A Formal Process…
We’ve all heard that systems increase a practice’s efficiency. But there never seems to be enough time in a day and often the principals are the ones who guide the system so their input is needed in the creation of any formal process. If financial planning is a core offering in your practice and you do not yet have a formal process, make it a priority to create one.
Start off with the key players. Who is it that is involved in the client’s plan and how high-touch are they? One or more principals? A junior associate? An assistant? All of you? Next review your current process and pricing. Should you use this opportunity to create a more efficient process? Should you evaluate what other planners or advisors are offering? Are you plans profitable? Do you know how many hours it typically takes to execute a plan?
If you have been offering plans, you are likely to have a data-gathering system that you utilize on the initial meetings. Does your staff know specifically what you need to collect? Do they follow up with the client to collect the data or does a principal take it in from a client? Are your initial meetings with a lead advisor or do you have an assistant in the meeting as well?
Tailoring your plans…
Offering financial plans, especially ones which are tailored to a high net-worth clientele are typically much more time consuming than offering investment advice. Studies show that clients of investment advisory firms want holistic direction and advice from their advisor. If you are new to offering financial plans, then you have a clean slate. Pricing your plan becomes the challenge as you do not yet have data on the time it will take.
If offering plans and charging for them have become part of your standard practice, do you know if they are priced appropriately and are they profitable? You may want to look back through your CRM (contact relationship manager), your calendar or whatever other tracking tools you use to see how much time the last plans you executed actually took your entire staff. It is often difficult to add up the quick email communications, the short phone conversations over small details, the staff’s interaction for follow up, rescheduling, copying data, storing data and more.
One suggestion for tracking is an application on your smart phone to capture your time even if you set flat billing. If you have your smart phone handy it is easy to record a phone call, email, visit or planning meeting with your staff regarding a specific client. By tracking the data over a period of the course of producing a formal plan, you will get a sense of whether you are charging appropriately for your time.
Tracking your staff’s time can be done via your office’s CRM and added up on a quarterly or annual basis per client. You may be surprised to find out how time consuming a financial plan really is for your entire office.
However, building a solid relationship with your client and getting to know all of their present and future personal objectives and financial needs is a great way to bring in additional business. You may get rewarded by managing assets, new referrals or compensation from insurance if you are licensed. Most financial planning clients also need referrals to trust & estate attorneys, new CPA’s, possibly business valuation firms and a host of other specialists. These specialists may also be able to refer business back to you.
Document the process…
Outline the process from the initial meeting, creation of a proposal, the follow up closing meeting, initial data gathering, projections and recommendations for action steps. Depending on the sophistication of your practice and your clientele, it can make sense to bring in an outside planner to assist in execution, especially if you have a complex client situation.
The more systematic your data collection this will lead to a better process and greater efficiency of delivery. Some planners expect the client to fill out the data worksheet by themselves. This may seem efficient but my experience is that you will only delay execution as the client procrastinates. Provide a list of documents for the client to bring in and collecting the data in person is much faster in most instances.
Having an assistant or junior planner in the initial meeting is cost-effective. You have a second team member who is privy to the client’s concerns who can also recap the meeting formally afterwards. The second person can also collect the documents which need to be copied or stored in your system themselves or delegate to another assistant. But you need to spell this out in your process so everyone is clear on their role and the replication of the process follows.
After data gathering, you should formalize recording the client’s overall situation, concerns and major goals. This helps to allow other team members to execute with knowledge. Data now needs to be entered into whatever planning software you utilize. This is where an outside resource can play a role. With data captured, documents stored and a recap executed, an outside experienced financial planner can enter the data and be ready to launch a webinar to allow the client to see the results. The outside planner does nothing but enters data and run scenarios so they are very efficient. They provide and maintain their software and are very familiar with how to enter data and project scenarios so you do not have to spot check entries as you may with less experienced internal staff.
A launch of a webinar allows the clients to focus on their future. You and they likely planned on an initial scenario with timelines and costs for major events. By launching a webinar with an experienced planner, you may make changes and run other scenarios for the future to allow the client more options.
Do you wish to print the results of this webinar or do you want to offer the client more flexibility and re-run those scenarios later in the year? Are you and the client ready for action steps? Will you interact with the attorney, CPA, business coach, valuation specialist or any other professional to assist the client in executing action steps? Or would you print the plan, provide the list of required action steps and expect the client to implement? All of your preferences should be documented in a system.
How will you follow up to see if the client executed your recommendations? Other than asset management and insurance, the advisor may not have control of the rest of the process. Each practice varies in their approach to planning. But the key to success is having a documented execution strategy which you entire team knows about and is following and amending needed. This will increase efficiency, allow you to measure results, track the time needed to execute and therefore price the plan appropriately.