Are You Selling Your Time or Your Skill?

A few months ago, I had met with a prospective client who is a founding partner of an External Asset Manager (EAM), which is the equivalent of a Registered Investment Advisor (RIA) in the U.S. or an Independent Asset Manager (IAM) in Singapore. I was introduced to the prospect through a mutual connection to determine if the solution I offer could benefit the prospect. The prospect wanted to digitize his business. What digitization is and specifically within the wealth management industry is a longer conversation.

In the prospect’s world “digitizing,” meant streamlining business critical tasks that were consuming much of his, the advisors, administrative staff and finance personnel consolidating transactions and reconciling payments and fees across multiple custodians every month and quarter. Up until now, the prospect was still using spreadsheets to manage the revenue and reporting aspect of his business and knew that this is a drain on human capital. Furthermore, the prospect understands that utilizing his digital property (aka the website) and offering a richer client engaging experience is the direction the industry is heading.

“Adapt or die,” was the phrase he used.

We had to dig a little deeper to understand the root cause of this desire to move away from current business processes.

1. Consolidating and reconciling positions and transactions for his business on a monthly and quarterly basis, which includes 6 advisors, 2 administrators and 83 clients consumes roughly 24 man-days per month, 72 man-days per quarter and 288 man-days per year.

2. Generating quarterly reports following the consolidation and reconciliation process consumed an additional 20-22 man-days per year

3. Offer a richer client experience through the website that can engage the client to further encourage dialogue, build advisor value and market additional services.

This obviously sounds awful if time is being spent on these monthly and quarterly activities but the real pain points weren’t the amount of time the staff, including himself, were investing on a monthly and quarterly basis to conduct these mandatory activities but rather the development of the business suffered. The inability to attract new advisors, clients, AUM and identifying great investment opportunities simply due to the lack of time were the real pain points the prospect was “trying” to move away from. Also, losing great advisors and AUM to more digitized, client centric and efficient EAMs was a real risk. The prospect and his staff admittedly were, “too caught up in the business rather than building it.”

This all sounded great to me as the pain points covered were exactly a few of the digital transformation services I provide. Of course, the real hiccup during this process didn’t appear till the cost associated with resolving his pain points, appeared. Fixing a big problem is rarely, if ever, cheap.

A number of years ago during a corporate training event, I was proposed the question, “Are you selling your time or your skill? If it’s the former you will never receive the success you want or deserve.”

This is the same question I proposed to the prospect, recently. Taking a step back, the prospect realized that his time was being invested in tasks that are not necessarily his skillset. The time he is investing in these tasks are offsetting his ability to build the business. He is an investment manager and business owner. Investors pay him and his advisors to manage money. That is his skillset – investment management.

The prospect was challenged knowing that if he were not willing to make the investment in the business to alleviate time across the board for admin and advisors, the goal of expanding the business and creating a customer centric experience would never materialize. By not digitally transforming the business and adapting to market trends and demands the prospect’s business would remain stagnant or worse.

Making the investment into digitizing the business was not an easy decision since the processes were always reliant on considerable human capital that was already a fixed cost. Once the prospect, now a client, made the conscious decision to invest in his business, he has moved completely away from his pain points and has now grown the business by adding 4 new advisors, moved into a much larger office and initiated a new insurance unit for the business.

Let’s just say he adapted.

Jovin Shen

Head of Sales & Marketing

linkedin.com/in/jovinshen

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