By Spenser Segal, ActiFi CEO

I was at the FPA Business Solutions conference last month and thought that it was an excellent conference. There were many informative speakers who shared some very practical ideas. One thing I kept thinking about was how advisors were going to actually execute and leverage these ideas and concepts to bring value to their clients and their business.

When working with clients, we use the following model to help our clients conceptualize how to look at information and good ideas. The model is as follows:
Data => Information => Knowledge => Behavioral Wisdom

This model has been used in many forms. The most useful way to use the model is to understand the challenge of moving from the left to the right, with the biggest gap being moving from Knowledge to Behavioral Wisdom. There is an overabundance of data and information floating around and it is impossible to process it all. What remains difficult, but nevertheless achievable, is people’s ability to change their behavior and adopt new behaviors in a consistent and effective way.

What struck me at the conference was how much great information and knowledge is available to advisors and how little of it is effectively implemented. One of the things that I am personally committed to and want to see happen is for more advisors to adopt powerful ideas and information into their practices. In this difficult environment, it is critical for advisors to build better businesses and deeper client relationships. Now is the time to adopt this model and focus on developing behavioral wisdom so that the proven concepts and ideas actually benefit our clients and all the advisory businesses out there.

In order to effectively do this, advisors need to recognize how difficult human behavioral change is and balance the resources they allocate to implement new ideas. Many times advisors buy a new software package or instruct their staff to implement a new idea in their business, but do not spend the time to understand the impact on their processes and more important, the impact on individual employees’ job responsibilities.

A balanced approach to implementing new ideas involves spending approximately equal amounts of time on evaluating and purchasing technology or the idea, documenting and understanding the impacted processes, and change management as it relates to the specific employees who will be impacted.