Make a mistake in your dealings with the advisors who Commonwealth Financial Network sees as its lifeblood, and you can expect to get called out. Company auditors who visit advisors' offices across the country close each of their sessions by asking for advisor observations and complaints. When the auditors get back to company headquarters, whatever isn't working at optimum capacity is detailed in an e-mail blast, so that about a third of company staff and executives know about the problem.
What happens if it's you who has management responsibility for the issue in question and you fail to respond?
You can expect a missive from Commonwealth Chairman Joe Deitch asking you what you're waiting for. Deitch is a task master when it comes to creating an advisor-centric world at the firm. A longtime devotee of process improvement (a term that simply means improving the processes a company uses to transact and enhance its business), "he'll never be satisfied with anything, and I say that in a good way," says Janet Reckman, Commonwealth's vice president of internal operations. Deitch makes sure that everyone in the company focuses on his passion, too. The corporate calendar that pops up when employees turn their computers on in the morning greets them with this message: "There is no failure if you learn from the process."
E-mail blasts are just one of Commonwealth's many ongoing and public touchstones of how advisors view the firm and the way it transacts business. And the firm is not alone. More brokerage firms and mutual fund companies are beginning to investigate the way they and planners conduct their businesses.
Companies know that if they don't partner with you and make your life easier, you can simply go elsewhere. And you thought your business was about relationships.
What are the tools of the process improvement trade? You might be surprised.
At Fidelity Investments Institutional Brokerage Group, which wants to be known for its delivery excellence, the tools are an automated and sophisticated system of metrics. In effect, the company monitors and measures cycle times-how long it takes for everything to get done-from new account transfers and cashiering to brokerage services and problem resolution, as well as how long it takes reps to answer a phone call, says Jay Lanigan, who heads up Fidelity's RIA business. Each function is measured against targets to see if advisers are getting what they need in a timely way. "Regardless of what's going on in the country or the market, we want to make sure our system is operating smoothly," Lanigan says.
What happens if an advisor runs into a snag or problem or has a service request that can't be handled immediately? Fidelity has a resolution program that measures how long it takes to resolve issues. "We have specific targets on how long it should take, and we provide those measurements to our people and put them online so advisors can review the status of any service requests they have," Lanigan says.
The whole point of using metrics to measure service is to understand how your company and its different divisions and employees are doing during times of calm and stress, such as the implementation of new regulations or increases in volume. If you can't measure the problem, you can't manage it.
"It helps us analyze our resource allocation and staffing so we can ensure that we're supporting advisors' businesses all the time," Lanigan adds.
While Fidelity spends a lot of time looking at the quantitative side of business, the quality of advisors' transactions with the firm is also measured and analyzed. The company has plotted a range of different types of interactions and optimum results and measures actual transactions against those benchmarks. To get pointed advisor input, quality assurance folks go out into the field to talk to advisors and find out what's going right and what's not.
Lanigan says staffing and compensation are also key ingredients to process improvement. "We're trying to drive client satisfaction in all areas, and we do that by carefully communicating goals, aligning our associates' performance and linking their compensation and rewards to those measures. We know that advisors expect us to provide high levels of service, which is consistent with what they provide, and that's where we stay focused," he adds.
Obviously, keeping client errors to a minimum is crucial in keeping advisors and their clients happy. "In our business, the first impression we make is transferring a new client's account from another institution. So if we don't handle everything promptly and accurately, that's a big problem," says Ann Smith, senior vice president of Retirement Advisors of America, which transferred its business to Fidelity in 1991. "Since we work with retirement accounts, we need a custodian that takes as much time with outgoing money as with incoming. The last thing you want is a customer calling to say they didn't get their check."
Smith and her firm, which does a fair share of process improvement and metrics of their own, actually track and monitor all mistakes in client accounts.
Over the past decade, Fidelity's errors have been miniscule, Smith says.
Institutions also are developing consulting and hands-on tools to help advisory firms whip their own processes and services into shape.
Crossbridge Financial Group in Rochester, N.Y., was battling staff turnover earlier this year. To tackle the problem, they tapped the practice management staff at Commonwealth, their broker-dealer. The firm sent out a consultant who did interviews and analysis and provided the firm's six planners with a blueprint for fixing the problem. "We had a communication issue and to tackle it, we've instituted weekly meetings between planners and staff to enhance our team approach and solve the problem," says Elizabeth Thorley, a partner at the firm. "As an advisor, I'm focused on advisory issues, not the human resources side, so it was nice to be able to pull someone in from Commonwealth who does have this expertise."
It's too soon to measure, but the staff at Commonwealth seems to be happier and more stable as a result, Thorley adds.
To enhance staffing and staff performance at advisory firms, Crossbridge also offers personality profiling services and training for administrative assistants. "It's a tool to helps the planner step back and look at the process with some clarity and objectivity," says Joni Youngwirth, vice president of practice management.
In fact, creating objectivity and repeatable steps to success is one of the tasks Youngwirth and her team work at relentlessly to help advisors produce a consistent client experience. "Our goal is to help planners identify all of the distinct moving parts in their firms, see how they work together and create processes that are repeatable," says Youngwirth, who with her four-person team is bringing her presentation on what the ideal independent planning shop should look like to nine cities this year. By understanding the whole and its parts, a planner can say, 'Well, we're great at marketing, but boy, our staffing and business planning leave a lot to be desired.'
"If they can get to the point where they can step outside their practice and be their own consultant, they can build a business instead of just running a practice," says Youngwirth. The company has also built a "core indispensability team" that works with advisors to build business plans and increase earnings.
Beyond the e-mail blasts, Commonwealth also does ongoing focus groups and fireside chats with successful advisors and sends out weekly and annual surveys that give everyone a shot at input.
Thorley is impressed with how Commonwealth's processes make life easier. She uses the company's online tracking system to see all client account work in progress, right down to when checks were sent out. She also likes using the company's E-Fill program, which allows her staff to automatically fill in account forms with stored client information. Starting next month, the company will begin sending all activity reports via CD, rather than bulky snail mail.
Planners get a chance to rate the company every year, and on a scale of 100, ratings have jumped from the low 80s a few years back to the mid-90s today.
In the face of market volatility and profit margin squeeze, everyone can use an edge. At Oppenheimer, the focus continues to be on knowing investors. The fund company continues to shell out big bucks for research into what investors are doing with their money and what they would do if someone would help them.
The company has also built a system that allows them to measure the quantity and quality of contact CSRs and wholesalers have with advisors. "We want to know if advisors are getting the key service and product updates and the sales tools and strategies they need from us," says Oppenheimer's Dan Gangemi. "It links the advisors needs with our processes and allows them to prioritize what we deliver to them and even rate it. That forces us to step outside our own little myopic world and put customers first."
If the ability of a company to deliver quality service in the face of disaster is its true test, Oppenheimer had its trial a year ago on September 11. The company had 598 staff (all survivors) on four floors in the south tower of the World Trade Center when a terrorist plane intentionally crashed into the building. Although the initial shock has yet to wear off, Gangemi says resilient employees managed to set up new headquarters in Connecticut and Rye, N.Y., within a week. The firm had been conducting disaster recovery exercises every six months since shortly after the 1993 car bombing in the Trade Center's parking garage.