I believe we will see three primary types of professional advisors in the future: The robo/virtual advisor, salaried employees making a decent living, and elite entrepreneurial advisors processing their business through respected firms while making substantial incomes. I am convinced that financial services will remain an industry with strong income-earning potential, but that those who adapt to changes at a glacial pace will be left on the sidelines. We are entering into a Darwinian moment. Those who adapt will survive.
The Winning Edge is a fascinating premise with applications for these changes. In essence, the Winning Edge states that the disparities in the abilities of the best and the rest are often small, though the difference in rewards can be huge.
Let’s use athletic endeavor as an analogy. At a recent US Open golf tournament, the winner Justin Rose collected $1.44 million in prize money. With a four-round total of 281, he earned about $5,124 every time he hit the golf ball. In the same tournament, runners-up Phil Mickelson and Jason Day, carded a four-round total of 283, only two strokes off of winner Justin Rose’s total over 72 holes. Yet Mickelson and Day earned only (funny to have to say that) $696,000 each, or about $2,459 per shot. While Rose earned over twice as much as the second place finishers, was he more than twice as good? Clearly not.
The key quality inherent in professionals with the Winning Edge is entrepreneurship. In other words, they treat their business like a business. Many professional advisors regard an entrepreneur as a maverick, flying by the seat of his or her pants, living month-to-month to keep creditors at bay while trying to ‘close’ the next piece of business. True, a few of those exist, but my image of an entrepreneur, like those described in E-Myth or The Millionaire Next Door, is of the kind who runs his or her business like a well- oiled machine.
In the next five years, your industry will look very different, and more challenging, than it did five years ago. Professionals within every major industry have to understand these changes are constant and coming. We are well along that path now. One of the most important shifts you can make to thrive in the future is to adopt a systems-based approach to your business. This means that every process and activity you and your team execute on a daily basis is planned, scripted, refined and well-documented in a procedures manual.
The primary benefit of a systems-based operating approach is that you gain predictability and efficiency. Think of your business and marketing plan as a road map. Your operating manual serves as your GPS device. Not having this approach would be like walking through uncharted territory at night with only a flashlight for guidance. A good plan, one driven by systems, is like having a beacon five miles off, guiding you forward. It lets you see past short- term obstacles without drifting off-course.
Don’t rely on hired talent. Become more talented by creating a systematic approach that you can hand to someone else to implement. You are truly on the verge of greatness when you have made yourself obsolete, and you are confident that your business would run faultlessly without you being there every day. It’s not only liberating for the professional, it’s rejuvenating, too.
There is much that you can’t control and there is no sense worrying about any of that. Constantly scrutinize and refine the things you can control, especially when it comes to breathing life into your client relationships.
Your clients are your most valuable asset and you can’t be complacent about your relationships with them.
Your clients’ perception of you has been shaped by your rules of engagement and your code of conduct. You have effectively led them into a pattern of either focusing on what you cost and using you as a lightning rod to channel their frustrations or focusing on what you are worth and, in the latter case, the thought of defecting never occurs to them and the thought of endorsing you is always top of mind.