One year ago this week I was in New York on what I didn’t know would be my last business trip for a long time. I could have never imagined how the year to come would both disrupt and accelerate business plans for us and for our clients, but it’s been strangely great and awful all at the same time.

Many of our clients have been unusually reflective about practice management issues over the past year, and that effort has been rewarded

Many of our clients have been unusually reflective about practice management issues over the past year, and that effort has been rewarded. After a brief gasp and pause in the second quarter of 2020, we saw many clients accelerate leadership transitions, look for transaction opportunities, shift product and service offerings, rewrite fee schedules, refine marketing approaches, and rethink what it means to be a firm – all while working remotely. As our annual projects came through the shop this winter, we tallied the results: more growth and greater efficiency. 2020 was a good year, at least on paper.

Still, for the industry as a whole, focus on practice management is relatively new and, for many, relatively foreboding. Most firms grow from the talents of individuals who enjoy some or many aspects of managing money. They partner with like-minded individuals, start gathering client assets, and when momentum kicks in and the market cooperates, they become a profit-making machine. That formula worked for a long time.

The deficiency in the growth story of many RIAs is they employed lots of people to work “in” the business, but not enough to work “on” the business. It’s not unusual for heads of multi-billion dollar firms to still manage client relationships, serve on investment committees, and be the principal in charge of major human resource decisions.

Strategic thinking about practice management is a necessity in an industry that has been catapulted into the future

Today, the investment management industry doesn’t have the same growth drivers it enjoyed for a long time, and defending margins has become an active discussion. As a consequence of those forces, and a year where the industry had time to rethink everything from custodial relationships to custom indexing, investment management is becoming subject to creative forces that were very recently as unimaginable as a year without business travel.

We have had a great time putting together the conference for this week, but I think we’re only scratching the surface. Strategic thinking about practice management is a necessity in an industry that has been catapulted into the future.

Practice management is resource-intensive, but enduring the cost of catching up to the future is prohibitive.

Just don’t tell that to the post office, which recently unveiled a new fleet of delivery trucks. The Postmaster General noted that only 10% of the new vehicles would be battery powered, because that would cost extra. The gasoline powered motors could, however, be converted to electric during the vehicles’ estimated 20-year life. Given the pace of innovation at the postal service (Mercer Capital shares its hometown with FedEx, so we’re biased), this fleet plan tells me that the age of the internal combustion engine is rapidly coming to a close.

On the other end of the spectrum, McLaren just announced a new sports car, the Artura (pictured above). With a high-performance hybrid engine and an ultra-light carbon fiber monocoque architecture, the Artura is a testament to a future that is beautiful and exciting. We look forward to sharing that future with you at the RIA Practice Management Insights conference this week.

RIA Practice Management Insights
Is Only 2 Days Away!

We are excited to bring this virtual conference to you. The focus is on OPERATIONS – strategy, staffing, technology, firm culture, marketing, and so much more. If you’ve been too busy working in your business to work on your business, this conference is for you!

This 30% special conference discount is only good until Tuesday, 3:00pm ET. After that, the registration fee returns to $250, so act now and save $75!

In the meantime, want to see the conference in a nutshell?  Check out the video below to learn more.