Growth-minded advisors embrace a tech-driven, borderless future

March 4, 2021

When advisors reflect on their experience in the tumultuous and sometimes chaotic year of 2020, they use words like "flexible" and "adaptable." But they're not just describing the past.

Many hard-learned lessons from last year are helping advisors rethink both their own practices and the shape of the profession as they look ahead to grow their business in a year that might bring an end to the COVID era, out will by no means signify a return to the way things were.

That's because, like it or not, some of the technologies and new ways of conducting business that advisors adopted last year might have been born of necessity, but turned out to be surprisingly effective and now figure prominently in many advisors' plans for growing their practice in 2021.

"At this point most folks, even though we're sick and tired of Zoom meetings, would agree it's a terrific way to do ongoing financial planning and support of clients," says Evelyn Zohlen, president of Inspired Financial, an RIA in Huntington Beach, California. "They will never replace in-person meetings, but I think we've all been surprised at how much you can do."

The borderless advisor
Christine Gaze, an advisor consultant, describes an "elite" advisor she works with who spends a lot of time presenting before investment committees at endowments and other institutions. Typically, those meetings take the form of eight to 15 people sitting around a horseshoe-shaped conference table, where the physical layout can make it hard for the presenter to take the measure of the reactions around the room. The gallery view of a video conference is quite different.

"His observation, which I think is terrific, when you've got the Brady Bunch in front of you and you can see in one consolidated view all of the decision makers and influencers, you can observe the body language of everyone," says Gaze, president of Purpose Consulting Group.

But that advisor had even more important insight, from a growth perspective. The imperative of in-person meetings led to many of his clients being clustered in major cities like New York, Los Angeles or San Francisco. But after the experience of months of effective video-conference meetings, "he's learned that he doesn't need to be confined at all by a geography," Gaze says.

The revelation for this advisor and others like him is that they are “borderless,” Gaze says. "Now he might not shy away from an opportunity in Omaha."

Higher premium on flexibility
Advisors entered 2021 with an industry on the rise.

Research firm Cerulli Associates reports that the independent RIA channel enjoyed a five-year compound annual growth rate of 10.4% from 2014 through 2019, while the hybrid channel grew by 12.2% in that period. Analysts don't see that trend slowing as those figures are updated to reflect the year of the coronavirus.

Cerulli senior analyst Marina Shtyrkov expects this growth to continue, and notes her firm projects that independent and hybrid RIAs will account for 30.2% of retail assets under management by 2024.

Shtyrkov says that "flexibility is the undercurrent that pulls advisors toward independence," and after the experience of the pandemic "advisors are likely to only place a higher premium on flexibility."

"Some advisors may always favor working in a branch office, but others will look for more flexible arrangements that enhance work-life balance, geographic mobility and autonomy," she says.

Indeed, the experience of video conferencing has conditioned many advisors to think more broadly — nationally, or even internationally — for both prospective clients and hiring.

With that has come an invigorated focus on new channels of digital marketing, content like educational videos, blog posts or interviews that can be widely shared as advisors come to embrace what Gaze describes as a "one-to-many approach," in some cases moving away from the more traditional "block and tackling" of reaching out to one prospect or client at a time.

One advisor Gaze works with "took the down time of COVID" and developed an eight-week online educational course geared for women going through a divorce, essentially distilling the wisdom she had been imparting to clients on a one-to-one basis in a digital format where its reach is limitless.

No more barriers
Industry experts say that that type of online content will be critical for advisors to drive growth, particularly as clients — like consumers of all stripes — increasingly engage in the digital realm.

"If you're adopting these new methodologies to communicate your value proposition, you're actually exponentially growing your potential market," says Craig Butler, chief growth officer at tru Independence, an advisor service provider. "Those barriers around geography are now eliminated."

The same goes for hiring, Butler argues. The experience of successful all-remote work may have convinced some firms that they no longer need to confine their search for new advisors or support staff to their immediate area. That could go a long way toward helping small firms expand their potential talent pool and rethink their hiring prospects, enabling them to move beyond the mindset where "we would never think of someone working for our little boutique that's three states away," Butler says.

Likewise, any advisor who works with multi-generational families or likes to include outside experts in their client meetings can attest to the challenges of getting everyone together for an in-person meeting.

"One of the most difficult things for advisors to do is family meetings with clients," says David Patchen, senior vice president of education and practice management at Raymond James' private client group. "It's a logistical nightmare."

But those meetings are "nearly seamless in the virtual world," he says.

The relative ease of virtual meetings has left advisors like Zohlen with more time on their hands, freeing them up to focus on expanding their work with existing clients, prospecting for new ones, or focusing on business-development initiatives.

Many advisors have seized on that opportunity to expand their work with clients' children or grandchildren, a high-touch approach that can engender greater loyalty and win referrals.

‘People just want to talk’
Advisors are also increasingly inviting outside experts to make presentations about estate planning, philanthropy and other topics that might be beyond their own expertise, but of great interest to the client. Some take it even further, urging advisors to embrace an expansive approach to serving their clients' needs, which, if 2020 proved anything, stretch well behind their portfolios and retirement plans.

"Touch on things that go outside the financial world," says Doug Sandler, head of global strategy at Riverfront Investment Group, an RIA based in Richmond, Virginia. "Bring in a doctor to talk about precautionary things you can do during COVID, or bring in a psychologist to talk about the news cycle."

For some advisors, those outside experts — divorce attorneys, estate attorneys, accountants — are critical for growing their practices. But at a time when the networking events that provide opportunities to mingle with those so-called centers of influence are on hold, it's been easy to lose touch.

"For me, in this environment, I felt that one of my best prospecting ideas has really been engaging these referral sources and checking in with them," says Jennifer Garcia, an advisor with Wells Fargo in Encino, California.

She's put a structure to it — checking in with a few centers of influence a week, and making sure that she's in contact with each professional in her orbit at least once a month.

Garcia also treats them like clients, she says, so they're on her birthday list, and she'll send them gifts for holidays or family milestones. The personal and persistent contact counts for a lot.

"That's been extremely, extremely beneficial. In this environment, I think people just want to talk," Garcia says. "It's so easy to just not do."

‘Hitting it out of the park’
That sense of people wanting more than ever to connect is not lost on Raymond James. There, while advisors continue to rely heavily on video conferencing, a growing number of practices have been cautiously resuming in-person meetings, according to Patchen.

"People are lonely," he says. "They want connection."

The fact that other professionals that clients work with are generally still all operating remotely helps Raymond James stand out. Patchen estimates that maybe 30% of teams at Raymond James have resumed in-person meetings. Often that has entailed retrofitting offices with couches and recliners in what Patchen describes as a "big living-room environment." The firm has developed training materials to help advisors reopen safely and in a way that makes clients feel comfortable, but has seen incredible success in those efforts despite clients' assurances that they love the convenience of virtual meetings.

"Sometimes the customer doesn't know what they really want," Patchen says, adding that Raymond James is working to promote more face-to-face meetings throughout the firm by "trying to connect the advisors doing more in-person with others that are thinking about that."

"The referrals coming in from these in-person meetings now are in many cases higher than they've ever been," he says. "That chunk of advisors that are doing in-person are hitting it out of the park."