No business plans to fail but many businesses fail to plan. The enthusiasm to launch a new business or take a product to market is often not accompanied by a clear strategic plan. What is the value of a plan? In simple terms, a traveller would not expect to drive from London to Edinburgh without a clear road map (or appropriate satellite navigation!). What chance would they have of arriving in a sensible timescale without the guidance of a clear map or plan? In the same way, a business does not give itself the best chance of success if it fails to plan strategically and then communicate that plan to all of its interested stakeholders so it can be successfully delivered.

Many factors affect the performance of any business. External factors such as the prevailing economic environment and the outlook ahead, regulation, taxation and possibly the international geo-political situation are all “macro” factors that will set the scene for a business and create the climate within which it must operate. Other more “micro” factors, including the quality of the product or service, the unique differentiation over competitors, the capital available for investment, the resources required for the business and several other factors are all relevant contributions into a strategic plan.

In a wealth management firm, talent is possibly the greatest asset. And yet, there is often talk of the war for talent in the industry as firms compete with each other to attract the best and most experienced resources. Strategically planning for growth requires considerable focus on the talent required to deliver the growth and this should include training and development as much as attracting experienced staff from other firms. How to plan for growth, to recruit the resources required and to navigate the financial environment all take great foresight with copious quantities of flexibility and adaptability required from the leadership team.

In the current climate, artificial intelligence and greater process automation are increasingly important strategic issues in wealth management but their growing relevance also underlines the importance of knowledgeable and experienced talent in the business. The ability to attract the capability required and retain them is essential to a firm’s ambition to grow and develop its business.

The more time dedicated to a strategic plan, the better the opportunity that a business gives itself in achieving success. It is the duty and responsibility of the board and the business leadership team to create a strategic plan for a business and set the path ahead. Most strategic plans take a 3-to-5-year perspective for the business, they identify a set of objectives for the business to achieve that will ultimately define success and they include milestones along the path for the business to achieve to ensure it is maintaining the intended direction of travel towards success. In a fast-moving environment, it is essential to be alive to changing dynamics and be prepared to update a strategic plan on a regular basis. In general terms, an annual business plan will be derived from the medium-term strategic plan, so that the stepping stones are identified as the business makes progress towards delivery of the medium-term plan.

The best prepared strategic plans will include all possible factors that may influence the growth and development of the business and make assumptions for the known unknown factors as well as considering other issues that may affect the progress of the business but are not easily quantified. The more information that is considered from the outset, the better the quality of the finished strategic plan but there must also be an inbuilt flexibility to adapt for changing circumstances.

When completed, the strategic plan becomes a living and dynamic document. Quite simply it is the road map for the business. The value will be completely lost if it is filed in the bottom draw and only referred to once a year or so. It must be communicated to all parties within the firm who will be contributors to ensuring that the plan is a success, and the business achieves the objectives it has set itself. Shareholders, directors, and colleagues across the firm must all be brought into a full understanding of the intentions so that all parties work together to give the business the best possible opportunity to succeed.

Strategic planning in Wealth Management applies equally as importantly as in any business. In a highly competitive market the ability to identify unique factors of differentiation coupled with strategic foresight are arguably the key ingredients in preparing a business for success. In preparing a strategic plan, a wealth management business will rely on its board of directors to provide a blend of current day to day knowledge and understanding with a depth of experience provided by its non-executive directors.

The environment of the wealth management industry can be fast-moving with potentially unexpected and sudden change as a result of both national and international events. A change in one or more key financial elements can impact a business to its advantage or to its detriment. Back in 2008/09, not many wealth management businesses had planned for a global crisis, but that is exactly what happened when several institutions of great stature collapsed with ensuing significant damage to the financial system and the confidence of its participants. For wealth management businesses receiving value related income, the sudden drop in stock markets had a very damaging effect on their profitability. In situations like that, adaptability then becomes very important as the leadership team looks to adapt the business plan to reflect the prevailing external circumstances. Similarly, in recent times, the dramatic increase in the rate of inflation accompanied by persistent increases in UK interest rates over a 21-month period, will again have caused wealth management businesses to review their business plans and adapt to the changing environment. The short-term premiership of Liz Truss last year saw great and unexpected turmoil in the financial markets, with, again, an ensuing reaction for wealth management businesses.

No strategic plan will ever move smoothly in a straight line. However much foresight and experience are included in the development of a plan, there will always be bumps in the road that will create moments for reflection and which may require the plan to be adapted to the prevailing circumstances, while maintaining the relevant focus towards delivering on its objectives. It cannot be suggested that creating a strategic plan is easy but imagine what it might be like for a business without a plan, the journey might end before it ever gets started!!