Anticipating Change in Your Business

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Nothing is predictable—in life, the financial markets or our industry—except, of course, change itself. Let’s explore a few somewhat predictable events that tend to bring change, for better or for worse, to advisers’ practices.

“Man, Woman, Birth, Death, Infinity”
If you recognize that quote, you’re probably in your 60s and remember the popular TV show Ben Casey. The series opened with the elder professor teaching his physician protégés about the path of human existence. From the birth of a child through adulthood, procreation, health issues and ultimately death, the trajectory of life is fairly predictable.

Whether they happen to you or a family member, colleague, employee, client or friend, these life events can have an impact on your business. For example, the birth of a child may prompt a young employee to quit work or ask for paternity leave. The 60-year-old adviser may take time off when her first grandchild is born, while the 40-year-old might buckle down and focus more than ever in anticipation of college expenses ahead. When you think about it, the path of human existence is constantly affecting your practice in some way, shape or form.

Leases, Partnerships, Growth, Industry Evolution
You haven’t heard that list on any TV show, but these factors also lead to change at regular intervals throughout the life cycle of a financial advisory business.

  • The end of a lease. I’ve noticed that a lease coming up for renewal can be a crossroads for many advisers. For one, it may present an opportunity to buy the office building; another may see it as a chance to gain space for targeted growth over the long term. One adviser will simply renew the current lease, while another may take the opportunity to minimize office expenses.
  • A shift in a partnership. Partnerships evolve, too. As one partner experiences change due to personal factors such as those mentioned above, it can be like shifting tectonic plates in the partnership. Say one adviser has a health scare and the more reticent partner takes the helm of running the business. The emotional dynamic caused by the shift is palpable. At such junctures, lifelong relationships between colleagues can unravel or thrive.
  • Business growth. Whether an adviser’s success is due to skill, geography, luck, inheritance, passion, the market or other factors, at some point, it becomes clear which firms are consistently growing and which level off. In either case, inertia kicks in; the business in motion tends to stay in motion.
  • An evolving industry. Like individuals, industries are born, change and pass away. Time will tell how long the financial advisory and planning industry endures. Advisers who joined the profession 40 years ago, 20 years ago and today will face very different circumstances to which they must adapt.

What Changes Will Your Practice Confront?
Change is constant and often predictable. But it’s easier to see that when you’re looking in the rearview mirror—just ask any adviser in the second half of his or her career. For those still in the early stages, it’s worth keeping an eye out for all the predictable changes down the road. As the saying goes, we don’t get hit by the things we see coming!

Joni Youngwirth_2014 for webJoni Youngwirth
Managing Principal of Practice Management

Commonwealth Financial Network
Waltham

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