The 2024 Priorities for CEOs

Amar Pandit , CFA , CFP

Amar Pandit

A respected entrepreneur with 25+ years of Experience, Amar Pandit is the Founder of several companies that are making a Happy difference in the lives of people. He is currently the Founder of Happyness Factory, a world-class online investment & goal-based financial planning platform through which he aims to help every Indian family save and invest wisely. He is very passionate about spreading financial literacy and is the author of 4 bestselling books (+ 2 more to release in 2020), 8 Sketch Books, Board Game and 700 + columns.

In December 2023, McKinsey published an interesting report – What matters most? Eight CEO priorities for 2024. I thought some of the points might be useful for you. Since it’s 95 pages long (and considering your time constraints), I decided to share some priorities (mentioned in this report) in the context of our industry.

The authors start the report with the following – “What matters most? It’s a question we have been grappling for a few years now. One of our commitments is to CEOs. It’s a tough job and getting tougher all the time. Just in the past few years, they have had to cope up with a global pandemic, busted supply chains, war, stubborn inflation and many other disruptions. Any one of these is enough to derail a CEO’s agenda. Taken together, it’s the most difficult operating environment we can remember.”

The same is true for our industry/profession.

In our fast-paced financial landscape, the true measure of a firm’s vitality and longevity is organic growth, yet it remains one of our industry’s most pressing challenges (globally). On the surface, the increase in Assets Under Management (AUM) and rising revenues may paint a picture of prosperity, but this is often a mirage of success. Beneath the gloss of these metrics lies the stark reality that most firms are not growing their ideal client base or expanding wallet share.

Simultaneously, we are witnessing a seismic shift in consumer expectations. Today’s clients are more informed, discerning, and demanding than ever before. They seek transparency, value, and a level of service that not only meets but anticipates their needs. The failure to adapt to this new client profile can lead to a disconnect that erodes the very foundation of client-firm relationships: trust.

The competition for clients has intensified, reaching levels that were once unthinkable. Firms are no longer simply competing with their traditional counterparts but are also facing the burgeoning trend of FinTech platforms. Even Bank CEOs are worried about this trend globally. Many of these platforms have widened the trust gap (by using direct plans of mutual funds as loss leaders to showcase cost savings as value delivered), making it increasingly difficult for traditional firms to foster strong client relationships. The result is a noticeable shift, with clients gravitating (in the absence of real value delivered or even understood when delivered) towards the autonomy offered by direct models.

Additionally, regulatory changes are sweeping through the industry with unprecedented velocity, outpacing firms’ ability to adapt and often hindering their growth strategies. The agility to navigate this regulatory labyrinth is no longer a luxury but a necessity for survival and growth.

Compounding these issues is the acute shortage of skilled professionals in the financial services industry. This dearth of talent creates a bottleneck for innovation and growth, as firms struggle to find individuals who can drive forward-thinking strategies and connect with the modern consumer. This is a talent industry but just look at the talent within most firms today. This brings me to yet another problem facing all of us – succession.

In short, for a firm to truly grow and not just swell with misleading indicators, it must navigate regulatory complexities, meet evolving consumer expectations, bridge the trust deficit in the face of fierce competition, craft an outstanding value proposition for an ideal client base, become specialists within a niche and above all, attract and retain the right talent to propel its vision. Only then can a firm transition from the illusion of growth to the reality of it.

Let me now share the three priorities from the McKinsey report that we must pay close attention to.

1. What’s your Superpower?

“Think of any company you admire, and you can probably rattle off one or two superpowers that make it uniquely successful. Toyota and its Toyota Production system. Disney and imaginative customer experiences. LVMH (Moet Hennessy Louis Vuitton) and it’s exquisite craftsmanship and the entrepreneurship of its brand leaders.”

Here are a few examples in the context of our industry:

Personalization Wizards – Like a master tailor crafting a bespoke suit, these firms excel in creating highly personalized financial life plans. They use technology and human insight to understand the subtleties of each client’s financial situation, aspirations, and risk tolerance, providing a tailored fit to individual needs.

Client Experience Architects – By curating exceptional client journeys from onboarding to ongoing engagement, these firms make every interaction count. They build trust and loyalty through seamless, client-cantered experiences that combine the best of technology with a human touch.

Technology Trailblazers – Embracing cutting-edge technology, these wealth firms offer innovative tools and platforms that redefine investing, from AI-driven chatbots to advanced data analytics capabilities.

Risk Management Maestros – These firms have the superpower of turning risk management into an art form. They are adept at identifying, analysing, and mitigating financial risks before they become issues, ensuring that their clients’ portfolios are both resilient and robust.

Wisdom Guides – These firms go beyond just investing; they empower clients with financial wisdom in this ever-changing landscape. They offer workshops, webinars, and resources that demystify the complexities of personal finance, enabling clients to make informed decisions.

Legacy Builders – Specializing in estate planning and intergenerational wealth transfer, these firms are the architects of legacies. They ensure that their clients’ wealth benefits not just the current generation but also those that follow.

Sustainability Superheroes – With a focus on socially responsible investing, these firms help clients align their financial goals with their personal values. They have the superpower to identify and invest in companies that are leaders in sustainability, ethical practices, and positive social impact.

Each of these superpowers, when leveraged effectively, can significantly enhance the value proposition of wealth management and financial advisory firms to their clients.

What then is your superpower?

It can be your unique one.

But can you articulate it clearly? Even more crucial, would your clients be able to recognize and attest to this distinctive trait?

Here’s a quick test – Ask ten of your top clients – What is it you think I do for you?

2. How to outcompete with technology

As the digital era enters the middle age, most companies have at least started a digital and AI transformation. But few are getting the results they want; that’s usually because they haven’t done the fundamental organizational rewiring needed to extract maximum value from the hard work of digitizing the enterprise.

The same is true in our industry as well…For many, digital is only about facilitating transactions, access to products and operations. We don’t think in terms of client onboarding experience, our first meeting client experience, an integrated view of data (having data stored at one place instead of being scattered among the various products in the tech stack), data analytics, the holistic client journey and all the other parts of the business that can benefit.

It’s time for a fresh look at how we use technology every day. We need to rethink how our clients connect with us and the tools we use. Let’s simplify and improve our workflows, our processes, and the way we serve our clients to new standards of excellence. It’s all about making things simpler and better for everyone.

3. Navigating the road to courageous growth

 “It’s a funny thing: growth is always job one for CEOs (are you doing this job well for your firm), but the path to get there is never clear. Sometimes it’s about seizing market share; sometimes it’s about expanding into new markets; sometimes it’s about making a left turn into something completely new. The one constant is the ten rules of growth (another post). For many it will mean rule 4: turbocharge your core, by using technology to power your growth. For others it might mean rule 6: grow where you know, by improving sales productivity.

While turbocharging your core by using technology should be your priority for 2024, the other place to make a real impact is Sales productivity. It’s the need of the hour for all of us. This can be evaluated with different ratios some of which are such as wallet share, ideal lead conversion ratio, average deal size, revenue ratios, and many other numbers. The sad part is that many of us don’t have a clue of what these numbers are for our firms. Do you?

In the face of relentless change and unforeseen challenges, the role of the CEO continues to evolve. As we step into 2024, the above insights not only shine a light on the path ahead but also offer actionable priorities that can be the difference between merely surviving and truly thriving.

Embracing your firm’s superpower, harnessing technology to outcompete, and charting a bold course for growth are not just strategies; they are imperatives for success. As leaders, we must be as agile as the technology we employ, as visionary as the growth we seek, and as unwavering as the trust we aim to build with our clients.

Let us take these insights as a clarion call to action. By understanding and implementing these key priorities, we can align our efforts with the most significant opportunities and challenges of our time. It’s about recognizing our strengths, capitalizing on technological advancements, and boldly pursuing growth with courage and clarity.

As we close this discussion, reflect on the superpowers within your firm. Consider the technology at your disposal and the growth strategies that will define your future. Ask yourself not just how to adapt, but how to lead the charge in this dynamic financial landscape.

May we all harness the potential of these priorities to write a story of success. Let’s make 2024 a year where we not only reach our goals but set new benchmarks for what can be achieved in our industry and our profession.