and/or M&A firms.
Not surprising, as in lower profit-
ability environments, financial advisory
firm leaders tend to cut costs where
they feel they can. Going direct to their
peers for potential M&A activity within
their established communities would
seem logical, although can be fraught
with potential risks if the parties are not
properly guided by legal counsel.
Throughout March, most advisory communication did a dramatic shift from afocus on financial planning to a focusmore directly on the markets, as advisors cited they no longer could avoidtalking about it.
“In an environment where the marketsuddenly drops by 20%, avoiding thisdiscussion is not possible,” one advisoryfirm leader stated during the study.
At the same time, most communicationhas gone fully digital, with firms puttingmore emphasis on being more direct intheir communications via email. In otherwords, they’re using shorter and morefrequent communications with clients.
There was also a rise in video commu-
nications, although with some skepticism
regarding how the communication would
be viewed by compliance authorities.
Communications became more personal and question oriented. For example, emails are more focused, asking“How are you doing?” to make sureclients are safe and healthy.
In addition, they may frame theconversation today from a relationalapproach, such as asking if the client isgetting what they need and/or whetherthere is more an advisory firm could dofor them. In the data, the firm’s onlyintent of these communications is tocheck on clients, not give instructions orinform them about something related totheir financial situation.
A NEW LANDSCAPE?
All these findings taken together showthere is a major overhaul of the independent financial advisory business modeltaking place. As the advantages of many oftoday’s changes become clearer, we doubtthat many business owners will be interested in taking a step backward.
For instance, it’s unlikely that many
clients would want to lose their more
frequent contact, rapid responses,
increased information, market-focused
assertive communications or easy access
to their advisor.
In a world where we want to get“instant help and information,” we’reseeing firms adjust their organizationalstrategies to be more team based andmore quickly meet the needs of today’sclients. And as for advisory firms, we seeworking from home for many or mostemployees to be a possible permanentchange and/or an option for employees.For employees, having more options tobe productive outside of a traditionaloffice environment may be appealing.And for business owners, dramaticallycutting their costs for expensive officespace is a consideration.
Finally, we expect to see a continuedresilience by firm leaders. As we watch thedata continuously evolve, firm leaders aresaying they don’t want help with “leading” but instead want help with understanding how to make business planningmore “responsive” and how to make fasterdecisions and develop quick strategies in arapidly changing environment.
Angie Herbers is an independent consultant tothe advisory industry. She can be reached firstname.lastname@example.org.
There is a major overhaul of the business
model taking place. As the advantages of
today’s changes become clearer, we doubt
whether many business owners will be
interested in taking a step backward.