Page 43 - Investment Advisor - Jan/Feb 2021

THE FAST TRACK

By Angie Herbers

3 Practice Management Trends to Watch in 2021

Some trends started before the COVID-19 pandemic took hold, but the
digital revolution caused by the crisis has sped up their development.

s 2021 begins, many adviso- As advisors have grown dissatisfied
ry firm leaders hope that the with all-in-one offerings, they’ve also
A new year will bring greater set out to build their own solutions.
opportunities to grow their firms. Of What used to cost millions to develop,
course, there’s nothing magical about now costs much less, making it easier
a new year — the only thing that makes and more accessible for the average firm
changes possible is hard work and to create its own technology based on
other steps taken by leaders with the proprietary client experience (CX) and
vision for how to improve their client digital client experience (DCX).
service and businesses. Firms investing in the creation of
The trends we highlight for our inde- their own technology are winning on
pendent advisor clients are based on both valuations and client growth.
the work we see firms doing that cre- Though not all advisory firms can
ates real change and growth. All firms afford to develop their own all-in-one
may not have the same growth outcome, solution platforms, many can afford
Advisors should but understanding certain trends should to build micro-technologies to service
their clients in unique ways based on
help them move in the right direction.
seek out solutions Here are the three key trends I expect their specialties.
for specific client to see either develop or accelerate in the 2. THE RISE OF THE INDEPENDENT
wealth management industry in 2021:
needs and for 1. THE RISE OF MICRO-TECHNOLOGY BREAKAWAY SERVICE ADVISOR

service specialties We’re already seeing a massive infusion For many years in the independent advi-
sory industry, there’s been talk about the
they offer clients, of micro-technology in the industry. growth of breakaway brokers from the
traditional wirehouse firms. However,
These are small-scale technologies that
like retirement or solve a specific problem. few are talking about the other side of
As more tech companies enter the
tax efficiency. marketplace with mini-solutions that the breakaway equation.
As M&A activity increases, firm val-
advisory firms need, we’ll likely see uations rise and independent firms get
more M&A activity that pulls these piec- bigger, there are more opportunities
es together to better serve advisors. for service advisors working in those
As in years past, the implementation firms to start their own companies.
of technology today is about the integra- They are already fiduciaries working at
tion of advisor systems. For advisors to RIAs. To step out on their own means
fully realize the most efficiency gains, they’ll get to build wealth with their
however, they need to stop believing in own client bases.
an all-in-one solution. Many larger firms have been able to
Instead, they should seek out solu- mitigate the effects of losing talented
tions for specific client needs and for service advisors by focusing on human
service specialties they offer clients, like capital programs, culture development
retirement or tax efficiency. By doing so, and partnership programs. But with rap-
they can find the best and most efficient idly increasing firm valuations and M&A
solution to better service clients. activity, a firm leader can go only so far

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