’Tis the season to plan for the upcoming year, which (for the most forward-looking firms) means identifying how to make 2020 better in every way than 2019. By now you’ve heard, ad nauseam, a lot of practical advice that everybody knows: create workflow systems to improve efficiency, invest generously in training your staff, empower the future leaders of your firm with increasing decision-making authority and diversify your stable of employees.
Q3 2019 hedge fund letters, conferences and more
I heartily endorse all those things, but you know them already. Are there specific, out-of-the-box strategic initiatives that you could be doing in the coming year that will enhance your business prospects?
Let’s look here for a handful of unfair advantages to gain over the competition in 2020. These are things that are not hard to implement, which will help you become more efficient, gain new clients or stand out from your peers.
Last year, I offered five challenges that the profession will face and how to overcome them. Some of them are still relevant, while others are replaced here with new issues and proposed strategies. Here’s the updated list:
Form CRS: Standing out in the marketplace
On May 1, 2020, advisors and broker-dealers will have to file their new Form CRS – the disclosure form that the Securities and Exchange Commission is mandating for everyone who provides investment advice. Personally, I think this was a cop-out (why not require everyone who provides investment advice to register as an RIA?), but the bigger problem is that the disclosures are structured in a way that will make brokerage firms appear to be just like fiduciary advisory firms.
This is compounded by the fact that the disclosures must include a link to a series of five videos narrated by SEC Chair Jay Clayton, who thinks that everybody in the business (broker or advisor) only provides investment advice, and never considers (in the videos, at least) that some of the fees that clients are paying go toward financial planning or other technical services.
If you’re a fiduciary advisor, you’ve already faced a playing field tilted toward the brokerage side. (When was the last time you bought a Super Bowl ad to tout the benefits of working with your firm?) Now your brokerage competition is going to be handing out SEC-sanctioned disclosure forms that say they have to act in a customer’s best interests, which emasculates the primary marketing advantage on your side of the field.
What to do? Carefully craft your Form CRS to state, somewhere on the form, that you routinely offer a “fiduciary oath,” pledging to act in the best interests of your clients. (You can find one here) And then I am going to make a recommendation that I have never made before.
You should advertise.
Read the full article here by Bob Veres, Advisor Perspectives
