Legendary nighttime talk show host Johnny Carson had an act back in the day known as “Carnac the Magnificent” where he mocked fortune tellers with jokes about how he could foretell the future. He would start by placing a “hermetically sealed” envelope up to his head and before opening it, like magic he was able to recite the answer to the question. They were at times funny but usually so stupid the audience wouldn’t laugh but groan at the slapstick styled jokes. Then after the audience would push back, he would come up with a one lined curse.
Carnac: “Until he gets caught” then opens the envelope with the question “How long does a congressman serve?” Carnac: “What does an alligator get on welfare?” Answer: “Gatorade” Then the audience groaned and he would curse them-“May a love-starved fruit-fly molest your sister's nectarines” or “May a weird holy man with a rash play with your face” Like I said, they were real groaners...but funny.
Joking or not, attempting to predict the future is a business pastime. From economists to consultants to bloggers like me, it’s simply tough to resist. After all, if one were able to really consistently predict the future with accuracy, they’d be successful beyond all dreams. And while an analyst may successfully predict the next bull market run or economist predict the next recession, over time, they’ll get it wrong more times than right.
Whenever the business endures change, it seems to bring out the prognosticators. Just over a decade ago in 1999, Mark Hurley, then with Undiscovered Managers, wrote a white paper that created a stir in the financial business. Keep in mind the environment in 1999 was one where Glass Steagal was being repealed, anything that had “.com” in its name was a sure bet and most economists were saying how “this time it’s different” believing the economic expansion would never end. Hurley back then predicted unprecedented consolidation in the financial services/advisory business to be dominated by handful of giant mega-firms with the scale, technology and support the smaller competitors could not afford to provide (ie-multiple Citigroup/Travelers/Smith-Barney styled giants). At the time, it seemed like he had set out the vision for the future of the business and I recall reciting the findings in speeches and seminars to support my bias towards the large firm I worked for at the time. But as often happens, no one can predict the future with complete accuracy. I was in Hurley’s office last year to get his take on where the business was headed (he’s a freak‘in brilliant guy) and I asked him what he would change if he re-wrote the paper today. His ego, admittedly large, wouldn’t let him say he got it wrong. While he didn’t get it entirely wrong, not all has panned out as predicted. But you have to respect someone who has the cajones and respect of peers to put out such a paper so widely followed.
This last month, another white paper has surfaced written by Bob Veres, a financial advisory/planning industry journalist. Like Hurley, Veres is also a gifted visionary in the business. I’ve been a subscriber to his newsletter “Inside Information” http://www.bobveres.com/ since the mid-90’s and while I don’t always agree with his point of view, I always find them thoughtful and well written. His white paper “The Future of the Financial Advisory Business:Opportunities, Challenges and Trends in the Second Decade of the 21st Century” is extremely thoughtful and does an outstanding job outlining where we’ve been and where the future of the business is headed (you can access the paper on his web site link above). Veres takes it in a different direction than Hurley correctly identifying that being a giant actually has disadvantages in the form of legacy costs, technology and systems. He envisions financial planning and advisory professional firms developing on a national basis like large national law firms with partners in every major city. Sign me up!
Like I did with Hurley just a decade ago, I also find Bob’s vision one that I can see and believe. And again, like Hurley, more than likely, he won’t get it all right. But he does lay out a future vision for the business as we slog through the middle of an unprecedented period of time searching for the new normal. And I am careful not to say “This time it’s different”.
“May the bluebird of happiness make a nest in your navel”