4 practice management tips to prepare your firm for the future

Williams said when thinking of the demographic shift that is underway, continued growth and the health of your business means having a good mix of clients who are at different stages of their wealth story. 

A firm should have some clients who are in the accumulation stage, and other clients who are in decumulation. 

"So most businesses, the lion's share of their clients are baby boomers, an important market. They hold around two-thirds of the U.S. wealth today. But many of them, that group between the ages of 57 and 75, they're moving into retirement plans. Or they've already retired," she said. "And many of them have a second act even after they've officially retired, but they're entering that decumulation period." 

She added that Gen Xers, a segment sometimes overlooked by multiple industries, is smaller while still controlling $46 trillion of the assets in the U.S. today. 

"When we think about wealth transfer, they're inheriting the money first before the millennials which have sucked the oxygen out of the room in terms of interest and opportunities. They are certainly important for future growth, but they only have $13 trillion in their assets today," Williams said. "So segmentation becomes very important because you accept at face value you have to have a healthy mix so your business is resilient, no matter what happens in the markets."

Speaking about the overlooked, Williams highlighted the service gaps that continue to persist for women in America. In the U.S., household financial assets under women's control will increase from the current $10 trillion to as much as $30 trillion by 2030, according to a 2020 report by McKinsey. 

"They're clearly the next market, but also understanding that they're the least advised, you have 55% of Gen X women without an advisor relationship," Williams said. "Recognizing that they're sandwiched between caring for children at home, and supporting older parents, they really need prioritization in order to maximize their worth."

Kinniry said as your firm works to serve new clients, your firm should be working to reflect its changing client base. It is a task that remains tall for an industry where women and people of color continue to be grossly underrepresented, but Kinniry believes technology is providing support in that effort.

"The time you would spend five years ago or 10 years ago was really (focused) on the numeric —  investments, financial planning, tax-loss harvesting, tax alpha … a lot of that today has been able to be taken on by technology and or outsourced," he said. "You can outsource to ETF model portfolios. You can outsource direct indexing, which really frees up the advisor's time. We're seeing a pretty dramatic shift from competencies of maybe a financial planner or an investment manager, and more towards relationship management. And much more towards practice management because the tools today are there to help the advisor concentrate on the human capital.

"You have your tech stack, but at the top of the tech stack is the human capital stack."

Filling out that human stack starts with vision. Williams said to take the classic practice of asking where you want to be in the next three to five years, but tweak it to consider the kinds of people and personalities you need to achieve your goals.

Also make sure that your future takes their futures into consideration.

"Before you jump to hiring, you need to look at where the capacity issue is … because you want to make sure that (you have a plan) when you bring on a new person and you're investing in a young financial advisor. Or financial planner. Or wealth strategist or investment strategist. Whatever the position is, you need that position. You need those skills," she said. "If there's no future for that individual to grow with the practice, you're not gonna be able to keep them in the seat."

Williams said the accountability and the intentionality in how new people are trained is imperative, but wearing the manager hat is new for many advisory practices. 

"So you have to think about what the plan is for someone's growth and development over the years," she said. "Career pathing could include changing seats or a different role, especially if someone has high potential talent. Maybe they've capped out in the seat that they're sitting in, but they can potentially perform by moving over to the left or to the right."

She also offered up a scouting tip that she urged listeners to use at both Future Proof and other events they go to. 

"If you run into someone in the advice industry that really impresses you, write their name down. Then when you have the need to fill a human capital opportunity on your team, you have a cultivated shortlist of high potential talent that you have hand picked," she said. "Send the job description to them. Even if they're not interested in the role at that time, I bet you they know someone else that might be a good fit."

Kinniry said the technology conversation in wealth management is a complicated one. One that includes both fear and excitement.

"Everyone is most fearful that technology is going to take my job or it's going to compress my margin. And we've been studying this for hundreds of years. And neither of those have happened," he said. "As technology has come 200 years ago, 150 years ago, and so on, it's led to job creation. And it's preserved margins. And so I think the important thing is not to fear it, but to adopt. And employ it as quickly as possible and continue to move up that value chain.

"Those that see it as a threat and may not embrace it are the ones who always get left behind."

With that championing of technology, Williams said she knows that AI has dominated the conversation as of late. No matter what your personal feelings may be on AI, she believes that weaving it into your practice is essential to achieve growth going forward.

"But you do need to understand what the technology does really well that can replace the human, versus where you have to lean in hard to what the human excels at," she said. "So it's human plus bot."