New Competitors Don't Have Legacy Beliefs

In my last blog, we related my personal story of changing hair stylists to the process that clients are actually using to find relevant advisors today. They are leaving existing relationships by pulling in information from advisors that are speaking to their needs. Our profession is at an intersection where many of our historical services are less valued and being commoditized due to our lack of differentiation. In fact, more and more firms are competing on price rather than value. The decreased margins across the profession speak to this loud and clear. 

Personally, I believe our greatest competition will not come from the CPA firm down the street, it will come from new CPA-led firms, technology companies, data companies and professional advisors that are focused on value and being relevant beyond compliance work. Our toughest competition will come from places that we would not have imagined because they will redefine our business model if we don’t. That’s the beauty in this, we are in the driver’s seat if we can move faster and truly develop new business models. 

With McKinsey recently reporting that only 8% of CEO’s believe that their present business model will survive in the future, it’s probably safe to say that our clients are thinking beyond compliance and assess a lot more value to services that help with strategic direction and business model success. 

In a pull economy like we have today, the buyer has the leverage. Lots of choices can be found and buyers are researching their problems and needs. Buyers today can quickly source solutions beyond their relationship with us. 

As we reflected last week, our legacy beliefs give us false security that our relationships are strong enough that we will know what our clients need, and that we are successful and will continue to be so because of our strong client relationships. This is eerily similar to our claims of being “Trusted Advisors” on every website. 

These legacy beliefs are prevalent in our profession as evidenced in discussions with leaders all across firms and demonstrated by our slowness to address new opportunities, new services and to grow new skills. How do we break loose from these legacy anchors—anchors of comfort and control?

Let’s consider this reality check with our team members:

• What percentage of our partners and managers are actually providing new services? Have recently developed new knowledge? Have developed new skills?

• How is our faith in existing relationships putting us at risk? How many of our partners and managers are making assumptions versus having real relevant conversations with clients? What do our calendars reflect on our activities the last 90 days?

• What do our marketing messages say we believe? Are we doubling down on what we have always said? Who are we trying to convince, ourselves or our clients?

What are your team’s thoughts around these soft trends that I believe are making how we are serving clients today very risky for our future?

• Clients are becoming impatient with advisors that do not help with uncertainty and strategy.
• Clients have the means to find solutions outside of us and they are actively looking.
• Clients will give up relationships if they find a more valuable experience.
• Clients will move traditional compliance work to the lowest price if we can’t differentiate value beyond relationships.
• Clients will pay more for our services when we are relevant to their future.
• Past reputation will not be the primary factor in future growth.

I believe that it’s our conversations and debates around these questions and assumptions that help us find our future direction to abundance and growth. Are you seeing any new barbershops/salons in your markets? Let’s make sure we are the ones giving the haircuts and not taking one.