Advisors need to focus on building an enduring business, said Mark Tibergien, the CEO of Pershing Advisor Solutions, because, in a constantly changing, environment of increased regulatory attention, lower margins, talent shortages, and lower market returns, things can change in an instant.
“Most advisors [are] looking at their desk instead of looking at the horizon,” Tibergien said during an interview at the 2012 Pershing Insite conference in Hollywood, Fla..
Tibergien said that he likes to ask advisors, “How old will you be in 10 years?” Then, he sees their hearts skip a beat. He follows up with “What do you want to be doing? What does your business look like? Who will be in your business? Who will be leading your business? Who will your clients be?”
He cautions advisors that ten years will go by in a snap. By thinking ten years down the road, whether you are 25 or 65, there is definitely an element of soul searching, Tibergien says.
Advisors need to begin by planning better for their own futures, he said.
Tibergien said that his technique when working with advisors is to not give them answers of how to reach their goals, but instead to ask helpful question to provoke thought. “There needs to be an element of self-discovery that comes with critical thinking,” he said.
Tibergien said that he doesn’t like the phrase “best practices” because every advisory firm is different and the phrase assumes every advisor has the same strategy. Rather, Tibergien said advisors need to create a customized plan.
“What if you are going to ‘goal island’? You can take a kayak, a row boat, a sailboat or a motor boat,” he said. “The motorboat needs fuel and an engine, the sailboat needs wind, and a kayak needs the right body strength.”
Just like the boats, which require different thinking and preparation, advisors need to do customized planning, he said.
The build an enduring business, Tibergien said advisors need consistent profitably (“ It cannot just be in the short term, it needs long-term consistency,” he said,) transferable value (“People talk about multiples when selling a practice, but it comes down to does the prospective buyer see the asset as truly transferable,” he asked,) multi generation appeal (“The world won’t come to end when the last baby boomer dies,” he said.)
Tibergien said there are a lot of headwind creating adversity for advisors. The main question become, how will advisors navigate.
“There is Dodd–Frank, SRO and fiduciary standard, and throw in a little cost basis,” he said. “These changes don’t add value to the clients. They don’t allow [the advisor] to focus on higher impact activities. You have to ask the question, ‘Do you have the right pole in place to manage it?’”
Another head wind advisors face is a talent shortage in an industry where the median is 50 (57 for principals.). Tibergien suggested that advisors create a laddered portfolio for staff members, staggering their ages.
Tibergien warned that the industry is not attracting enough people. He said advisors should answer, “How do you position yourself as an employer of choice?” Advisors have to create compelling growth opportunities to attract top talent.
From a tail winds perspective, Tibergien said it is going to be very important for advisors to focus on women and the next generation of clients.
“Women don’t feel they are being respected,” he said. “Boomers are not an enduring business.”
Mike Byrnes founded Byrnes Consulting. Read more at
