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.