Should you prepare a manual?

Advisor: I have just completed negotiations to buy a book of business from an advisor who is retiring that will effectively double my assets under management and add about 150 new clients. The deal doesn’t close for another six months, so I have time to get ready. Even though the retiring advisor’s assistant is staying on, the advisor is not because of declining health, so my current assistant and I will have some help. However, when talking to my assistant about the transition and the need to train the other assistant in “our way” of doing things, it has become obvious that we don’t really have any standardized processes to train and guide someone else. Things just “get done” in our practice by whomever, whenever.

I am assuming your advice would be to use the time to create a policies and procedures manual. Am I right? And, if so, can you provide any guidance regarding what should be in it and how it should be structured?

Coach says: I have written extensively on this subject, highlighting the opportunities and challenges that accompany any practice acquisition. So, I will limit my comments here to your specific question around policies and procedures manuals. And, yes, you are correct that my recommendation would be to develop a written manual that details workflow processes for all the important activities that take place in the day-to-day operation of your business.

> Most practices evolve slowly

As most advisory practices are small, in terms of number of people, it is easy to think that there is general knowledge among everyone regarding how things get done. In the early years of your practice, as you indicated, you just “did what had to be done.” Even when you hired your first assistant, with the best of intentions of having her take on specific duties, in the heat of the day, with so many things to co-ordinate, I bet both you and she simply applied your past experience or best judgment to create your own way of keeping up with the workload. There was little time or motivation to plan workflow, much less document it.

Then, that day arrives when the size and complexity of your business reaches the point at which the benefits of having detailed systems and work processes become apparent. Regrettably, many advisors at this point continue to procrastinate because they think they’ll have to produce a 200-page manual — but they don’t. All you need is a simple description of the key activities required to manage your business and the steps in carrying them out.

Another event that often shines a light on the need for a standardized methodology is the addition of a new employee. With no documented systems in place, training the new employee takes longer and is often a simple demonstration of “this is how I do it,” which perpetuates any inefficiency that is already built into your processes.

 

> Start with what’s important

You don’t want to have systems and processes just for the sake of having them. I suggest you first list the major activities essential for the success of your practice, such as new-business development, sales, account opening, bringing new clients on board, client service and client reviews, as well as financial or investment planning, client-meeting preparation, and so on.

Rank each of these activities in order of importance to your business. In a mature practice, bringing new clients on board may be something that happens only a few times a year, so it might be considered to be less critical than client service and reviews, which are daily activities. Less established practices, on the other hand, may deem new-business development as having the greatest impact on success, so they would rank it higher.

Now, create a page (preferably online) for each activity. At the top of the page, write down the policy, a description of the procedure and the “trigger” point, which is the event or activity that launches the process. At the bottom of the page, write down the desired outcome, which is the situation once the process has been completed. Now, fill in the space between the top and bottom of the page with the steps that have to be completed along the way, in the order in which they have to be done. Identify who is responsible for each step and when it should take place. Attach a completed sample of any documents required, and you’re done.

To illustrate this approach, let’s consider the advisor who has a policy that “each of my A clients receives a face-to-face portfolio review every six months.” This a very important element of client service, as well as a sales and referral opportunity. Consequently, this advisor has developed a comprehensive procedure that looks like this:

Step 1: Assistant is to enter a review meeting “task” into our customer relationship management (CRM) system for a date six months following account opening. Set “reminder” for 30 days in advance.

Step 2: On “reminder” date, assistant is to contact the client by email or telephone to set actual date and time for review meeting. Note agreed upon appointment time and date in advisor’s calendar. Sample email and telephone script is on file at My Documents/Policies and Procedures/Client Reviews. Set new “reminder” for two weeks prior to review meeting date.

Step 3: Two weeks prior to review meeting date, assistant is to give client file to advisor for review. Advisor is to prepare review meeting draft agenda within two days and return to assistant. Sample review meeting agenda template is on file at…. Set new “reminder” for one week prior to review meeting date.

Step 4: One week prior to review meeting date, assistant is to send review meeting draft agenda to client with note that advisor will be calling in three days to confirm proposed agenda items. Sample email script is on file at…. Enter “task” in CRM for advisor to call client in three days.

Step 5: Three days prior to review meeting date, advisor is to telephone client to confirm agenda and ask client for additional items he or she would like to include on the final agenda. Advisor is to return draft agenda to assistant on the same day to allow time to prepare final agenda. Advisor is to identify documentation required for review meeting.

Step 6: One day prior to review meeting date, assistant is to provide advisor with final agenda, client file, updated portfolio statement and any other required documents. Client service followup form to be attached to final agenda page. Sample client followup form is on file at…. Set “reminder” for assistant and advisor to meet one day after review meeting date to implement actions identified at review meeting.

Step 7: Advisor to conduct review meeting and note required action on client followup form.

Step 8: One day after review meeting, assistant is to meet with advisor to implement items on client review followup form. Set priorities and assign responsibilities. Update client file.

Step 9: Set target date for next review meeting in six months with “reminder” for 30 days in advance.

Your management style may lead you to develop something more comprehensive than what the above description entails — and that is OK. Just be sure you don’t fall into the trap of overengineering your processes by trying to anticipate every possible variance on what could happen.

Personal judgment and experience will still play a part in getting things done. In most practices, however, policies and procedures can be adequately documented in one page per practice. That way, if you have 10 key activities that are critical to your business, you will end up with a 10-page manual that’s easy to manage.

Get your team members involved and you will find that the very act of preparing your manual will expose flaws in your current processes and provide the opportunity for overall improvement in both effectiveness (doing the right things) and efficiency (doing the right things in the right way). It will reduce the number of mistakes, lower stress and ensure consistency of your clients’ experience, all of which add to more enjoyment and higher profitability for you — and that is always a good thing. IE

 

George Hartman is managing partner of Accretive Advisor Inc. and CEO of Market Logics Inc. in Toronto. Send questions and comments to george@marketlogics.ca.