“The future is already here – it’s just not evenly distributed.”
I am fairly new to the business manager market. I have spent the bulk of my career working with registered investment advisors (RIA’s) and family offices, which have many similarities to business managers. I hope my outsider perspective can provide some insights as I believe many of the trends that have impacted advisors will also impact the business manager community. Time will tell if my predictions are actually insightful, but here are my predictions for business managers in 2020:
1 – World Goes Digital: Business managers will see their day to day interactions become more digitally focused. How they interact and do business with their bank will certainly become more digital. Kelly Coffee, CEO of City National Bank, has made it a major focused for the bank on providing a digitally enabled banking relationship. Digitally enabled banking can enhance the personal relationship by taking the day to day friction out of routine tasks.
2 – Your Clients Demand You to Go Digital: Your clients will demand that you go digital as well. Your clients want information when they want it and delivered on the device they want. They are using products and services from Amazon, Google and Facebook and this has changed their digital expectation for other service providers. Your clients want to service themselves for routine tasks such as getting balances online or to make a payment request online. These types of self-service tools are not just for the lower end of the market as clients of all sizes want these features. The personal relationship is not replaced by a digital relationship, it is enhanced by one. When you do personally interact with clients it will be about strategic matters vs. simple tasks that can be performed online.
3 – Marketing Goes Digital: In fact it already has. The change in 2020 is that it will no longer be enough to just rely on the passive referral for new business. Even clients that are referred to you will do some sort of due diligence on the web. Prospective clients are likely to do a Google search and even look you up on LinkedIn. It will be important that business managers have a website that is not from the 1990’s, they have a corporate page on LinkedIn and that the partners of the firm have a clear and consistent LinkedIn profiles. Prospects are doing web research. Your lack of public presence on the web makes an impression as well.
4 – Search for Talent Gets Harder: One theme I hear pretty consistently from business managers is how hard it is to find good people. Heck, it is difficult to find even just okay accountants. The quest for quality bookkeepers and client service personnel will only get more difficult in 2020. Firms will need to not only provide competitive salary and benefits, but also find ways to do more with less. Automation will be key as firms can no longer just throw bodies at problems. Technology will need to be deployed in a way that reduces repetitive manual work. Firms that are entering investment information manually every month may want to explore options such as InvestLink that will automate this process for example.
5 – There will be an App for That: The good news is that there will be more market specific alternatives for business managers in terms of technology. The bad news is that there will be more choice, which will lead to some confusion. Business managers will be able to choose from a number of market specific, cloud based solutions. Some of these solutions will solve a specific task and some will be more comprehensive. As the RIA market has shown, those vendors that are building ecosystems with API based integrations will have more success than vendors building a closed, all in one proprietary solution.
6 – Consolidations & Succession Planning pick up Steam: Succession planning becomes more and more important as the average age of partners continue to go up. Succession planning will be key for those firms seeking to be bought as RIA aggregators will continue to make acquisitions in the business manager space.
There are many parallels between the business manager market and the independent RIA channel. As the maxim goes by William Gibson “The future is already here – it’s just not evenly distributed”. I expect to see these trends and more to take hold for business managers in 2020.