Marco, a 58-year-old advisor from New York, was raking in gross commissions of $1 million annually on securities and variable annuities, plus he earned commissions as a health insurance broker to 400 small businesses. He could not keep up with all of his leads and was letting opportunities slip by. He was working until 9 p.m. almost every night and had little time for himself or his family. He saw no way out. While he was approaching an age where he knew he should be thinking about succession planning, he was so busy with day-to-day affairs that he never found time to think strategically.     Instead of enjoying his success, he felt weighed down by it.
Bob, a 50-year-old CPA from Florida, had successfully navigated a transition from traditional accounting to wealth management. But he was still spending 80% of his time on small clients that accounted for only 20% of his revenue. He wanted to take his practice to the next level, but had no idea where to start.

Jeff, a 52-year-old CEO at a firm in California, hired a writer to help his firm create new marketing materials. With more than $1 billion under management and 35 professionals, the firm needed a new brochure and a Web site. But a few hours into an interview with his writer, he exploded, because he didn't have answers to the writer's questions about how his firm dispensed advice. "Why are you asking me how we manage money?" Jeff screamed. "You're the financial writer! You're supposed to know what we do!" The writer sheepishly replied, "I just want to understand your firm's process of wealth management so we can explain it and differentiate your firm from others." Irritated, Jeff shot back, "We do the same thing everyone else does. Just write about that!"

These three anecdotes are all true. The names of the advisors and locations of their firms have been altered, but the problems they face are all very real and come down to one issue: strategic business planning.

Ironically, financial advisors-planning professionals-often fail to plan for their own businesses. They fail to think strategically about how to operate their firms more efficiently by devising systematic written processes. As so many struggle with growth problems, operational challenges and marketing issues, most fail to address the root of their problem: a lack of rigorous strategic analysis and a failure to develop processes in their firms.

Advisors are starved for answers about how to create processes for managing portfolios, how to figure out which target markets would be most attractive and how to structure a system for retaining and grooming junior professionals by putting them on a career track with clear opportunities for advancement. Advisors are hungry for ideas about how they can change the behavior of their staff to get them to take meticulous notes about client activities and input them into a new CRM system. Advisors want to know how they can segment their business into two or three prescribed levels of service with different pricing schemes and then be certain that staff members will always deliver to clients the promised level of service.

Process For Success
    Creating these processes is key to running a successful financial advisory practice and making your firm great. Once you establish written procedures for delivering wealth management advice, employees can then carry out the process. The firm's founder no longer must meet with every new client if intake procedures and instructions are written. The firm's principals don't have to review every client portfolio and performance report or personally be involved in every task conducted in the firm.

A firm with processes will see better client service, since a task handed off from one employee to another won't be fumbled nearly as often-if Stan knows his job is to gather client data, and Steve knows he must take that client data and enter it into planning software, the handoff point is clear. Not only that, but it can even be embedded in a firm's software. Programs such as Junxure, Redtail CRM, ProTracker, Salesforce and XLR8 can incorporate your work flows and keep a staff informed of the process stage each client is in.  

When you commit these processes to software, it allows you to measure your firm's efficiency and profitability. It allows you to generate reports on how many times a client has contacted your firm each year,, which of your staff members is handling certain chores most often and which ones failed to follow up. And if you really commit staff resources to filling in the data, you can also gauge which clients are most profitable.

Moreover, your firm is suddenly not reliant on one or two key employees. When processes for handling the firm's business are documented, new people can be hired to do the same jobs. New employees can be trained. Your business is scalable. Plus, you can divvy up tasks and processes and organize roles for employees. "Client service representative" becomes a defined role in your firm and is not thought of as Sue's job. "Portfolio analyst" becomes a defined role and is not thought of as Sam's job. Sue can thus train a successor and give up some of her responsibility in client services when she wants to become an advisor. Sam can move from his role as an analyst to that of portfolio manager. A career path can be established for employees showing them how one day they can become partners.

Such processes can also give substance and uniqueness to your marketing materials. Say there are six steps that every retirement planning client must go through-data gathering, estimating, evaluating, proposing, executing and reviewing-and that these six words spell "DEEPER." The firm can now market its DEEPER wealth management process, which can be differentiated and even trademarked. Now it's easy to design a logo connected to your firm's process.

Prophets Of Process

In recent years, Mark Tibergien at the accounting firm Moss Adams LLP, along with colleagues Rebecca Pomering and Philip Palaveev, have become nationally known by offering consulting services to advisors on these very issues. Tibergien's personality and  eloquence, as well as his deep knowledge of the financial services industry and management techniques, have made him an industry luminary. And this gave him a huge opportunity early this year, when he was hired away from Moss Adams by Pershing, the clearing firm, to run its RIA division. While it was good news for him, a result of his well-deserved success, it left a void at Moss Adams, which announced it was scaling back its advisor consulting division.

Who will fill this void? Who can deliver the same analysis and strategic consulting to advisory firms? There is no shortage of candidates, and many consultants are vying to help advisors with this sort of advice. But it was last month that I came across the firm that could succeed Tibergien.

ActiFi (http://www.actifi.com), a Plymouth, Minn., consulting firm, wants to be your chief process officer. It wants to improve the quality and consistency of the client experience and the advice that advisors provide clients by translating your business objectives into executable processes. It wants to improve economics for you and your client by assessing your firm's work flows, implementing best practices and training your staff to carry out efficient processes that are embedded, recorded and supported by your firm's software applications.

According to Spenser Segal, ActiFi's founder and CEO, advisory firms usually have about 40 to 60 processes encompassing the work they do-eight to 12 of them being key processes that take up 80% of the staff's time. If you take the time to write out all your key processes-along with their subprocesses and tasks that go along with them-then you can improve the teamwork, organization and client service in your firm.

Working with people is a funny thing. Unless you are absolutely clear about what must be done when and how-as well as understand all of the details of doing it-people inevitably misunderstand, form their own opinions and find some way of doing things wrong. Segal says that if you ask several people on your staff to write down the details of all the multiple steps in a routine, frequently used office procedure-such as sending a client a performance report, meeting with a client for an annual portfolio review or signing on a new client-you are likely to get different descriptions of the same process from each staff person involved in that process.

ActiFi's Approach

ActiFi has developed a template process library that is divvied up into six categories. In the "People And Leadership" category, you'd find a process for creating a career path for junior employees, including a method for conducting employee reviews and all other best practices in managing people. Another category is "client acquisition best practices." This outlines tasks that must be done to attract and sign new clients. The other categories are the financial planning best practices, investment management best practices and client services best practices, all of which offer specific processes for giving advice to clients and providing them with excellent service. These templates offer working procedures for conducting client meetings, for example, or for analyzing client portfolios. There are also processes for matching a client's goals with her plans and for comparing a client's portfolio to his risk tolerance level. Each process is aligned with best practices established by Fiduciary 360.

To determine what processes a firm needs most, ActiFi first conducts an inventory of all your processes, ranking each one by how often it is conducted, how important it is to your firm and whether it needs to be documented. Once you add up the processes you already have, you can focus on those your firm is missing.

ActiFi has also developed an ingenious and simple Web-based application that determines where your pain points are and offers steps to remedy them. The application, ActiFi Roadmap, lets you select from seven high-level business goals: growth, expertise, profit, risk reduction, satisfaction, time and value. Once you select your business goal, new options appear that you must choose. For instance, if your high-level goal is growth, you can choose among six objectives: capture illiquid assets, increase AUM, increase net number of clients, increase revenue, prepare for aging clients or manage the size of your practice. If you choose "growth" as your main objective and "increase AUM" as your midlevel objective, the decision tree gives you four detailed business objectives to choose from: "acquire another practice," "increase AUM from existing clients," "obtain new clients" and "offer more solutions." After you choose any of the four detailed objectives, you are provided with a list of recommendations on how to accomplish your goal. (ActiFi has made Roadmap available to my readers for free at http://www.actifi.com/roadmap.)

ActiFi's Roadmap application is not going to offer you any great revelations. It suggests ideas you might have come up with yourself had you spent an hour alone in a room and mapped out your thoughts. But it does help you easily focus on what's most important. Advisors often don't know where to start to address the many challenges small business owners face, and this neat little application organizes your ideas quickly so you know where to focus and what solutions are available.

More important, Roadmap illustrates the most intriguing idea behind ActiFi. The firm is trying to "templatize" consulting solutions to make them more accessible to more advisory firms. (The fact that there is no word "templatize" tells you how innovative the idea is.) With it's the Roadmap software collecting each firm's processes and adding them to a library of templates, ActiFi can cut the time it spends consulting. I won't go as far as to call it a Web 2.0 "client, serve thyself" approach, but it is a step in that direction. And it could allow them to serve more advisors than Moss Adams ever did.

So who are these guys? Segal, 37, was vice president of e-commerce strategy for American Express Financial Advisors (AEFA). He also held management positions at RBC Dain Rauscher and Barrington Capital Management. He was a co-founder of BigCharts.com, which was purchased by MarketWatch.com in 1999. For a number of years, he ran a successful financial planning and money management practice as a certified financial planner.

He founded ActiFi in January 2003 and it now has 24 employees. It's an eclectic group of individuals. One of these is chief marketing officer Sam Richter, a sales and marketing expert who previously spent six years running a not-for-profit business library and built a string of online information search systems and resources for small businesses. There is also Mark Nahlovsky, a onetime programmer who has helped document work flows for advisory firms and then worked them into software.

Their work requires labor-intensive research and analysis of a firm's operations, and it usually costs many thousands of dollars. Typically, consulting firms focusing on advisors will charge $25,000 to help you write processes for just one area of your practice, such as client acquisition. And that may not even cover the implementation and training costs. To overhaul all of the processes in your firm, get them all in writing and get help putting them into practice, you can spend $75,000 to $125,000. This detailed work involves numerous professionals-project managers, technology specialists, writers and experts in the delivery of financial advice-weeks of effort. Segal says it typically takes two months to develop processes in one practice area, and doing them all is likely to take four or six months-if the advisory firm is truly committed to the project.

You Should Be Committed
    Segal says not every firm is up to these tasks. The firm's leadership has to embrace the idea of the processes first. "Before they've ever met us, they've got to believe that a business that is more systematized and less dependent on them and that can deliver a repeatable result is more valuable and more effective," says Segal. "Many advisors just don't quite get that concept." Segal says that when advisors call, they're asked a series of questions that help determine whether they're "systems thinkers." "If they aren't wired that way, we don't want to work with them."

There are other obstacles. Many firms purchase CRM software totally unaware of what will be needed to use its work-flow features. These features are not magical, and to use them, you must embed your firm's work flows into the program. Unless you have step-by-step procedures written out, you cannot use them. Segal points out that the technology only facilitates the process, but does not create an effective process on its own.

The change in behavior that will be required by your staff is usually wrenching. The challenge is not so much to learn which keys to press to make the software work. It is making your staff embrace the change the necessary change in culture. Your staff's catchphrase should be, "If it isn't in the CRM, it didn't happen."

Segal refers to the training that must occur as "change management." Many employees learn differently, he says, and ActiFi consultants spend time with each one to make sure they are coming along. "Some people learn by presentation, some by reading a manual and some by having someone sit with them," Segal says. You need to ask each employee which way is best for them to learn your firm's new processes and software in order for every employee to "buy in."

Another obstacle to success, Segal says, is that implementing new changes often makes some tasks take longer. A sticky note reminding an employee to call a client takes only 10 seconds to write and stick onto a computer. But putting the same note into the CRM could take 10 or even 20 times longer. "You need to recognize the sacrifice the staff must make to make the system work," says Segal, "and you need to make the employee understand the downstream benefits of making the sacrifice." For adoption of new systems to be successful, Segal says, employees must understand how systematizing will help the firm grow and be more successful. In addition, he says, it is wise to incentivize employees by linking their compensation to their adoption of the program. Still, despite all of this effort on management's part, some employees will not embrace the changes. "And the best thing you can do for them is to help them find another job," says Segal.

ActiFi Engagements
    Maybe it's human nature, but Segal says most firms do not engage ActiFi unless they're feeling acute pain. The vast majority of advisors are not inspired to seek help in designing processes when things are going well. "They call," Segal says, "when they're fighting fires, see a breakdown in client service and they're really upset."

Segal says ActiFi has worked with about a dozen RIAs over the past year in addition to a large institutional client with thousands of reps. The firm's ideal client is an RIA with $250 million or more under management. "They've hit the wall and have controlled chaos," he says. "Their staff is stressed, things are falling through the cracks, and the business just isn't fun anymore." Smaller firms have the same kinds of breakdowns and crisis points, so they could also be candidates, he says.. However, it's a bigger leap for ActiFi to make the time and financial commitment to a firm with $100 million under management. Segal says that a breakaway broker just starting on the independent route may be a great candidate even if he or she has only a couple of employees and $100 million under management-as long as he or she has the systems thinker psychographic.

A typical engagement costs about $5,000 and deals with one set of processes-client service, for instance, usually begins with a two-day onsite workshop in which processes already in place are assessed. One-on-one sit-downs with each employee are conducted, and the principals are given special attention to ensure they will lead by example in embracing the consulting process and recommendations for changes. You are delivered a "place mat" depicting the process graphically, one that everyone can hang up in his offices. The "on-boarding" process will be detailed, as well as all of the meetings with clients and tasks your staff must do in preparation for each client meeting. A detailed "mind map" of the processes is also given to you, along with a spreadsheet that makes the processes easily configurable in a CRM. To train your staff and implement the process will typically cost an additional $5,000.

Andrew Gluck, a longtime writer and journalist, is CEO of Advisor Products Inc. (www.advisorproducts.com), a Westbury, N.Y., marketing company serving 1,800 advisory firms.