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  • Writer's pictureDavid Miller

The Knowledge Doubling Curve

When I was young, and we were driving in the country one day, my dad told me about Buckminster Fuller and the idea of the “Knowledge Doubling Curve”. Fuller observed that until the year 1900, human knowledge doubled approximately every century. By the end of World War II, knowledge was doubling every 25 years. When my father had this discussion with me in the early ’70s, he told me knowledge was doubling every 12 years. I found that astounding and was excited to think of what would be discovered and revealed next.

Today, on average, human knowledge is doubling every 13 months. That rate will continue to increase exponentially. IBM theorizes it could someday become every 12 hours.

It is overwhelming to imagine.

The doubling of knowledge is just one of the fronts that we'll all be forced to confront over the next few years.

Combined with knowledge, technology is impacting us in ways that even the best sci-fi writers didn't imagine or conceive.

Technology is impacting every aspect of our lives and reconstructing most industries into an entirely new paradigm.

We could consider the fate of any industry and draw some alarming conclusions.

This blog is dedicated to the financial service industry, and particularly the retail financial advisors, who serve and develop long term relationships with the consumer.

We believe that the financial service industry is going through its most dramatic shift in the last 100 years.

It is the perfect storm—Government regulations by addressing fiduciary responsibilities and fees are spreading misconceptions and inaccuracies, artificial intelligence seemingly could replace all of us, rise of automated trading of ETF’s using robo advisors has gone viral on wall street, trading platforms have dropped their fees to zero, the aging population, the rise of a more tech savvy generation, and an aging advisor population which could leave us with no one to replace them.

We believe the confluence of all of these circumstances is going to seriously impact financial advisors and their incomes to the extent that there may be as little as 20% of the current advisors left in this business in 5 to 8 years.

At the same time, we believe this is the good news.

The advisors that survive, and as I said, this won’t be everyone, will have to have a process driven business with a clear and precise value. They will attract an ever increasing number of high net worth clients to their practice—fewer advisors means more high net worth clients per advisor. These clients will value what you provide and will be willing to pay for a professional, organized and structured service which gives them peace of mind and comfort.

For years, advisors have told me their ideal client or "sweet spot" is between $500,000 and $3 million in invest-able assets. They still tell me this. This target has moved and no one has noticed and yet there are countless families in America with $3 to $30 million that are not happy with their current advisor.

The solution is to create a business that is attractive to them. Be in a position where you are able to adapt to any changes that are coming to the industry. Look at and evaluate every interaction and communication you are having with clients. Build a business that is process driven; where you foster rapport and trust with your clients; provide scrutiny and oversight of your clients' entire financial situation, and apportion your time, energy, and money, and obviously allocation of their assets to ensure that your clients' goals and objectives are achieved.

Ultimately, a financial advisor must have the tools to create peace of mind and comfort for the client where they understand, recognize and appreciate the value the advisor is providing.

Build a culture of exclusivity and scarcity where the clients understand and appreciate the privilege afforded them when working with you.

Position your referral process as a service to the client as opposed to a favor to you. Every action, every individual, in your organization contributes to a steady stream of quality and qualified referrals.

Having systems and processes in place, and clearly defining your value, properly communicating it to clients, and creating exclusivity and scarcity, are key to your long term success; regardless of the competition.

You can’t stop the onslaught.

You can prepare for it, capitalize on the opportunity, and have a business that others only dream about.

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