No matter how you slice it, running any business is a team effort. But unless you’re assembling the right team, delegating work properly, and optimizing your time as team leader, you’re undermining the effectiveness of every facet of your business, from sales and marketing to client retention. In other words, you’re earning and growing less than you could be due to poor practice management.
For financial advisors, having the right practice management strategy in place is as crucial to success as having the right marketing strategy and the right sales strategy. You should think of practice management as the vital “third leg of the stool” when it comes to the ingredients necessary to achieve consistent, sustained business growth year after year. Each of these ingredients should be separate to a certain degree but also intertwined. In other words, the most effective sales and marketing strategies often depend on well-coordinated and well-executed practice management processes.
In this blog, we’ll share some insights to help you determine whether your practice management strategy is as strong as it should be, along with some tips to help you start building the kind of strategy it takes to truly maximize your growth potential.
What is practice management for financial advisors?
Simply put, practice management refers to the day-to-day functioning of your business in all areas. For financial advisors, the most important areas of focus include:
- Appointment setting and marketing coordination
- Client Services
- New business
- Office operations
The primary goals when it comes to practice management are to have a strategy that positions or “postures” as an elite, highly sought-after professional, and that allows you to devote most of your valuable time to do what you do best: serving the needs of existing clients and meeting with prospective new clients.
These goals are closely related, of course, and the key to achieving them lies in building and maintaining a strategy that includes certain essential steps and ingredients, which include:
- Assembling a “superstar” team
- Staff training and management
- Maximizing office efficiency and productivity
- Optimizing resources
- Setting goals and tracking metrics
- Creating the ideal office environment
- Creating the “wow” experience for clients and prospects
With this in mind, let’s focus on each of these areas one at a time.
Assembling your “superstar” team
Once again, running a business is a team effort, and if you want the best business you need to assemble the best team. That starts with the all-important task of hiring. Start by carefully evaluating the position you’re looking to fill. Confer with existing team members to get their input. Approach the process with the mindset of filling a need, not a desk. Create a profile of the ideal candidate to fill that need. Now, draft a job description for that exact candidate. The more precise you are with your job description, the less time you’ll have to waste interviewing candidates that aren’t a good fit. With multiple qualified candidates to choose from, the interview process will enable you to determine which one is best suited to join your team. For most advisors, key team members should include:
- Client Service Representative
- Marketing Coordinator
- Appointment Setter
- New Business/Bookkeeper
- Staff training and management
Probably every financial advisory practice has certain policies and practices that are similar, but at the end of the day, they have more differences than similarities. With that in mind, even the most experienced new hire needs extensive training in your particular policies and practices. Ongoing training, coaching, and cross-training are necessary to stay abreast of changes. Depending on the size of your staff, you may have department managers in charge of some training duties and of managing their own teams, but it still falls to you to make sure your managers are always up to speed. If you’ve hired the right people, they will make that easy for you, and you’ll feel comfortable delegating — which keeps you free to focus more on serving clients, attracting new clients, and growing your business.
Maximizing office efficiency and productivity
Delegating the right jobs to the right team members is also an important key to maximizing office efficiency and productivity. Generally, these are some of the tasks an advisor should always be delegating:
- All paperwork
- Client service calls
- Appointment setting
- Non-money-making appointments
- Personal errands
Other steps you can take to maximize efficiency and productivity include the following:
Clear out logjams in the workflow: Also called “bottlenecks”, a logjam is anything that slows or even potentially stops your team’s forward progress. A logjam could be caused by any number of things: a poorly functioning department, a complex process that could be simplified, conflicting messages, or outdated software, just to name a few. Work with your team members to identify logjams and find solutions to clear them away as quickly as possible.
Avoid micromanaging: As noted above, hiring the right team members means you should feel comfortable delegating responsibilities to them with full confidence they’ll do the job right. That should eliminate the potential risk of micromanaging, which can severely undermine efficiency and productivity. When you micromanage, you give the impression that you don’t trust your team members to do their jobs effectively, which can negatively impact their confidence and motivation. If you’ve hired a superstar team and they’ve been trained well, they’ll appreciate the right level of autonomy and work hard to justify your trust.
Use the right tools: If your team is struggling to meet deadlines or monthly goals, the problem could be related not to their work habits but to their tools. Outdated equipment or software applications could be slowing them down. Solve this by conducting — with the help of the right team members—a regular review of your equipment and applications to make sure they’re still up to par. New tools and processes aimed at improving office efficiency are coming out all the time, so it’s important to keep pace with the changes.
Be open to remote work options: Since the coronavirus pandemic, working remotely has become more common for many employees — but some employers still struggle with the idea of team members working off-site. The fact is, however, with all the recent advances in things like videoconferencing and other office communication tools, “telecommuting” isn’t what it used to be. Remote workers can be just as engaged, accessible, and highly productive as their in-office counterparts, and an important part of your superstar team.
We’ve all heard the term “work smarter, not harder.” That’s what optimizing resources in the workplace is all about. Workforce optimization helps your business not only operate efficiently and without wasted effort, but also allows you to achieve your most important goals more effectively: excellent customer service and continued business growth. Optimizing resources starts with making sure you have the right people in the right roles. The next step is making sure they have the tools and resources they need to succeed, as we’ve already discussed. Other key focus areas when it comes to optimizing resources include scheduling, time tracking, performance management, and goal setting.
Setting goals and tracking metrics
As the saying goes, you’ll never get anywhere if you don’t know your destination. By the same token, you’ll never know if you’re getting closer to your destination if you don’t track your progress. That’s why goal setting and tracking metrics are essential elements in a successful practice management strategy. Ideally, every department should have goals, which should be aligned with the company’s goals overall. These goals should be clear, precise, and have a specific time frame, and they should be adjustable at any time. Throughout the year, you should be tracking progress toward these goals at regular intervals, not only in terms of bottom-line production but also things like marketing event attendance, appointment-setting ratios, referrals, and new business from existing clients. Comprehensive metrics tracking of this sort will allow you to identify specifically the areas you need to improve in to achieve your goals.
Creating the ideal office environment
The ideal office environment is one in which your superstar team feels motivated, empowered, and excited to work together toward the company’s goals. It’s an environment in which every team member is a perfect fit for his or her role and has the tools, training, and guidance they need to do the best job possible. Creating this kind of environment starts at the top with your leadership, and it requires focusing on certain key objectives, including the following:
- Create a culture that is proactive, not reactive
- Have common goals and beliefs
- Ensure proper training and cross-training
- Develop strategies to improve
- Encourage a team/family spirit
- Encourage diversity in ideas, opinions, and points of view
- Don’t forget the fun (team outings, parties, etc.)
Creating the “wow” experience for clients and prospects
Earlier we noted that one of the main objectives of your practice management strategy should be to position or “posture” you well in the eyes of clients and prospective clients. Good posturing should start the moment people walk into your office. Ideally, you want them to walk into an environment in which they’re not just comfortable but instantly impressed! Your office décor, from the lobby to your office and beyond, should be inviting, professional, and give the impression of you as a highly regarded financial professional who is a credit to his community and beloved by his clients. Possible ways to achieve that atmosphere include adorning your lobby, office, or other sections of your building with things like the following:
Your academic and business credentials (NO SALES TROPHIES)
Shelf of financial books
Pictures of community work or community awards
Photo albums from client events with client testimonials (clear with compliance)
Low-volume TV showing you “in action” (i.e., giving a news interview)
If you’ve written and published a book or books of your own, prominently displaying those in your lobby is another great way of helping to create the “wow” experience for clients and prospects from the moment they walk through your door!
How can I be a better financial advisor?
There are many possible answers to that question. But one of the most important and frequently overlooked answers is to focus on improving your practice management strategy and processes. Whether it’s independent financial advisor practice management or RIA practice management, the fact is, this component of your business is one of the most important keys to achieving your full potential—so don’t short-change it! Your practice management strategy should be one that:
- Includes a superstar team
- Allows you to confidently delegate
- Improves efficiency and productivity throughout your business
- Optimizes your resources
- “Postures” you as an elite, highly sought-after financial professional
Allows you to devote most of your valuable time to what you do best: serving your existing clients and meeting with prospective new clients
Once again, you should think of your practice management strategy as the vital “third leg of the stool” — along with your sales and marketing strategies — when it comes to the ingredients necessary to achieve consistent, sustained business growth year after year!
If you want to know more about practice management solutions to help you grow your business, contact us today to begin the conversation.