Efficiency is often an afterthought when advisors work on their business strategies, but is a key driver for standout firms in delivering better business performance over time.
For that reason, Vanessa Oligino, a director at TD Ameritrade Institutional, presented a general session at the recent FPA BE conference in Boston on the topic of Breakout Growth: Driving Business Performance Through Efficiency.
Oligino asked the attendees: “What is your vision? What do you want to achieve? Have you thought about how efficiency [can improve your business]?”
1. Document Your Plan
It comes down to people, process and technology. “If you take the time to build a solid infrastructure, you can be more profitable,” noted Oligino.
“Is your firm prepared for rapid growth? [With that growth,] will you see a dip in client satisfaction scores or a dip in the time it takes to service clients?” asked Oligino.
In TD Ameritrade’s dealings with standout firms (and with some research from FA Insight), one thing stands out. Namely, they are better at planning and they put an emphasis on documenting and how the plan is going to be executed.
2. Create A Set Of Performance Petrics
The standout firms also put measures in place. Oligino said, “No pain. No gain. But it is worth it.” She proved her point by showing that standout firms at all levels are growing at 2.2 times the others in the industry.
They compare well in many categories, even things that are sometimes are overlooked like overhead. Oligino said, “[Advisors] can use efficiency at all different levels.”
A typical business plan for advisors have goals like revenue, asset and client growth. Many also include profitability. Discussing these goals, Oligino said, “They are lagging indicators of growth. They are all out of your control. You have to wait and see.”
She encouraged the crowd to focus on other indicators that also can indicate if a firm is going to be successful. She mentioned client retention, client satisfaction, process (related efficiency or productivity), staff growth and staff retention.