Everyone we talk to these days is eager to find the right combination of investment expertise and high-tech delivery. The rewards for ambition are clear.
Animal spirits are real. After a few months of eerie quiet, people are now coming out of the woodwork to pick their spots in the post-COVID industry.
If you want to get on the map, there’s still time to join the conversation at TAMPS.biz. We’re happy to point you to the right partners.
Some have better technology: systems and tools that automate everything but the human touch.
We’ve all figured out that you can hold a virtual meeting with clients sequestered across town.
Now there’s no structural barrier to building relationships anywhere. If you have the insight and discipline to give clients a value-added experience, you can distribute that expertise around the planet.
In theory, capacity limits have collapsed. You can reach an infinite pool of investors and provide personalized attention to hundreds of clients without having to find and train a lot of human talent.
That’s a good thing. As Michael Kitces revealed in our recent TAMP Summit, we now live in a world where a solo practitioner can run $1 billion across nearly 300 accounts. (Replay available now.)
Do the math on that AUM and extremely rewarding careers are possible. And if you don’t want to spend your days prospecting, a lot of people are now reversing the way information flows to make the world their sales force.
2021: The Year Of The Strategist
A lot of advisors have worked hard to figure out hard-to-understand asset classes: global stocks, small-cap opportunities, hedging strategies, alternatives for the wealthy. It all boils down to ways to squeeze a slightly better risk-return profile out of the efficient frontier.
Once you’ve established that edge, you’ve differentiated the experience you provide. Historically, you could extend the benefits beyond your immediate clientele by creating a mutual fund, SMA or other collective investment product.
Now, someone with specialized market knowledge can simply package the portfolio model with all the rules required to emulate a one-on-one client experience, then open it up to advisors the world over.
Think of it as designing a portfolio like a phone app and then distributing it via the app store. Other professionals will pay a little to “subscribe” on their clients’ behalf.
When it works, the platforms themselves push tens of millions of dollars a month your way. All you do is keep monitoring and improving the models.
This is the road that leads from face-to-face advisory practice to what we’re calling TAMP strategy. In effect, other advisors open up part or all of their AUM to you and these become “your” clients to some degree.
And the relationship can go both ways. Pull in part of another advisor’s expertise when your clients need it, push out what you do best. Everyone gets a better and more efficient experience.
We’ve spent years advocating for the “pull” side. Now it’s time to survey what the most ambitious advisors are in a position to push.
If you’re ready for that, just reach out via TAMPS.biz.
The Only Existential Threat
Of course, if you’d rather just count the months down to retirement, I get that too.
We came closer to complete industry meltdown in February than at any time since the 2008 crash. Few are eager to contemplate fancy maneuvers in that kind of storm.
A lot of people are conserving resources in case the bad weather continues. Others are obsessively "rebranding" to pivot into whatever the new world brings.
But if your firm is so fragile that a sudden bear market lurch translates into the kind of landing you can’t walk away from, you’ll always worry about the weather.
Disruption is part of life. You’re either actively disrupting someone else or you’re constantly on the defensive.
Defense doesn’t score points. If you spent this year focused on retention while strategic growth plans stalled, it’s time to move on.
We know now how much stress a pandemic will place on business relationships. Some were too weak and bent under pressure. Others have demonstrated that they’re robust and resilient enough to withstand a volatile season.
Very few firms actually failed in the COVID storm. There may be a lot of zombies out there and a lot of blood in the water signaling industry sharks, but right now we’re all survivors.
While survival is a solid immediate goal in times of disaster, we know better than most people that risk is usually a matter of statistics and not absolutes.
Survivors can do better or worse depending on whether they retreat from disruption or embrace it as the road to better outcomes.
A lot of relationships were tested this year. Clients whose confidence wavered are now open to exploring alternatives.
They’re your new prospects. Whether you chase them on your own or enlist other advisors to help, some of us have the tools and the ambition to do more than survive.
Settling for survival dramatically lowers the odds that you’ll thrive. That’s the only real existential risk most advisors now face.
What do you do best? What would modern technology help you do better? What role do you want to play in the industry’s post-robo future?
And if you’re already living in that future, TAMPS.biz can help you compete in a world of giants. You don’t need to be a trillion-dollar titan yet. That’s not necessarily where the real innovation is.
Plenty of people have developed better solutions to investors’ everyday needs than the trillion-dollar index fund. All it takes is a fresh nuance in terms of drawdown, discipline or reading the macro environment.
Maybe you’re already giving your clients that nuance. If so, the world is your prospecting field now. Have fun.
