What we can learn from US advice firms
Two BH principals recently returned from working with clients in the US and while they mostly worked in different locations, with different clients, their overall impressions were remarkably consistent.
Here’s what they observed:
Overall, there’s a lot happening in the US Advice industry – wide-ranging societal and demographic changes, regulation, mergers and acquisitions, market volatility… and so it goes.
Sound familiar?
- Attracting and retaining good staff is a challenge
In the States, like Australia, competition for good staff continues relatively unabated and the question that needs to be answered by every employer, whether looking to hire or ‘simply’ retain is, why should I work for you?
While not necessarily new, this challenge has been exacerbated by the increased level of merger/acquisition activity. The success of any merger/acquisition will, in many ways, depend upon the people who are working in the businesses.
Competitive compensation structures are certainly getting firms to first base, and many are offering innovative benefits packages, but to hit a ‘home run’ (ensuring staff remain satisfied and happy), other attributes need to be factored in such as; professional development, opportunities for equity, communication and community for example.
Working From Home is certainly far more entrenched in the US than in Australia, but it seems WFH is here to stay for us Aussies too – the toothpaste is well and truly out of the tube, and while larger institutions strive to enforce a return-to-work policy, it’s much more difficult for smaller businesses where competition is keen.
A few tactics:
- Communication – frequent and meaningful communication with your staff, remains at the top of the list. But, not just about the work stuff, relationship-building and culture-driving conversations are important too. “Well done” and “how’s things?” calls should be an important part of any WFH communication strategy – not just progress to business’ goals and objectives.
- An increasing number of US practices are instigating ‘all in’ team gatherings, which brings together all staff in one place, including those working remotely, to learn, share and get to know each other.
Completing our recently released survey into staff compensation is an easy and effective way to gather market intel on the latest remuneration trends. We will send all participants a free executive summary of our findings as a thank you for your contribution. Link to survey: https://research.businesshealthapp.com.au/index.php/395795?lang=en.
- Maybe AI is the solution, maybe not
As in Aus, the noise around AI continues to dominate US discussion. While some firms have been early adopters (often using off-the-shelf AI tools and AI features added to tools within their current tech stack), others appear to be taking a more cautious approach, for them the jury is still out.
There is no doubt the potential for AI in our industry is very interesting, but at this early stage, unless a firm has plenty of resources and ‘bandwidth’ for new (ad)ventures, it does have the potential to become a distraction – the proverbial rabbit hole.
While functional tasks such as workflow management, risk/compliance management, data search and analysis, file notes and transcription are all high on the priority list, it was interesting to note the latest findings from US investment manager, Natixis (2025 Wealth Industry Survey), revealed the percentage of advisers using or planning to use AI for predictive analytics actually declined slightly.
Finally, don’t let yourself be ‘commoditised’ by tech. The point of difference (and major differentiator) for every adviser is that they are a human being, attempting to help other human beings. Don’t try to automate your role out of existence!
A few tactics:
- The starting point should always be – what do you want a prospective AI solution to do? And why?
- Beware the hype. “What can AI do?” is often answered with “anything and everything”. Those businesses we spend time with who are successful in AI implementation, took one specific task they thought could be improved upon and worked on that specifically. They started slow, got a result, grew confidence and then went on to the next process.
- As the saying goes – measure twice, cut once! Talk to peers and colleagues about their AI experiences, dial into industry discussions to share and learn. In this regard, Iress’ initiative through Advisely (advisely.com.au) offers genuine support and guidance.
- We conducted a technology focussed workshop while in the States; this is what we learned from those businesses that had success;
- They had a plan. They knew what issues they wanted to address, how they were going to do it, what training was available, the implementation timetable and outcomes they were looking for.
- They involved staff in the process. Whether it was the design of the outcome, the vetting of the technology or the technology provider, they sought feedback.
- They invested time and money in upskilling. They provided training and support material, including detailed “how to” videos taking staff through each step in a practical and thoughtful way – no misunderstandings, no confusion. The training is clearly labelled as to what the process is, what the step in the process is, and an explanation as to what the outcome should be.
- They communicated the WHY as well as the what. Not just “this is what you will do”, but very importantly the why. This more often than not means a better outcome for clients, for the business and the staff members themselves.
- They included KPI’s in performance management. This meant specific, measurable goals in performance management including transitioning from the old to the new. Staff were rewarded for successful implementation.
- Staying, growing or going? The question for every practice owner.
This is another area where US and Australian practices share a similar experience – anecdotal observation by our partners reaffirmed the situation that for many business owners answering this question is being deferred to another day, with more immediate imperatives taking precedence. The irony isn’t lost that this is not a strategy they would recommend to their own self-employed/business owner clients!
As in Australia, the drive to acquire and/or merge continues although many owners are finding that potential purchasers/partners are far being more selective than they were just a few years ago, and the purchase terms appear to have more conditions or stipulations attached.
A few tactics:
- Develop succession plans now (before you need it), ensuring they include an external evaluation and addresses the ‘what if’.
- Create an IM (Information Memorandum) for your business before it’s needed.
- Being prepared for transition gives businesses the best chance of a successful outcome. (Further reading: BH Article The Victory of the Urgent, BH Article The Time to Repair the Roof…)
The US may be far away on the other side of the globe (and a rather long flight!), but the Advice industry in a different part of the world has many parallels and shares similar challenges with us Aussies and offers us many opportunities for sharing and learning.
For your consideration.