Page 42 - Investment Advisor May 2021

Another con is that when data is
judged as positive, it’s easy for an advi-
sory firm to become complacent. A firm
that is 100% data-driven can easily take
the “if it ain’t broke, don’t fix it” mental-
ity that has caused many businesses to
miss out on the innovation and disrup-
tion that ultimately displaces them.
But as with any investment, we know
that past performance does not indi-
cate future results. We know that today
doesn’t fully tell us what’s going to hap-
pen tomorrow. Using data to analyze
your firm’s strengths and weaknesses
is no different than how you use data to
inform the investments you select for
client portfolios. Instead of being a data-driven firm, be
In the end, it all comes down to how
well you can interpret what you’re see- data-informed and innovation-driven.
ing so you can make decisions that will
resonate in the future. On its own, data Ask how you can be more trustworthy,
can’t do that. It needs something more.
It needs your imagination to set it free more empathetic and more relevant in
and make it useful.
your clients’ lives.
UNLOCKING DATA TO TRANSFORM
YOUR BUSINESS initiative to make decisions about how people who used cellphones.
Data can’t help you envision how your to change the status quo. Did anyone see or prove with data
firm can be better or different, but it Many advisors may not feel a pull to that kind of shift taking place before it
might point you in the right direction, disrupt their businesses because they happened? Microsoft, much to its own
especially if you have the imagination to see financial advice as a moat that auto- detriment, famously laughed off the
interpret your data correctly. mation and technology can’t cross. Often introduction of the iPhone.
A good example is the sales process. I hear while consulting that “robots can- Financial advice is a stable and
Imagine that you’re reviewing data not learn to give advice” — and “teach maturing profession at present, but that
about your sales performance: Your humans to trust it” — and “financial doesn’t mean it will stay that way. Data
close ratio is 90%. On the surface, that advice will never truly be disrupted.” can’t tell you how to make clients feel
number is great — you likely wouldn’t The same could be said for other profes- more connected to you, but it can show
think that you might have any sales sional service industries like accounting the results of your decisions to improve
problems at all. But that data tells you or law. those connections.
only what has happened in the past. But what if it were true? What if Instead of being a data-driven firm,
It doesn’t tell you how your busi- humans did start to trust robot-given be data-informed and innovation-driv-
ness could change if you could close advice? The next industry disruption en. Ask how you can be more trustwor-
clients faster. Nor does it provide insight may not be far away. thy, more empathetic and more relevant
into how to maintain a high close ratio in your clients’ lives.
while also improving your accessibility USING INNOVATION AS THE If you can successfully answer those
to prospective clients and improving the COMPETITIVE ADVANTAGE questions, and monitor your progress
human connection you make with them. Before Apple introduced the iPhone and using some data, your firm can stay
The only way you can truly improve changed cellphones forever, telecom- ahead of the status quo and be a disrup-
your business through data is if you munications could have been consid- tor rather than the soon disrupted.
have the courage to look at the numbers, ered a relatively mature industry. But
and then ask yourself what you can do Apple not only entered the space with a Angie Herbers is an independent consultant to
to improve them, even when times are better product, it also radically changed the advisory industry. She can be reached at Adobe Stock
good. From there, you have to take the the behavior and expectations of the [email protected].

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