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.
“Where it all falls apart: three out of five business plans lack implementation details,” noted Oligino.
Some advisors need to consider outsourcing or even insourcing. Costs and skillsets can factor into those decisions.
3. Foster A Culture That Promotes And Rewards Efficiency
“Create a safe environment,” said Oligino. She advised that firms seek feedback, create a safe environment, empower the team and commit to providing solutions.
“Identify opportunities to improve efficiency. Are there common issues you can solve for? What are the top service requests? How can you solve for that? Think through the problems you see on a regular basis,” advised Oligino.
She gave an example of a firm that was manually rebalancing client accounts via spreadsheets. Of course in 2008 and 2009 they were very reactive to the markets when they should have been proactive with clients. Making an operations and technological change resulted in quantifiable results.
With an example like this, she recommended attendees think about the problem statement. She showed an adorable picture of her two-year-old son and said it is important to use his favorite question: ‘Why?’ If you start with ‘why’ and keep asking ‘why’ a firm can get to the root of the problem to fix an issue.
4. Manage Change
According to Oligino, there are three types of problems: Quick hits with easy solutions; simple problems that take a little more time that for the most part can be solved and 90 percent of advisors will move forward with the solution; and complex problems that advisors might not be able to fix, but it is at least identified as a future problem to address.
Wondering where to start? Oligino recommended asking, “What are your high-impact activities? How do you get derailed? How can you spend your time more effectively?”
She gave an example of her open-door policy becoming an issue as she could not get her work done with constant interruptions. Once she recognized it was an issue, she made a change and implemented office hours to improve her own personal efficiency.
There are times when advisors should delegate tasks to the right people. First they should know themselves and even do self-assessments to do so. Also know the support team. Know their strengths, skillsets and even what motivates them, advised Oligino.
Do you have the monitoring systems in place? Do not spend all this time to create these processes that then are not followed. Oligino pointed out one huge issue, “54 percent of advisory firms strategic plan do not include staff member performance objectives.” Take the strategic plan down to the deliverables and objectives of each staff member.
If an advisory practices does all these things they can achieve meaningful productivity gains by overcoming resistance to change, implementing simple and effective problem solving techniques and making critical decisions about what to delegate. Advisors should focus on strategy, operations management and personal productivity to improve business performance.
Oligino asked the attendees, “What are some of the things you can do today?”
Mike Byrnes is a national speaker and owner of Byrnes Consulting, LLC. His firm provides consulting services to help advisors become even more successful. Need help with business planning, marketing strategy, business development, client service and management effectiveness? Read more at ByrnesConsulting.com and follow @ByrnesConsultin.