The ages and stages of workflows

The Hutchison household is a racing family. My mechanical engineer husband has been consumed, personally and professionally, by racing his entire life and it’s therefore been a big part of my life for the last 15 years. We rarely go a weekend without watching a race in person, on TV, or racing one of our own cars here in the Midwest. The practice management consultant in me is drawn to the business side of racing – especially the human capital. While the driver tends to get much of the spotlight, racing is really a team sport. The driver and 15-person pit crew must work in sync to efficiently execute well-defined, repeatable and rehearsed processes to give them the best chance of winning each race.

The benefits of workflows for advisory teams

Strong workflow processes are also key for advisory businesses, especially those run by teams. Workflows can help ensure that:
  • Clients receive consistent, top-notch service;
  • Ability to get work done without stepping on each other’s toes;
  • Regulators understand how the advisor’s fiduciary responsibilities towards clients are being fulfilled.
Workflows can also potentially increase the value of your firm by institutionalizing its “secret sauce.” Whether they realize it or not, many advisors use – and benefit from – workflows in their business today. After all, work is getting done: Prospects are being converted into clients; investments are being selected; financial plans are being built; portfolio review meetings are being held. Maybe birthday cards are even being sent to clients. However, in my experience, few advisors actually document their workflows. Instead, the workflows exist in the form of a habit or subconscious routine. Documenting, optimizing and implementing the workflows is the next step in the process of professionalizing and institutionalizing an advisory business.

Get started: document your critical workflows

Here are a few ideas to help create – and stick to – such an “operations manual” for an advisory business:
  1. Assign ownership Designate a process-oriented support team member as the owner of the creation and implementation of workflows in your business, and give them the authority to hold you and your team accountable for cooperating. Such a project can be a perfect growth opportunity for support and administrative staff, and often they already have a good grasp of what it takes to implement in a repeatable fashion what you discuss with clients.
  2. Be comprehensive in your approach to developing the workflows Creating workflows involves two phases:
    1. Discovery phase: Have the team identify the keystone processes that support the ideal lifecycle of a client. Asking team members questions such as, “What are we currently delivering to clients? What reactive requests do we receive from clients? How can we turn those into pro-active offerings?” can help spur brainstorming about the critical workflows.
    2. Documentation phase: Create a tangible document that records the steps involved in every process identified in the discovery phase. Be sure to include details such as the individual(s) responsible for each step, expected timeline for completion, etc.
  3. Commit to keeping the workflows fresh and relevant The workflows take time to develop and document, and in order to be most useful and relevant, they require care and feeding. Commit to reviewing every workflow at least once every two years to adapt to potential changes in the team, client base and advisory landscape.

Where to begin?

The processes many advisors choose to document first include:
  1. Client onboarding This encompasses everything you do from prospecting to client discovery to developing an investment plan for a client.
  2. Investment due diligence This includes processes related to asset allocation, portfolio selection, trade execution, portfolio rebalancing, and tax-loss harvesting.
  3. Client investment selection How you and your team match investment options you’ve selected with individual clients.
  4. Segmented service model Details on the service model you offer to every segment of clients, and how, when, where, and by whom those service components (e.g., quarterly communications, client appreciation events, portfolio review meetings, etc.) are delivered. The bottom line Documenting workflows has historically made many advisors yawn. Today’s competitive and regulatory pressures – as well as potential team and valuation enhancement opportunities – may be quickly changing that attitude.

The bottom line

Documenting workflows has historically made many advisors yawn. Today’s competitive and regulatory pressures – as well as potential team and valuation enhancement opportunities – may be quickly changing that attitude.