What I’ve Seen: Transforming Wealth Management Businesses for the Future

F2 Strategy’s Executives in Residence bring years of high-level experience to our clients and with that comes unique perspectives and powerful insights that wealth management firms can use to make critical decisions. Our “What I’ve Seen” series gives the executives an outlet to share their insights with the industry in three categories: driving change, marketing and sales, or customer-centric business. 

Luke Winskowski speaks to driving change through integration of technology, human-centered advice and strong systems architecture.

In a quest for growing businesses for the future, wealth management firms are eager to deploy rapidly advancing data and AI technology to drive down costs in the business. While much of this is automation of routine operations, some consider efficiencies in delivery professional advice. While tempting to think of this as a ‘replace’; this thinking is often a trap and needs to be considered more of an ‘integration’ to bring advice to life.

We can’t just build a BOT and give everyone what they need. If that were true, the proliferation and democratization of information over the past two decades would have led to great decision making on behalf of people around their money – and the data would not support this has happened.

We also would imagine that people who are properly trained in this industry would use that information to create all kinds of value for their clients. But in fact, many advisors find themselves overwhelmed. And finally, organizations too have access to the same glut of information, but they can be bogged down by managerial systems, hierarchy and legacy data architecture. In the face of this complexity, we see a natural instinct is to solve the problems with a single tool or program, but rarely does this solve the whole system problem.

To succeed, businesses must integrate, manage differently, and engage their teams. Leaders today can’t just be a tech leader, a corporate leader, or a leader of advisors, they must understand how all areas come together if they want to transform their businesses for the future. For those working in long-established organizations, this will require new approaches.

Lead with an Integrated Approach

Leaders of the future need to operate at the confluence of technology, human-centered advice, and great systems platforms architecture to make progress. This can be difficult when working with legacy processes and systems, so to get there, begin by asking two key questions.

  1. What drives my organization from the ways that our people behave to how they make decisions? For example, the financial services industry is very goal driven at every level. Evaluate what is measured and how that sets the tone for what is important. This may mean looking at what you’re incentivizing your team and making sure it matches the systems you want your clients to use.
  2. How have I organized my business to deliver value? Organizations become trapped and limited by their own hierarchical structure. People at the top do certain things, and so on down the chain. Only when you get to the bottom of the chain do you get to the actual interaction with the clients you're trying to serve. Think about flattening the hierarchy and creating the expectation that people at every level need to have an understanding and appreciation of the customer journey. It requires more than just telling people, build it into how you manage them and express their job profiles and performance expectations.

With these answers in hand, you can move on to shaping how you pull these ideas together and then identify the right tool that will help you gain traction, rather than jumping into selecting a tool straightaway without a clear sense of purpose.

Understand the Difference between True Innovation and Best Practices

Leaders need to clearly understand the difference between efforts that innovate and efforts that pursue an existing best practice – and manage these differences. In other words, when planning your technology investments, clearly delineate between the things that exist today that demand a level of excellence and the things that you want to create differentiated value around that don't really exist today. Making errors on implementation of technology that is expected can be costly for your brand or lead to inefficient technology spend. Knowing what you are doing when planning your technology upgrades will help you structure your efforts appropriately.

Have the Courage to Solicit Feedback and Bring the Team Along on the Journey 

Transforming a business means you must have the courage to ask your advisors and front-line employees what they think about what you are trying to do and if it's making an impact. Advisors are often vocal about their pain points and it takes some strength to allow yourself to be in a focus group that might humble you and your ideas. What you’ll often find in the process is that advisors want the tools that make their day-to-day easier.

At the same time, understand that advisors might not see the whole picture. As you celebrate checking another box, they might feel like the whole system is broken. They aren’t seeing the incremental steps and successes. Having spokespeople in your organization is a nice first tactic. Get some of your top people to create a rhythm around championing progress. Encourage them to share how the things that have changed for them and demonstrate how they are using the new tools. 

You can also identify a few influencers in your advisor population and give them concierge training and handholding on the new tools, because they're typically going to set the tone when they go to a conference or a gathering. Rather than say, “oh, this corporate junk is crap,” they might say, “this really changed my outlook on stuff. They're really doing some cool stuff.”

Develop a Strategy to Put it All Together

Putting these high-level concepts into practice can be daunting. Working with a knowledgeable and experienced partner can help you build out a strategy that works for your organization’s specific situation, ensuring a higher probability of success.

Need support marrying your tech stack with your organizational goals? Get in touch for expert support.

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