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.