[With the accelerating rate of business change sweeping across all industries and markets, true competitive advantage in the 21st century resides on being part of platforms and the networks of specialized knowledge they connect. No one person or company can possibly keep up with everything in play for the immediate future. A truly effective platform though rests on building a network of strategically aligned partnerships of like-minded and focused professionals that share a common goal.
To better learn how successful platforms are being built, The Institute for Innovation Development recently reached out for a follow-up chat with Steve Lamoreaux and Hessel Pole of Invested Consultants - a resourceful consultancy firm that has been building a rather unique platform and network of cutting-edge services and products for growth-oriented financial advisors.]
Hortz: Please tell me your thoughts about the changing power structure from big companies to motivated platforms and how your business is responding to this new business dynamic.
Pole: The power of innovation in the investing world no longer lies solely in the hands of the big corporations. Nor does it benefit only high net worth individuals. This power rests primarily in new platforms of independent networks and the average investor. Through strategic partnerships amongst small and nimble companies providing innovative services and products that complement the whole, both the investing space and those with access to it is becoming more and more democratized.
InVested Consultants serves as a conduit to help advisors and practice management leaders with cutting-edge financial products and/or solutions to expand their reach. We curate a melange of niche and groundbreaking investment and FinTech solutions that combine ease, sophistication and affordability. Our aim is to empower financial advisors with the tools necessary to maximize their growth and legacy potential.
Hortz: How does your business model of organizing as a platform help your consultancy firm to be more than a simple collector of firms to market?
Lamoreaux: Building our firm into a “platform” provides a clear focus to a bigger purpose, a way of unifying and aligning our efforts and offering a shared connector with partnering firms that can allow us to rally together. In our case our rallying cry and purpose is to help advisors “stay ahead of the curve”. This allows us to be careful in our selection of firms to represent and promote, while setting up the resources and opportunities of more open collaboration and strategic partnerships to go to advisors with.
Pole: Put simply, InVested Consultants wants to be a partner with financial advisors interested in taking the steps necessary to grow their practice. That means we have to be able to provide innovative solutions that combine their tactical needs of today with their strategic goals for tomorrow. To that end, we have a selection bias for FinTech specialists, under-the-radar asset management firms, and creative industry vendors who are driving new innovative approaches and technology in the direction that these advisors want to go.
Hortz: Can you give us an example of some of your partnerships?
Lamoreaux: By way of an example, one of the greatest challenges facing seasoned advisors today is how to remain relevant during the transition of generational wealth between their clients and heirs. We are on the brink of the largest transfer of wealth in human history, and if advisors are not proactively positioned, they’ll miss the opportunity to participate. In the majority of cases, when wealth passes to the next generation, the heirs change financial advisors. But, this scenario is not necessarily unavoidable. Advisors do have a chance to adopt more holistic and innovative solutions which will allow them to keep a hand in the process. By doing so, the advisor establishes greater relevance for themselves and even more value for their practice, which will translate to a more profitable succession plan and legacy.
Since estate planning is the great facilitator in this transition, we uncovered and brought into our platform one of our FinTech partners - EP Cloud. They aim to place financial professionals directly at the center of this pivotal event. Their solution combines traditional estate planning law and 'intelligent automation' to empower advisors with greater oversight in the creation of their clients’ estate plan. By helping clients obtain attorney-drafted documents from their own office, advisors can establish lifelong relationships with their clients and secure a direct line to the next generation.
Hortz: What have been some of the most valuable lessons you learned in partnering with firms in your network?
Lamoreaux: Practically, we learned that mapping out a joint value proposition helps greatly in directing our working relationships and in seeing where we can reinforce and complement each other’s visions from the beginning. From our partners, we hope to gain insight and learn from their fresh and new perspectives. Overall, it’s important that we are able to nurture a symbiotic relationship that thrives on the strengths of both our partners and ourselves
Pole: We have also discovered in working with FinTech startups and other strategic partners that by sharing our entrepreneurial experience and industry knowledge with these young tech companies, we can help them to develop practical, next-generation applications, as well as grow their own businesses.
In several cases, we’re partnered with software developers with little industry experience who have created “outside-the-box” solutions for service financial advisors. It’s rare to find FinTech solutions that are strong in both the ‘Fin’ and the ‘Tech’. In that context, we provide the strategic insight that helps guide an innovative approach to the practicality of the software the technologists develop.
Hortz: What new areas are you investigating and bringing to the table for 2018?
Lamoreaux: Our goals for 2018 are to stay ahead of the ever-changing challenges in cybersecurity, expanding regulatory oversight, and the use of artificial intelligence applications. We are specifically looking for innovative, millennial-driven FinTech companies with whom to partner. We feel we have a wealth of knowledge and experience we can impart to the younger generation of FinTech developers to help them understand traditional advisors’ needs.
Pole: We’re also increasingly finding that the millennial perspective is moving to the forefront; not only from the consumer/investor standpoint, but from the perspective of introducing innovative technology and using that technology to revolutionize a traditional advisor’s business. Oftentimes that requires a communication bridge between generations, and we have learned to be that bridge. I’m a Gen-Xer, so that already comes naturally.
Hortz: Why are you increasing your focus on enterprise level relationships? What are you bringing to the table for those relationships?
Lamoreaux: On our consulting business, we have determined that we can be of better support to advisors by focusing our partnership efforts in 2018 with their practice management and other enterprise level leadership. We feel this more “top-down” approach can best leverage each other’s efforts. By redirecting our focus and communicating through the enterprise level, we found we can reach a larger audience of independent advisors in need, while providing more innovative solutions and research capabilities to our enterprise partners.
For practice management leaders and other enterprise-level professionals, we are leveraging their time, money and effort in searching and isolating an array of under-the-radar but resourceful business strategies, FinTech solutions, and non-traditional investment managers and tools. We can act as an outsourced R&D and business resource partner to also keep them ahead of the curve.
Hortz: What do you look for in determining which firms become strategic partners? Is this another level of due diligence you use in working with FinTech companies?
Pole: When we are speaking with a potential strategic partner, we are looking and listening for:
flexibility/adaptability – both ideologically and technologically;
scalability – can this solution handle greater usage and still perform at a peak level; and
sustainability – do they have a sound financial structure, is the pricing right, is their competitive advantage short- or long-term, and can they provide adequate client support?
Lamoreaux: With the addition of each of our new service and solution provider partners, it forces us better organize and manage our own time, and yet maintain an ear to the ground, listening for the next game-changing idea. We look for new strategic partner firms to help us stay ahead of the ever-changing challenges in the financial services industry and that keeps us busy.
Hortz: What is your best advice for advisors at this juncture?
Lamoreaux: Where does an advisor begin when trying to stay ahead of today’s accelerating change curve in this industry? There are so many moving parts in the world of today's financial advisor -- their aging clientele; enormous transfer of assets generationally; the intrusion of artificial intelligence into everything from asset management to client interaction; the ever-faster and broadening proliferation of information and the need to decipher, parse and make it usable for business insights; the discovery and integration of next-generation FinTech solutions available to improve practice efficiencies and client engagement; expanding regulatory oversight - all will have an impact on a practice's success or failure.
Pole: An advisor must realize that they should accept outside guidance and support in making the decisions that will affect their future; that they can only get up to speed faster through strategic partnerships. So, bottom line, active collaboration, strategic partnerships, and an open mind, will go a long way toward establishing the successful and profitable financial advisor of tomorrow.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.