Action! Magazine Articles | AdvisorEngine

Steal this framework when it’s time to conduct a strategic business review

Written by Luis Ochoa | May 17, 2023 4:00:08 PM

Developing a well-rounded understanding of business performance is a key responsibility for any senior leader.

Strategic Business Reviews (SBRs) are a powerful way to engage department heads to see the implications of their works on the broader organization and articulate the “how” behind the “why” a business is in business in the first place.

These executive-level discussions center on the track record of the business to date, the current position of the business vis-à-vis changing industry dynamics and technology innovation, and highlight in-flight initiatives designed to achieve long-term goals. SBRs cover specific capabilities or a set of offerings, such as private banking (ex: checking and savings solutions and cash management).

These conversations can take place either monthly or quarterly, matching the cadence of financial reporting while identifying the implications of how the business is funded and the results of that funding. SBRs begin with the goal in mind: (1) gain confidence in the strategy for the business and (2) make the case for growth funding.

Wealth management firms can apply SBR’s directly to improve much of their day-to-day operations and even help refine their client interactions. Some examples:

Client Acquisition: A strategic business review can help financial advisors evaluate their current client base, analyze their strengths and weaknesses, and develop a plan to acquire new clients. The review can help the advisor identify new markets and develop strategies to reach potential clients.

Service Offerings: A strategic business review can help financial advisors evaluate their service offerings and identify areas where they can add value to their clients. The review can help the advisor identify new products or services to offer to their clients and develop a plan to implement them.

Revenue Growth: A strategic business review can help financial advisors evaluate their revenue streams and develop strategies to increase their revenue. The review can help the advisor identify new sources of revenue and develop a plan to implement them.

Technology Implementation: A strategic business review can help financial advisors evaluate their technology infrastructure and identify areas where they can improve their efficiency and effectiveness. The review can help the advisor identify new technologies to implement and develop a plan to implement them.

Risk Assessment: A strategic business review can help financial advisors assess the risks in their business and develop contingency plans to mitigate these risks. The review can help the advisor identify areas of potential risk, such as regulatory changes or market volatility, and develop a plan to address them.

If you’re ready to conduct an SBR, here’s some of the initial information you’ll need.

Finance:

  • Recent reports for the past three time periods, including composition or breakout of major revenue and expense categories
  • List of key performance indicators with trend details

Strategy:

  • Catalog of in-flight initiatives, including summary descriptions, target outcomes, and timing
  • External industry research, consulting whitepapers, or equity research [initiation] reports
  • Benchmarking studies/analysis

Operations:

  • Organizational charts or mapping of team structure, historical headcount
  • Surveys or reports from client advisory board(s) or case studies on client feedback

Whether you are attempting to align your organization’s goals and objectives, identify strengths and weaknesses or opportunities for growth, having a systematic approach will focus your firm on achieving its goal. 

Make sure to download the accompanying checklist with this article to help your team formulate your SBR plan.