InvestmentNews Article: How COVID-19 is destroying small firms
My business partner and I began our firm in 1993 partly in response to the terrible experience we both had while working for an insurance giant with a non-client-focused approach to service.
After founding our firm, we remained proudly independent for 25 years, growing it from just the two of us to over 100 employees.
Two years ago, when we hit a growth ceiling, we decided to partner with private equity to keep expanding. While professionally, it’s been a great decision, we also benefited from fortunate timing.
Something tells me that COVID-19 is going to destroy hundreds of small firms; firms which are very much like we were.
Here’s why that’s going to happen and what principals of small firms can do about it.
The advisory business will probably never be the same.
While, thankfully, a vast majority of our lives will be spared from the virus, hundreds of advisory firms will not survive.
Even in the best-case scenario, say, the scientific community quickly develops a vaccine, it will still take months or years before the drug could be produced and all Americans inoculated.
The simple fact is that advisors and clients are not going to be sitting together for a very long time.
How does a financial advisor grow their firm in a world where we can’t meet with clients, earn their confidence and then discuss their personal financial plans?Scott Hanson, Co-Founder, Allworth Financial