Maister broke the service industry into three categories to differentiate between professionals and technicians. Gadenne adapts those categories for the financial services industry:

Brains: Advisors who perform client tasks that are at the creative edge of their practices and deal with unique projects that require fundamentally different customizations from client to client. Firms in this group have a narrow organizational structure with a few employees supporting top-level advisors.
Gray Hair: Advisors who deal with issues that are similar to what they have seen before and consciously work to leverage and to scale up their past experiences. These firms have many entry-level employees supporting a few top-level workers.
Procedural: Advisors with well-defined and well-specified client tasks who seek to deliver services in the most timely and cost-efficient manners. Procedural types of firms have several tiers of employees.

One way to determine where a firm falls on the spectrum is to count how many services the firm provides that are diagnostic, compared with how many involve execution. A firm that requires more diagnostic tasks to operate falls in the brains category, Gadenne wrote, while one that uses more execution tasks is a procedural firm.
"Retirement planning is not an exercise in illustrating long-term perfection — instead, it is an ongoing effort to discover the most tolerable imperfections," he said.
To be successful, according to Gadenne, firms need to model themselves after other firms in the brains category.
"Developing customized, diagnostic-intensive retirement plans to create monthly retirement income will lead to new forms of professional tasks, new demands for professionals and new categories of professional services firms," he says. "As delivering reliable near-term outcomes becomes more important than managing longer-term probabilistic expectations, clients will seek retirement planning institutions and individuals who are successful in managing professional and technical talent as well as client relationships.

Instant Insights /

Financial advisors must be retirement 'managers': Gadenne

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