Another con is that when data isjudged as positive, it’s easy for an advisory firm to become complacent. A firmthat is 100% data-driven can easily takethe “if it ain’t broke, don’t fix it” mentality that has caused many businesses tomiss out on the innovation and disruption that ultimately displaces them.
But as with any investment, we knowthat past performance does not indicate future results. We know that todaydoesn’t fully tell us what’s going to happen tomorrow. Using data to analyzeyour firm’s strengths and weaknessesis no different than how you use data toinform the investments you select forclient portfolios.
In the end, it all comes down to howwell you can interpret what you’re seeing so you can make decisions that willresonate in the future. On its own, datacan’t do that. It needs something more.It needs your imagination to set it freeand make it useful.
UNLOCKING DATA TO TRANSFORM
Data can’t help you envision how yourfirm can be better or different, but itmight point you in the right direction,especially if you have the imagination tointerpret your data correctly.
A good example is the sales process.Imagine that you’re reviewing dataabout your sales performance: Yourclose ratio is 90%. On the surface, thatnumber is great — you likely wouldn’tthink that you might have any salesproblems at all. But that data tells youonly what has happened in the past.
It doesn’t tell you how your business could change if you could closeclients faster. Nor does it provide insightinto how to maintain a high close ratiowhile also improving your accessibilityto prospective clients and improving thehuman connection you make with them.
The only way you can truly improve
your business through data is if you
have the courage to look at the numbers,
and then ask yourself what you can do
to improve them, even when times are
good. From there, you have to take the
initiative to make decisions about how
to change the status quo.
Many advisors may not feel a pull todisrupt their businesses because theysee financial advice as a moat that automation and technology can’t cross. OftenI hear while consulting that “robots cannot learn to give advice” — and “teachhumans to trust it” — and “financialadvice will never truly be disrupted.”The same could be said for other professional service industries like accountingor law.
But what if it were true? What ifhumans did start to trust robot-givenadvice? The next industry disruptionmay not be far away.
USING INNOVATION AS THE
Before Apple introduced the iPhone and
changed cellphones forever, telecom-
munications could have been consid-
ered a relatively mature industry. But
Apple not only entered the space with a
better product, it also radically changed
the behavior and expectations of the
people who used cellphones.
Did anyone see or prove with datathat kind of shift taking place before ithappened? Microsoft, much to its owndetriment, famously laughed off theintroduction of the iPhone.
Financial advice is a stable andmaturing profession at present, but thatdoesn’t mean it will stay that way. Datacan’t tell you how to make clients feelmore connected to you, but it can showthe results of your decisions to improvethose connections.
Instead of being a data-driven firm,be data-informed and innovation-driven. Ask how you can be more trustworthy, more empathetic and more relevantin your clients’ lives.
If you can successfully answer thosequestions, and monitor your progressusing some data, your firm can stayahead of the status quo and be a disruptor rather than the soon disrupted.
Angie Herbers is an independent consultant tothe advisory industry. She can be reached at
Instead of being a data-driven firm, be
data-informed and innovation-driven.
Ask how you can be more trustworthy,
more empathetic and more relevant in
your clients’ lives.