Newsletter Spring 2009
May 2009 | Don’t Let a Good (Great?) Recession Go to Waste
[Download printer-friendly newsletter: Spring 2009 Newsletter (PDF 164(kb)]
Dear Friends, Colleagues, and Partners,
You may have seen that the New York Times finally has a label for this – the “Great Recession.” We’ll see if it stands the test of time, but it is another indicator that we’re starting to get more of a handle on this event. While waiting for full visibility, we’ve observed that many industry executives are still focused on business as usual, just with a sharper pencil. Like reluctant homeowners, we are not all yet at the point where many companies have capitulated and are acting on the opportunity for radical restructuring.
(The chart below from Bain & Co. confirms that more gains come from major change than from tweaking.)
The real opportunity will come to those who take a step or two back and evaluate what is happening with clear eyes and a blank spreadsheet. It may be a while before we really “know” what the landscape looks like. So as an alternative to the full view of the future we all crave, I’d like to lay out a couple of different ways we might frame this opportunity for ourselves.
1. Go ahead and grieve. Get mad. This is incredibly sad. And something to be really angry about. People we care about have lost and are losing jobs. Businesses we’ve worked hard to build are losing topline revenue by the bucketful. A few people made some really bad decisions that affect us all. Everyone has been touched in that most sacred place - the portfolio. True, some lousy businesses are now DOA and that is OK. But the rest is just awful.
2. Be creative. If you and your firm are ready, begin to craft a distribution strategy that reflects a concentrated handful of national full-service firms and many RIAs and indies in transition. (We see a huge rollup opportunity for small regional B/Ds and RIAs, but not everyone has the skill set to drive that model to success, so it may not really change the distribution landscape anytime soon.) Internal reorganization will likely follow a retooled strategy.
3. Be realistic. If your firm or product line is more “opportunity for improvement” than “we’re on the right track,” this is the time to say so – without career risk. Small funds are a problem, consistent underperformance has no role in the new world order, and packaged products with layered fees raise a red flag for properly skittish advisors. This is a great time to take an unbiased look at your manufacturing plant and see what you need to retool.
4. On a more personal note, do something proactive and cathartic. Have a recession/bear market coffee break. Invite everyone in the office to bring an unopened envelope they’d like to shred. (Account statements, offer letters for jobs that went away, you get the idea). Or host a brown bag lunch / Yankee swap of overpriced stuff you bought during the boom years. It’s time to turn this around - beginning with our own perspectives.
With sincere wishes for good things,
Lisa Cohen, CEO, Momentum Partners, LLC
IN OTHER NEWS
FINANCIAL ADVISOR TRUST BENCHMARK NOW AVAILABLE
In partnership with Registered Rep, we’ve created an industry-wide, all product, all channel benchmark for advisor trust. Registered Rep will be publishing updates to the industry-level benchmark quarterly. If you’d like to use these benchmarks to measure where your firm and products stand in the minds of advisors, give us a call. The “trust vacuum” creates a great opportunity for some firms - and an opportunity for improvement for others. Find out where you fit and what your roadmap to success looks like.
ABOUT MOMENTUM PARNTERS, LLC
Momentum Partners, LLC serves the financial services, investment management, and related industries with creative market research, thoughtful product design, and effective go-to-market strategy and implementation. Momentum Partners is a signatory to the UN’s Principles for Responsible Investment. Our Social Responsibility Practice is dedicated to serving the SRI and ESG communities.
Download printer-friendly newsletter: Spring 2009 Newsletter (PDF 164(kb)
Newsletter Fall 2008
Wall Street indexes predicted nine out of the last five recessions
- Paul A. Samuelson
[Download Printer-friendly Newsletter: Newsletter Fall 2008 (PDF 68kb)]
Dear Colleagues,
In adversity, there is opportunity. The media is doing a great job of covering the adversity, so let’s (pull ourselves away from the slow motion train crash) and focus our attention on the opportunity. These times of extreme challenge are a good time to prune product lines, revisit distribution strategies, and talk to the press.
1. The old financial distribution channel models are completely outdated now. There are, essentially, no more wirehouses. Banks are now a much more significant channel, but there will certainly be cultural differences in selling into a B of A-owned Merrill Lynch. And independents may be the big winners. All that said, it is our experience that when a tried and true distribution and/or product model is under attack we tend to get a bit jealous and guarded about exploring new ways of doing business. This is one of those times. The old distribution models are being dismantled bit by bit, creating opportunity for new – perhaps more profitable – asset management and distribution models.
2. Consider asking your clients – and theirs – about trust. A loaded question right now, of course, but likely to get a vigorous response. This could be a survey about how they feel about products, distribution models, markets, or whatever is most relevant for your firm. The best reason to do this is that even if you don’t ask, and therefore do not know, people will still act on their feelings. If you know how deep the trust abyss is, you can build the right bridge.
3. Talk to the media. If you need a good media relations firm, let us know and we’ll get you to the right place. If you already know a reporter or two, call them and ask them what they are writing about right now and how you can help. Then be available when they call and/or give them the data or referrals to other sources they need.
4. Let us know if we can help. Don’t hesitate to call if you’d just like an ear and some perspective. Consider sustainable investing (see below) as an approach that could help build your business. And please don’t keep us a secret – we always appreciate you letting colleagues know of us if you feel we may be helpful to them.
Sincerely,
Lisa A. Cohen
CEO & Principal
ABOUT MOMENTUM PARNTERS, LLC
Momentum Partners, LLC serves the financial services, investment management, and related industries with creative market research, thoughtful product design, and effective go-to-market strategy and implementation. Momentum Partners is a signatory to the UNs Principles for Responsible Investment. Our Social Responsibility Practice is dedicated to serving the SRI and ESG communities.
Download Printer-friendly Newsletter: Newsletter Fall 2008 (PDF 68kb)
