The Power of Platforms and Networks

In a enterprise atmosphere with accelerating charges of change, the facility to compete and win is shifting radically from firms to ecosystems, from leveraging inner property to accessing exterior networks, from a standard working deal with effectivity to dynamic open innovation. Welcome to the Collaboration Financial system and the brand new supply of aggressive benefit for companies that wish to thrive in our new enterprise local weather. 

With many cross-industry projections saying that we’ll see extra change and innovation within the subsequent three to 5 years than we’ve seen previously thirty years, companies have to be much less insulated and turn out to be extra synergistic. Nobody firm and administration workforce in isolation can virtually sustain with the hyper-changing complexity of our trendy enterprise world.

Companies must leverage their data and experiences with others combating the identical battle or addressing related challenges. Deeper connections have to be shaped between companies that may result in an ecosystem of assets constructed on mutual pursuits. These ecosystems are inclined to operate as open platforms including substantial new capabilities to all. It’s now as much as how companies can creatively join with each other that determines how profitable they are often. This places a complete completely different spin and a brand new actuality on what “networking” actually means and the way it’s being strategically utilized to satisfy right now’s challenges.  

Greg Satell, a metamorphosis and alter professional, prime innovation blogger and bestselling writer of Mapping Innovation and Cascades: Find out how to Create a Motion that Drives Transformational Change, has performed intensive work in exploring and writing about this new enterprise dynamic of platforms and ecosystems. His weblog is a superb useful resource on the subject and the mindset that you must benefit from this development: 

“In an age of disruption, the one viable technique is to adapt….The target is not to claw your method to the highest of the heap, however to nudge your method to the middle of the community…..Profitable enterprises can not prosper merely by deploying property effectively, however should successfully handle and deepen connections… In a networked world, one of the simplest ways to turn out to be a dominant participant is to turn out to be an indispensable associate.” 

To dig deeper into the mechanics and technique of constructing your organization right into a platform and growing an ecosystem, we reached out to Institute Founding Member, Mark Spina, president and COO of FLX Networks – a monetary providers know-how platform and membership group. FLX is actively constructing a “community of networks” via their new group platform which is designed to revolutionize the working relationship and expertise that happens between asset managers, monetary advisors and wealth administration companies. We requested questions to higher perceive how platforms may also help us entry know-how, expertise, present insights and strategic companions and the way this could dramatically change the methods we are able to efficiently compete in our quickly altering {industry} atmosphere. 

Hortz: What had been the strategic selections behind constructing your agency as a platform? 

Spina: The monetary providers {industry} faces a generational transition away from its conventional engagement mannequin, which has been interruption-based and closely depending on this high-cost implementation mannequin, grudgingly accepted by the asset managers together with their target market of wealth administration companies and advisors. A cross-current of macro occasions, together with the pandemic, technological innovation and regulatory evolution have created the required momentum for a extra invitation-style of engagement and expertise to be launched via a group platform.  

Importantly, the aggressive pressures are transitioning the {industry} from sourcing a myriad variety of specialised enterprise options and vendor companies to searching for strategic companions that may consolidate and combine the numerous assets now accessible. Merely put, specialization has delivered many unimaginable progressive options, nevertheless it has additionally delivered rising prices (resulting from extra instruments and providers), advanced tech stacks, and an awesome variety of vendor relationships. Each asset managers and wealth managers search scalable relationships that creatively serve their enterprise wants, whereas lowering the variety of partnerships and time required to take care of them. 

 Hortz: How does a platform construction will let you handle the challenges you see dealing with monetary providers companies? 

Spina: FLX Networks’ purpose-built know-how platform is designed to create a extra economical and sustainable distribution expertise with much less friction and inefficiency between asset managers, wealth administration companies and monetary advisors. Via our proprietary know-how, we’ve constructed a group platform that gives entry to a enterprise providers market, an aggregated open-architecture asset supervisor content material market, an asset supervisor alternate and a social community facilitating the sharing of related skilled practices and experiences.    

Every vertical of our permissions-based platform permits entry to a mixture of instruments, personnel, know-how, strategic relationships and merchandise to assist drive a more cost effective, on-demand and sustainable enterprise mannequin. Our strategy concurrently delivers the size of the most important firms within the market right now. 

Hortz: Now in your second 12 months of growth, what are you studying in regards to the dynamics of constructing a platform? 

Spina: The important thing studying is a meta studying of types – sitting on the middle of a community creates a terrific vantage for constructing a platform. The challenges and tendencies are simpler to see. I do know you’re a fan of Greg Satell, the transformation & change professional. He states it so effectively: “We are able to not depend on controlling and leveraging property, however now should have in mind new sources of energy, which reside not on the prime of hierarchies, however on the middle of networks.”

Whereas we clearly see the facility of building a community centered between asset managers, wealth administration companies and advisors, every community participant comes with its personal issues and priorities. The necessity for educating members in regards to the potential of this new community has been each a key studying and driver of our succession. 

Hortz: How do you then construct the platform right into a functioning group and what are the advantages?

Spina: At its launch, FLX supplied asset managers entry to a market that supplied modular and on-demand distribution options. As a member of FLX, asset managers acquired a group web page that served as a central location for the asset supervisor to put advertising and marketing content material, product coaching and pertinent agency data. Asset managers might then search via the assorted marketplaces inside the platform and leverage groups of skilled gross sales personnel, in addition to gross sales management, gross sales infrastructure, know-how instruments, advertising and marketing, web site growth, and so forth. The curiosity on this distinctive strategy was speedy, and the agency executed on its first capital elevate.    

COVID-19 reworked the world and financial system as we knew it. This crucible second led to a second key ingredient of constructing the platform right into a functioning group. FLX enlisted the purchasers of asset managers (i.e., wealth administration companies and monetary advisors) to additionally turn out to be members of FLX. FLX recognized each a bottom-up and top-down technique designed to create gravitational pull to a newly established group. It was right now that FLX aggressively pursued the event of a group the place asset managers, monetary advisors and wealth administration companies would really feel compelled to go to and leverage instruments, providers and assets to simply entry data, cut back noise and improve productiveness.    

Hortz: What’s your plan and standards for rising your FLX Options Trade in your platform? 

Spina: The FLX Options Trade has additionally confirmed to be an space with important learnings up to now and forward-looking alternatives. In some ways, it’s a microcosm of beginning and constructing a enterprise in an unconventional means. Now we have plans to develop our FLX branded Options, strategic partnerships and selectively broaden the vary of companions on the platform within the close to to intermediate time period.    

Importantly and in another way as we transfer the corporate into 12 months three, we see Distribution or “Shared Consumer Engagement Groups” as one of many Options accessible.  Based mostly on our modular strategy the Shared Consumer Engagement Groups are routinely paired with a set of Options that finest match the Asset Supervisor’s wants. For companies that had been traditionally centered on institutional, various or worldwide markets and are actually coming into the U.S. advisor and middleman market, we routinely seek the advice of them to first guarantee product readiness and promote model consciousness, leveraging the fractional providers of our Options capabilities, then layer within the personnel. 

From a strategic partnership perspective, we’re selectively participating throughout a number of domains. Once you see and consider within the energy of the community, these domains embrace AI, knowledge, advantages, together with entry to {industry} associations and wealth administration companies. Whereas different companies have constructed well-developed networks to help the monetary advisor of their engagements with the buyer, we’re centered on the B2B “area in between” asset managers, wealth administration companies and advisors within the U.S. The U.S. market alone is a $50 trillion product market, and it takes about $50 billion yearly to make that market operate from gross sales, advertising and marketing and knowledge views. We even have worldwide plans on the close to horizon, eyeing markets with comparatively giant advisor markets together with Canada, U.Okay. and Australia.

Hortz: Another ideas you may share with monetary professionals on how B2B digital platforms like yours may also help them evolve their conventional means of doing enterprise? 

Spina: Sure. Take into consideration nearly each different shopping for and promoting expertise, each B2B and B2C. They’ve modified meaningfully over the previous 5 to 10 years, principally to an on-demand setting aided by subject material specialists at key decision-making or inflection factors. We see these tendencies and are catalyzing the identical expertise for the wholesale distribution market.

So positively, we see and discuss with executives from such all kinds of companies, cutting-edge boutiques to dominant gamers, every intent on rising their enterprise. The conversations are going down with asset managers, wealth administration companies, giant RIAs and advisor groups. In an oversimplified kind, we see leaders beholden to the legacy model of issues after which these prepared to embrace or at minimal, experiment with a brand new strategy.   

For instance, most readers can very readily recall their experiences with wholesaling, from completely different lenses and angles.  Whereas we’ve been saying this for just a few years, even previous to Covid, it’s now clear that there can be significant change going ahead.  We’re going to assist by “innorupting” (innovate/disrupt) the established order. A technique is thru making a Digital Wholesale Market. 

This premier digital wholesale market, as we envision, is the place advisors via the overall group or via a white-labeled wealth administration group, tailor-made for his or her respective agency, can entry all of the significant asset supervisor content material, insights, thought management and funding product data. Individually, asset administration gross sales groups can seek for advisors and determine their engagement preferences and desires. The detailed profiles supplied by each member of the FLX group enable them to share pursuits, profession expertise, product wants, service wants and desired type of engagement (i.e.– telephone, in-person, electronic mail, and so forth.). The profit is to simplify, personalize and customise the engagement expertise.  

Hortz: Any suggestions on how monetary companies can reinvigorate themselves in platforms and being a part of a community? 

Spina: Sure, whereas there are numerous choices, a few ideas repeatedly reveal themselves to us as aggressive drivers.   

Now we have been speaking about creating “Artificial Scale” as a method to reinvigorate or higher compete. Scale has been a driving goal for a lot of within the asset and wealth area.  As a choose group of companies have achieved that aim and gathered large scale, it’s made it more difficult for others to compete. By becoming a member of a group and leveraging the shared options and shopping for energy of the group, companies and even enterprise items can forge a path to progress.  

Now we have additionally inspired companies to experiment. Whereas effectively worn, the expression that “doing issues the identical means and anticipating completely different outcomes” remains to be very a lot an working perception of many companies. Whether or not it’s a big experiment or small one, we see important worth in making an attempt new approaches. This may run throughout a complete enterprise, a subset, a product kind, a channel, a geography or some mixture thereof. The chance to experiment abounds. 

The Institute for Innovation Improvement is an academic and enterprise growth catalyst for growth-oriented monetary advisors and monetary providers companies decided to steer their companies in an working atmosphere of accelerating enterprise and cultural change. We place our members with the required ongoing innovation assets and finest practices to drive and facilitate their next-generation progress, differentiation, and distinctive group engagement methods. The institute was launched with the assist and foresight of our founding sponsors – Ultimus Fund Options, NASDAQ, FLX Networks, Pershing, Constancy, Voya Monetary, Advisorpedia, and Constitution Monetary Publishing (writer of Monetary Advisor and Personal Wealth magazines).

The views and opinions expressed herein are the views and opinions of the writer and don’t essentially replicate these of Nasdaq, Inc.