John Lefferts' Blog

Thursday, January 6, 2011


A lot has been written about the “Great Recession” and its impact on business; how ever since the economy was whip sawed in the fall of ’08 business growth and investment continued a free fall throughout ’09 followed by a year of paralysis in ‘10. This paralysis is particularly true in the Financial Services business. Following the malaise of ’08, firms that you would think would have to be acquired have remained status quo. And firms who you would have thought could go on an acquisition binge have done nothing at all. It’s been a waiting game. Wait for a free market minded congress to come into power. Wait for visibility on the tax rates. Wait for the direction Dodd-Frank regulations will impact the business. Wait for job growth to begin again. Wait for some semblance of certainty.

But now in 2011 it appears the waiting game may finally be over and what was unclear has come into focus…finally it’s GAME ON! Regardless of anyone’s social or political bent, there weren’t too many tears shed by business people when we saw Pelosi hand the gavel over to Boehner (expect of course by Boehner). Taxes are not going up, at least for now and after presenting their findings on the study on the harmonization of advisor and broker regs later this month, we should have a fairly good read on which direction the new SEC B/D-RIA regs will swing. And this weeks job report shows private sector growth for the first time in years. So, GAME ON…right? Back to business as usual?

Not so fast. The paralysis and deep freeze in the large financial services firms has been so great, it’s probably going to take a while to thaw out and get moving again. And when they do thaw out, some will be positioned to grow through reinvestment and acquisition. But many will likely find themselves no longer relevant. This has created an opportunity not seen before in my 25 yr+ career to create a new business model to emerge while the others remain paralyzed or continue their spiral towards irrelevance. Firms like HighTower, Dynasty, Cetera and Fieldpoint are hatching during this new era unburdened by legacy operations, structures and expenses- See: Wall St Old Dogs Try New Tricks  The landscape is ripe for many more like kind business models to emerge as the paradigm for what a retail financial services business should look like and how it functions has shifted.

For a new breed of forward thinking business leaders, change has presented a once in a lifetime opportunity…GAME ON! But for many of the others, I’m afraid most haven’t seen the ball since the kick-off. And from all indications, January 2011 is when this ball was kicked-off. I’m suited up and ready to go…how about you? GAME-ON!

PS-As painful as it is for me to say this...GO DUCKS! As a Lifelong OSU Beav, it's a tough thing to say, but I have to back the Pac-10. And the only thing more arrogant than a Duck fan is an SEC fan!

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