Recently, we spoke with a firm that is considering operational and technological upgrades. The founder of the organization made it clear why he spoke with us:
He said he blocks off a few hours at the end of every week to look at new solutions for the organization. If something looks good, he'll move forward.
I was quite impressed with his approach. Being open to new ideas sounds simple and cliché, but few make the commitment to being open. It's the kind of commitment that needs a place on one's calendar.
At Empaxis, it's always an honor being considered to lead an investment firm's operational and technological transformation. Knowing someone has taken time the for us, we want to make sure their interaction with Empaxis is most meaningful.
Being open to new ideas requires more than lip service, and below are reasons why investment firms should make it it a priority.
Being open to improvement is like exercise. Many people know they should exercise more, but without a written commitment or set time on the calendar, that much needed physical activity gets put off.
Inevitably, they say, "I'm really busy" and "I have no time".
Before they know it, previous activities become ever more exhausting and now their clothes don't fit so well.
The same principle applies for investment firms. Holding off on those much needed improvements leads to future problems:
Dealing with these issues later will only make it harder to fix, whereas starting sooner can help turn the tide, limiting the loss of productivity and profit.
Firms should make time to find solutions, including time to improve oneself personally and professionally. Whether it's improving public speaking and leadership skills, investing strategies, sales and marketing processes, client relationship management, etc., it's important to devote time, honing one's skills and staying up to date with the industry and competition.
The stats show not all is perfect.
Using family offices as an example, they face challenges when it comes to risk management.
According to a Boston Private white paper:
Wealth and asset management companies are no less vulnerable to these threats and no less immune from complacency. Inefficient and risky practices can occur anywhere if not kept under control.
Furthermore, the prospects of increased competition, fee compression and interest rates near zero could significantly impact firms' finances.
More cost-efficient practices are needed in response to financial concerns, and the COVID world we live in has shown how much and how fast things can change quickly.
Firms need to stay on top of their game by addressing the issues.
To help investment firms, we recently wrote content on financial advisor website security best practices and how smaller investment firms gain an edge over larger competitors.
For one's reading list, check out our best 5 books for operations managers.
Setting aside a few hours every week to review third-party vendors, learn new skills, and stay up to date on what's happening in the industry are all ways organizations improve.
When it comes to third parties, there are different areas they can help, be it investing, portfolio management, accounting, HR, IT, operations, compliance, etc.
In many cases, vendors will do cold outreach to executive leadership. Even if there is not enough time to entertain all meeting requests, it is still good to be aware of the players in the third-party space.
Keep a shortlist of firms that are worth talking to, and have the conversations. Investment managers may very well come across a good and feasible solution they would've otherwise overlooked.
With so many emails, it's easy to say "no" to all, but it's important to distinguish between professional and non-professional outreach.
As a general rule, pay less attention to emails from vendors who:
Whether the emails are from bots or amateurs, their lack of transparency should practically disqualify them from consideration. (For RIAs wanting to learn more about prospect outreach, check out one of our previous posts on the topic of cold email marketing strategies.)
But for those who meet the professional criteria (professional email address, good written communication skills, a proper signature, and can be easily found on Google and LinkedIn), they are worth remembering.
Even if their services aren't needed right away, things can change a year or two down the road.
Investment companies will be in a better position having done the research in advance, rather than scrambling last-minute for a solution.
Being open to new ideas requires a change in mindset, as well as a place on the calendar.
The only way to grow as an individual and organization is by being open, flexible, and fully aware of all the opportunities.
If there is a chance to cut costs, boost efficiency, increase security, or promote the client experience, why not take a look?
Weed out the pretenders from the contenders, and keep a list of service providers that may help. Set aside the time to speak with those shortlisted.
At a personal level, build skills and continue educating oneself. The world is changing fast, as technology advances and COVID-19 have shown.
These are all good habits for any investment organization, and these companies will be better off than their competitors who dismiss new ideas and make no place for solutions on the calendar.