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In the good old days, in that hazy time before 2020, meetings with clients were often conducted over a cup of coffee or a business lunch. Covid-19 forced many industries to search for digital alternatives.

The financial advisory profession was no exception. Despite being a business that has traditionally depended so much on face-to-face contact, many advisers were forced to work remotely. And that includes meeting with clients over the phone or via video calls. To this end, many advisers have found – perhaps to their surprise – that the new way of working can be very successful.

In the previous article, we looked at the possibility of owning and running a fully virtual advisory practice, gleaning insight from Derek Notman, who has cracked the code for making a remote practice not only possible but a complete success.

But it’s one thing to ask if pivoting online is feasible. The real question is: Is a virtual business a sustainable model? And can a digital practice really substitute for that intimate cup of coffee with a client?

Let’s take a closer look at the challenges – and opportunities – of building a sustainable digital practice.

Covid has forced businesses to become future-proof

In pre-pandemic days, an essential part of many financial advisers’ work revolved around meeting with clients, in the office, at their home, or over a coffee. With social distance, IFAs have begun to realise how much potential the Covid-led digital reinvention has brought.

Previously, the thought of conducting crucial meetings with clients online was not even considered. Now it has become part of our normal routine.

Running an online advisory business has also allowed many IFAs to transform their practices into ‘lifestyle businesses’, in which a person’s business is based around their preferred lifestyle, instead of the other way round.

On top of this, many businesses have been forced to shift gears and look at alternative ways of running to “future-proof” themselves.

But what exactly is a “future-proofed” business? At a basic level, we could define a future-proofed business as one that utilises multiple means to enable you to grow and change with the times as needed.

And here’s where technology makes all the difference. As you’re no longer confined by a single location, and you don’t need to rely on cumbersome office infrastructure, you can be much more flexible in how, when, and where you operate your business.

However, while operating a digital business offers clear advantages, you also need to appreciate the challenges to building and sustaining a fully online practice.

What does future-proofing your business entail?

If you pivot to a digital practice, four major elements of your business that will change:

  1. Communication – After going virtual, your communications with both clients and employees will be digital, whether it’s by virtual meetings, emails, or recordings.
  2. Management – You’ll no longer be overseeing an in-person team assisting you with tasks; management will take place online. This might require more follow ups and ongoing messages to get the answers you need.
  3. Operations – How you operate your day-to-day business will also shift. Tools and systems will become integral for you to stay on top of clients, meetings, workflow, digital filing, and other things.
  4. Client acquisition and management – Lastly, your client and acquisition and management will be done entirely online. Clients will find you through your digital marketing and prospecting strategies. You will build connections with old and new clients in a fully virtual environment via online meetings and communications.

Online client relationship management: It’s NOT all or nothing

Developing the technological infrastructure to operate remotely is one thing. But what about the personal side of an advisory business?

After all, not every client is going to want to work with a new financial adviser purely through digital communication. Some clients are still going to demand a face-face meeting.

Your clients’ needs and priorities are also all different. There’s no one-size-fits-all strategy when it comes to acquiring new clients. Some are going to feel safer by meeting with you virtually and others will not consider hiring you unless you are willing to meet with them in person.

That’s fine! Practically speaking, you have three options.

Firstly, if you decide to opt for going completely digital, you will have to accept that you will lose out on clients who aren’t interested in meeting virtually. That’s not necessarily a bad thing. As Derek Notman explains, as a digital business you have the opportunity to connect with a more diverse group of clients, and find clients that are ideally suited to your business.

Alternatively, you can choose to segment your client audience and apply the acquisition strategy that is most likely to earn their trust, whether this is in the virtual sphere or face to face. Make sure to give them the option to choose if you are in a position where you can physically meet with them.

Or where we think it will really end up at is with a hybrid model, where we combine the best of the digital/virtual model with the best of the brick & mortar model and then drop all the stuff that was holding us back.

Is going fully digital the right strategy for every IFA?

It’s important to remember that going the digital route is just one way of amending your business strategy for the future. Many people own and operate successful virtual practices. However, it does also come with its challenges and limitations and is certainly not for everyone.

Future-proofing your business is not just about having the right tools and strategies on your side. It’s about ensuring that your client relationships are solid, and identifying where you draw motivation from to put back into your practice.

If you’re an adviser who finds yourself energised by the engagement and exchanges that face-to-face meetings with clients bring, then going fully virtual is likely not the solution for you. The good news is that this doesn’t have to be an all-or-nothing decision. Advisers who want to keep their physical meetings with clients but still adapt their business for the future can adopt a hybrid approach where you augment your physical meetings with virtual follow-up meetings or vice versa.

Choose technology that meets your goals

Whatever you decide is right for your practice, make sure you have the necessary tools to secure your longevity. Whether you choose to run your practice online, or from an office (or a bit of both), you can enhance productivity and give yourself the time and space to effectively grow your business with effective automation.

“Productivity is being able to do things that you were never able to do before.”

Franz Kafka