Is there an anchor (or two) slowing you down?
In business, as in life, it is not always easy to identify the anchors that slow us down or create a bias in us that may prejudice our own interests. And yet, achieving goals can be pursued so much more efficiently when the mind is open to possibility and inclined to action.
Oliver Wendell Holmes Snr, writing in the 1830’s[1], put it this way,
"To reach a port, we must sail, sometimes with the wind and sometimes against it. But we must not drift or lie at anchor."
For financial advisers, lying at anchor can feel quite secure. This may take the form of sticking with existing processes and assumptions, and even finely polishing them, when it may be better to question them at their root. The problem with remaining at anchor, without torturing the metaphor too much, is that there is a competitive race to be run and racing with the anchor down is rarely a winning strategy.
How does anchoring typically manifest itself? I’ll give you a couple of examples:
As an industry we are still anchored to old processes that were once considered best practice, but no longer are. We know today that employing managed accounts, properly done, is superior to the traditional way of managing retail investor portfolios when it comes to service, conflict management, agility, fairness and efficiency. Yet, the tendency is to think in terms of having to make the case for changing to managed accounts when in fact the moral and commercial imperative should be to have to justify not changing.
Having decided to discard one anchor, we may look to replace it with another one. Most financial planning businesses have a history of advising on investment products. For some planning practices, when it comes to creating a managed account program for their clients, their past experience anchors them to 'productising’ their investment offering, when what clients want is an advice service. Whether they receive a product fee or not, this “product” approach is not easily differentiated from peers. Advice is a professional service and needs a service experience for target clients that is far more distinctive. Thinking in terms of service, rather than product, is less limiting and allows a more complete solution design.
While breaking free takes resolve and effort, lifting anchor and plotting a course to a preferred destination can be enormously energising for your business. Further, there are a growing number of organisations that have ventured forth to the new world and professional ‘sea pilots’, like Philo Capital Advisers, who can tell you what to expect and help you reach your destination more safely and efficiently.
I’ll end with a more contemporary quote,
"The past is an anchor with suffering written on the rope. I don't live there now. I am cutting myself free."[2]
A little florid perhaps in the context of portfolio management, but there really is no reason for you or your clients to continue to suffer from the limitations for old ways of working.
If you would like to discuss how Philo can help you navigate to a better life for you and your clients, please don’t hesitate getting in touch with us.