Why You Need to Change Your Game


Last year, I heard Robbie Bach speak at a carrier meeting. His story stuck with me – it might stick with you, too, and inspire you to change your business model for a post-fiduciary world.


If you’ve never heard of Robbie, he’s the former leader of Microsoft’s Mobile Entertainment and Device division and was responsible for developing and bringing Xbox to the market. The console was eventually a success, but at one point, Robbie thought about resigning. He’d lost nearly $6 billion and was unable to penetrate the Japanese gaming market.


To better fit his market’s wants and desires, Robbie created an interactive, subscription-based business model. For a set price per year, players could not only access Microsoft’s games, but they could also see and hear the other players around the globe via headsets and cameras. No other game allowed that level of interaction before. 


The results were outstanding. In a short period of time, Robbie’s division went from billions in losses to a $1 billion profit. Even more impressive was their penetration of the Japanese market – Xbox earned a nearly 10 percent market share when no one had been able to earn more than 1 percent. His tweak in the business model and addition of value created a sustainable growth trajectory for the division. 


What’s Your Game Plan?

In the post-fiduciary world, a proper business model will be critical to your success. I think it’s the biggest decision you’ll have to make as you prepare for the move toward a fiduciary-based practice. 


You’ll need to either move up market, or become more efficient in your current market. Neither option is right or wrong – you just need to be crystal clear in your decision.


  • If you move up market, how will you address the concerns and needs of higher net worth clients? Wealthy individuals tend to have access to better health care, so their longevity needs will be different.  Wealth transfer and taxes may be a bigger part of their planning process. Is your model set up to deliver those types of services as a holistic package?

  • If you stay in your current market, how is it changing? Industry reports indicate more than $600 billion in assets will shake free from large wire houses and banks that have less than $100,000 in account values. That’s a lot of assets you could capture, but efficiency will be critical to success. Do you have the right vendors for technology, software and applications to deliver products and services to these clients? 


Winning Strategy: Review your business model and make sure it sets you up for success. No model is superior to another, but the model you choose has to be right for you and your clients. 

Mike McGlothlin is a tireless advocate for the retirement planning industry. As executive vice president of annuities at Ash Brokerage, he heads a team providing income planning solutions focused on longevity and efficiency. He’s also a thought leader who provides guidance and assistance for advisors and broker-dealers navigating marketplace and regulatory changes. You can find a collection of his blog posts in his book, “Above the Clouds … Winning Strategies from 30,000 Feet.”

DOL Fiduciary Business Model Practice Enhancement