Future shock
In 2010 and beyond there are going to be some key challenges faced by all West Midlands-based firms in the business and professional services sector. There will also be some challenges specific to individual sections of our community.
Starting with the general challenges, I see attracting and retaining key talent as top of the list, as without this talent our firms will struggle to compete on an even footing. During the past 18 months there have been layoffs across the entire sector, or a cutback in hours; at the same time people have still worked hard and will want to be recognised for these efforts through the opportunity for progression. In partnership firms, this may be a challenge as creating more partners when profits are still not at pre-credit crunch levels means that decisions have to be made about short-term dilution versus long-term team development and growth.
Hourly rates will also come into focus as there has been a temptation and, arguably, a need to sharpen the pencil to win business; but once fees have gone down it can be a challenge to increase them as clients may not be overly keen to see these go back up. This is where there needs to be a balance between short-term survival and longer-term commercial savvy.
One key area of uncertainty at the moment faced by firms in the financial services sector is around RDR - the retail distribution review. This faces the financial services industry across the county and is forcing businesses to re-evaluate their current business models, their approach to recruitment and training, their charging structure and the qualifications their teams require. This is a welcome change as it will help to rebuild confidence from clients and the public as a whole in the financial services industry, which has been severely dented over recent years. However, as with all change, some tough decisions will need to be made. Firms that have a lot of senior individuals who have been grandfathered into their new roles will be putting people through new qualifications at a time in their life when this might not be a welcome shift.
Moving forward as confidence continues to increase and as the flow of business opportunities rise, there will be lots of firms who are vying to win these new mandates. With this in mind I strongly believe that the key to firms succeeding is through effective collaboration with other firms, as after all, a warm introduction to a new client from one of their other advisors is far more powerful than a cold approach. Those firms that have actively encouraged their team to continue to build their relationships with people in other organisations across the region and nationally, will be the firms who are well placed to succeed as the upturn continues. On the other hand those firms which have battened down the hatches and become inwardly focused – either through laziness, arrogance or a lack of confidence – will find themselves with a massive uphill struggle.
The future will be brighter, but only with a clear vision, a lot of hard work and a bit of good fortune.
Graham Nicoll is regional centre head at Barclays Wealth and chairman of Birmingham Forward
