Two articles caught my eye recently. I wanted to share them with you.
In today's "www.horsesmouth.com", Bill Nicklin has written a compelling piece entitled, "Managing Money Doesn't Go Out of Style." Nicklin wonders aloud if upcoming changes in technology will "commoditize" financial planning services...and reduce/eliminate the role that advisors play in the financial planning process. In contrast he suggests that advisors pay attention to their ability to articulate a clear investment direction in response to, or in anticipation of, the face of change. In his words, "the ability to pick stocks and manage money never loses its value."
I think that Nicklin is on to something here. I have worked directly with many hundreds of advisors over the past twelve months. I can count on one hand the number of advisors who can respond immediately to the question, 'What do you like?'...with a list of specific companies or industry sectors. A more likely response is, "Oh...I'm not a stock jockey,' which they will spit out of their mouths as if it were a bug.
As the pendulum of the financial services industry has swung away from the transactional side of the business, many advisors have lost the ability to speak with conviction about where they believe investment value exists. Nicklin's point is that the two issues are not mutually exclusive. From a positioning standpoint, advisors should be asking, "How can I be different from the all of the other 600,000+ advisors who are registered with the NASD.?" From this standpoint, "stock-picking" ain't so bad.
Another good article in the June Fortune Small Business entitled, "Getting to Know You: Microsoft dispatches anthropologists into the field to study small businesses like yours."
The gist of the article is that Microsoft believes that much of it's revenue growth will come from "small firms", which now create more than half of U.S. private nonfarm GDP, and employ 39% of all high-tech workers. Given that Microsoft's indirect sales model, of selling it's software via resellers and hardware manufacturers, has created a wide gulf between the company and it's customers...they are taking innovative efforts to bridge the gap.
One of the initiatives is that Microsoft has been undertaking is a detailed field study of small firms all over the U.S. They have employed numerous social scientists, including two anthropologists, to work on new projects. Microsoft's anthropologists are somewhat akin to old-time, pith-helmeted anthropologists funded by colonial governments that needed to understand their native subjects in order to rule them more effectively. Although Microsoft would probably reject this comparison.
The objective of these field studies is to find out how small businesses use technology and how technology can make them more productive. As they watch CEOs, accountants, salespeople, marketing executives, and others navigate their day, Microsoft is especially attuned to noticing points of "friction," i.e. time wasted getting information that already exists elsewhere.
That's all for today. Ciao.
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