Workflow

It is not uncommon for advisory firms to be doing something just because they've always done it that way, Tibergien points out. Consequently, during the review they will often discover that the number of steps and manual processes is higher than they imagined. They also will often discover that employees designed work-around tactics to solve the problems instead of looking at them more systematically.

Friedman's firm focused on three key areas for workflow improvement: client services, financial planning and investment operations. He cites an example that involved preparing for client meetings. Some meetings were short and simple but others, such as annual financial planning reviews, required extensive input from multiple staff members.

Preparations had been ad hoc but the firm undertook a review of the process to improve the preparations' quality and consistency. With the revised workflow, the launch for a meeting is typically either a calendar reminder or a client calling in. Based on that event, says Friedman, an action sequence—a set of tasks—is assigned throughout the office in the firm's client relationship management (CRM) software. "All the different people that have a hand in it get their tasks with set times of when to do them," says Friedman. "You can see the tremendous consistency you get by doing it that way."

Developing and then following the workflow ensures that all necessary work is done before and after the client meeting, says Friedman: "The client receives a consistent experience, our services are complete so nothing falls through the cracks and everything is the way we want to deliver it so we don't have a bunch of one-offs all over the place." 

RMD tracking

Taylor shares a specific example involving required minimum distributions (RMDs) from clients' retirement accounts, which often involved multiple custodians and investments. The RMD distribution waiver in 2009 and Temenos' rapid growth from 2009 to 2010 caused the firm's principals to realize they needed a more efficient workflow for tracking clients' RMD status. As a first step, they changed the workflow to identify every client who had reached RMD age. That was an easy to-do with the firm's database, says Taylor. The second step involved reviewing clients' preferences for monthly or annual distributions. Those preferences required two different workflows because of the need to track the cumulative monthly withdrawals but the workflow review paid off, says Taylor: "And, now, it is two years later and it's running so smoothly that I don't even have to think about it." 

Technology's role

The general rule about technology is that if something is a regular task, automate it, suggests Tibergien. If it is an incidental or irregular task, don't. Observing and analyzing data is a good use of technology, as is the process of pulling a task along to the next step. Technology cannot replace human judgment in many cases, but it can support it, he adds.

Tibergien highlights document management and CRM as technologies that can benefit workflows significantly. Going paperless creates huge efficiency as any staff member can find documents in a moment's notice without having to ask several colleagues, he notes. It also allows for uploading paperwork directly to business partners and can have a significant cost benefit to the business. Linking the firm's CRM to their standardized process allows for broader access to work status and the ability for professionals to respond to inquiries at the point of contact. 

Both Friedman and Taylor cite the role of technology in developing and implementing efficient workflows. In Friedman's case, he also serves as president of Junxure software, a CRM system he had developed for his business that eventually grew into a commercially available program. Junxure plays a key role in managing Private Ocean's workflow and Friedman uses clients' annual review meeting preparation process to illustrate that role. 

Junxure automatically generates a reminder to the client's service person at Private Ocean that it's been 12 months since the client's last review. That staff member sets off an action sequence with a series of tasks. For instance, one task goes to the firm's scheduler who contacts the client to schedule the meeting. Another task goes to the para-planner who updates the clients' planning models and compiles a financial summary. 

Then the investment operations staff receives a task to review the portfolio. "These tasks go out to all these different areas including to the advisor who will then meet with the client," says Friedman. "[The tasks inform staff] this meeting is coming, here's all the things you need to cover, here's the work that's being done. They have all the pieces they need for the meeting. There are also follow-up actions that are a part of that workflow that say send the meeting notes summary to the client and assign out relevant to-do's from the meeting. So all of those things are done and they're done within the system."

The right software

Of course, most advisors don't own a CRM software company so they're forced to use what's available on the market. Buying the wrong software is an expensive error, so it's important to find technology that meshes with your workflow goals. Taylor uses Junxure but he emphasizes that there needs to be a thought-process put into workflow before developing it and looking for supporting software. "Once we've figured out how to do something, then it was, how do we make a process that anyone can do?" he says. "It's important to have the thought-process first and then have the right technology."