The financial advisory sector was no exception and applying the lessons learned will continue at RIAs nationwide for some time, according to Forum Financial Management. But no industry was affected as directly, immediately or completely as the healthcare sector. The potential lessons are many, but here are three topics that certainly deserve careful consideration as RIAs move forward.
Tip 1: Technology Will Drive Industry Capability
How many of us had never heard of Zoom before the spring of 2020? As offices and other workplaces nationwide instantly shifted to the remote paradigm, we learned that to meet client needs, we had to shift to online delivery of services and at the same time maintain the personal touch that clients value so deeply.
In what ways can you replatform delivery of products and services? Now that the remote workplace has become even more entrenched in our routines, smart use of evolving technology will likely become more crucial to success, not less. This includes not only Zoom and other online communication systems, but other technologically driven advising, back-office and compliance solutions. Being able to trust your technology will be ever more central to your ability to focus your energies on the client interactions, whether face-to-face or virtual, that you depend on for growth.
Tip 2: Strategic Mergers and Other Alliances Will Continue
Jacqueline LaPointe, in a January 13 column for Xtelligent Healthcare Media's Revcycle Intelligence, reports that the pandemic "confirmed the 'strategic rationale' for healthcare mergers and acquisitions." She further states that, according to healthcare advising firm Kaufmann Hall, M&A activity in the healthcare sector in 2020 "highlighted the need for hospitals and health systems to focus on core business strengths, address infrastructure gaps through partnerships and strengthen intellectual capacity."
Here again we can see echoes in the RIA sector, as independent advisors seek opportunities for strategic synergies and collaboration to maintain growth and delivery of better outcomes for more clients. According to data from investment bank and consulting firm DeVoe & Company, 2020 was a record year for M&A in the financial advising sector, the seventh consecutive year in which this was the case. Escalating valuations, the changing advisor demographic and historically low interest rates have all combined to create a fertile environment for M&A activity in the industry.
Tip 3: Building Diverse Teams Is Not Just a Growth Strategy—It Is a Survival Strategy
In a June column for MedPage Today, Naprisha Taylor reflects on the ways that diversity helped the healthcare industry come together around the goal of mitigating the effects of the pandemic and delivering care during perhaps the most disruptive public health event in history.
She commented, "The record-speed development of COVID-19 vaccines was achieved in large part because diverse perspectives came together across countries and across disciplines to scale their collective impact." Taylor goes on to assert that diversity makes for stronger teams and better problem-solving, due to the presence of a broad range of views, knowledge, experiences and perspectives.
The implications for the financial services industry seem clear. If advisors want to evolve and increase in relevance, they must prioritize diversity among their internal and external stakeholders.