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The Value of Time and Experience

I recently visited an adviser whose business had grown very quickly. In a five-year period, he went from one employee to five and his production tripled, easily putting him in the seven-figure range. In comparison with many other advisers with similar businesses, this adviser is 15 years younger, on average and has a commensurate 15 fewer years of industry experience. Listening to his business challenges—especially those having to do with human resources—gave me pause. Did this adviser have more people problems than most or was something else going on?

Getting Better Vs. Getting Used to Things
In considering this young adviser’s situation, I believed one of two things was going on:

  1. He had not yet developed the skills necessary to manage staff, which was actually contributing to his issues.
  2. He had not yet recognized that people issues are an ongoing component of managing a business.

For example, the adviser felt that he needed to revise job descriptions and re-create a compensation system that would more specifically motivate the behaviors he desired. He wanted his employees to take more responsibility for producing error-free work, instead of depending on him to review their work and catch errors. The issue extended beyond his support staff. He had recently brought on a staff CFP® and discovered that the process of guiding and mentoring the young woman required a significant investment of time to help her understand how to apply financial knowledge and theory to clients’ reality. That’s not to mention the time he was spending helping her evolve business development skills. When I asked how much time he was investing in managing the business, he said 50 percent.

But is that really too much? Comparing his story with that of other advisers with similar business scale and capacity, I found that they were far less verbal and seemed less frustrated with their human resource situation. What was particularly thought provoking was that the young adviser had assumed he must be doing something wrong or that there was something wrong with his organizational model.

We’re Never Done
There is no doubt that if we make the effort to improve, we get better over time. We learn how to manage resources—time, money and people—more effectively. What this young adviser had yet to learn was that he was doing just fine as a manager. The reality is that just when we have things lined up to achieve the perfect organization, a lot can change—someone gets sick, leaves for a different job or needs to implement new technology or procedures, which actually causes him or her to be less effective and may even lead to performance issues.

The longer we spend in a leadership position, the more we learn that when things are going well, all we have to do is wait a bit—they’ll change! The good news is that the reverse is also true. When things are not going right from an HR perspective, focusing your attention on the issue can help improve it. The fact of the matter is that we are never done managing our people. And that’s the real value of time and experience.

Joni Youngwirth_2014 for webJoni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.


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What Comes First—Changing the Tech or the Staff?

Firms are struggling with technology adoption because they believe their executives or staff can’t change or learn new methods of operating. So they stop implementing the tech (aka the change) and instead start interviewing potential hires to replace their current staff who appear unwilling to change and learn. This stoppage and hiring effort creates a dark cloud over the mood of the staff. It sends a message that the firm isn’t prepared to improve nor invest in change management. Rock star-quality staff take this stoppage as a sign and ultimately stop recommending improvements and cease their championing of change. If the stoppages happen often, your best staff might even start interviewing at other firms or start their own firm.

How do I know if my staff are able to learn new systems?
The easiest way to test the team’s ability to learn is to sell the change before implementing it. As the firm owner, you must believe in the change, know the benefits, and persistently encourage productive feedback. Remember that the administrative person might care about reducing data entry work, while the adviser will want this change to help them onboard a new client more efficiently. Staff that can’t adopt the change will stand out immediately. If they are your key team members, have your executive team talk with them and explore why they are resistant to the changes. Then, and only then, will you know if it is time to search through the resumes and start to recalibrate the staff with a new hire.

Do I lay off a loyal staff person when they can’t learn?
We all know it is very expensive (money, energy, time) to lay off and hire someone new. Any new hire requires you to use energy and time to train them on your firm’s method of operating, philosophy regarding client service and expectations. It is best to NOT lay off those who seemingly can’t embrace change and instead invest in training and change management first. Training can be in the form of scheduled weekly webinars, paying an outside expert or software provider to provide customized training, or having a staff person train his/her peer. Change management comes from the top. If you are not sure you are managing change properly, you can hire a coach to learn how to do this effectively now and in the future.

While you invest in training and management, you should also be scouring the earth for potential hires. A great employee, successor, or partner hire won’t fall into your lap the minute you decide you want to re-calibrate your team. It is never too soon to start networking and doing informational interviews and building your pipeline of candidates. If the training and change management does not produce the results you want, you know you can call upon a pool of qualified candidates.

Change isn’t easy—if it were, everyone would be doing it! Remember that any meaningful technology change—even implementing a new software program—takes more than 66 business days to adopt. Give your staff time to embrace the new tech and provide continuous training, positive reinforcement and examples of the long-term benefits. Most importantly, be sure to give yourself time to lead the troops with a positive attitude and realistic change management goals. Progress may be slow but as long as you’re seeing change transpire, rest well knowing your firm is on the right track.

Jennifer Goldman

 

Jennifer Goldman
Founder
My Virtual COO
Boston, MA

Editor’s Note: FPA members receive a $500 member discount on a My Virtual COO consulting engagement. You can find more information here


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Create Time Budgets to Produce Results

An adviser’s time is precious. For each available work hour, there are countless ways to consume it, and with each hour productively applied, the adviser and his or her business prospers. However, advisers are not machines that can simply be programmed for completing tasks. There is a person at hand, a person with talents, skills, histories, ambitions and preferences.

Professional services firms connect an adviser’s work effort (see the blog “Your Product is You”) to the business. Essentially, the adviser and the business become one.

Important Business Work
An adviser’s direct client service—the firm’s product—can be captured within the broad categories of wealth and investment planning such that a client’s plan leads to investment execution. Advisers trained for these specialties find these activities intellectually appealing and personally fulfilling; it is a pleasure to do this work.

The business connection to these services arrives when a client pays the fee and the firm’s revenue increases. So far, so good.

A vibrant operating business requires much more than service delivery. Sales calls must be made to fill a sales pipeline; client reports must be produced; bills must be paid; employees hired, managed and nurtured; technology vendors evaluated and selected; investment research conducted; compliance requirements completed.

This list comprises many important activities that many advisers do not like to do. They are chores and are often held in limbo due to procrastination or even neglect.

Budgeting Time for Business Advancement

Like a financial budget that allocates limited monetary resources to the most important priorities, a time budget ensures that a business’s essential tasks are completed on time and within the optimal operating range. Tasks are linked together in order for efficient use of every employee’s time. Greater efficiency means less time on a task, and this is a worthy trade-off for important tasks, but those that are not personally fulfilling.

How a Time Budget Works
Foremost, a time budget is a planning document that considers specific allocations of time (i.e. a time block) according to business priorities, job responsibilities and task sequence. While similar to a project plan, a time budget integrates a person’s assigned tasks into a single view based on a rolling week-to-week evolution.

A time budget is not for regimentation but to be a guide as executed using these steps:

  1. While formal tools are available, an Excel or Word table suffices. Or, your CRM can be used to schedule activities through the workflow function.
  2. Divide the rows into one-hour time blocks and the columns into the days of the week.
  3. List the week’s tasks to be completed keeping in mind these parameters: tasks related to the firm’s strategic and operational priorities need to be given precedence.
  4. Batch related activities together.
  5. Without considering whether a task is loved or hated, ask yourself this question: what is the best time for this task to be completed optimally? For example, schedule sales and client service activities for the peak periods in the day. Place planning tasks at the beginning of the week (for assignment) and the end (for reflection).
  6. Place each task into its best time block day by day.
  7. For unappealing tasks, spread out the work over several consecutive days in order to have bursts of focus and avoid drudgery.
  8. Important tasks are scheduled when execution will be crispest such as in the morning or the beginning of the week.

Connecting Time Budgets
At the end of each week, evaluate the results from the time budget with these thoughts in mind:

  • If a task wasn’t completed, determine if it was from procrastination, interruptions or insufficient allocated time.
  • For repeating tasks week to week, consider if the results could have been better if allocated to a different time block.
  • For the next time budget, experiment with different sequences and time periods.
  • At the end of each month, compare the previous weeks’ time budgets and summarize the results achieved and the nuggets of learning.
  • Take the monthly summaries and use them with the chain of command for the next period’s business planning as well as employee reviews.

Time Budget Warnings
A time budget is a guide to reinforce results (good behaviors) and to inform about weak spots (procrastination).

Few things are more satisfying than looking into the rearview mirror of a year’s set of time budgets and seeing significant business results, on-time delivery, improved efficiency, personal growth and the absence of regret.

Kirk Loury

Kirk Loury
President
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey


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Fiduciary Rule for the Modern World

On April 6, the U.S. Department of Labor unveiled the fiduciary rule that has been six years in the making.

Department of Labor Secretary Thomas Perez said that the new rule ensures that financial advisers will act in the best interest of their clients. Gone is the suitability standard and replacing it is a fiduciary standard.

“A consumer’s best interest must now come before the adviser’s financial interest,” Perez said.

The Financial Planning Association will be there for its members throughout the process of compliance, said FPA President Pamela Sandy, CFP®. Firms are required to comply by Jan. 1, 2018.

Sandy said the organization is working with the Financial Planning Coalition—which includes CFP Board and NAPFA—to analyze the rule and figure out exactly what it means for FPA members.

“FPA, as your professional home, will be helping you understand the rule and assisting you in adjusting to the impact the rule will have on your clients and your business,” Sandy writes to FPA members.

Members now have access to the organization’s newest Knowledge Circle on Public Policy and Regulation, which is now available to help members navigate the new law and discuss information with peers. The Knowledge Circle will temporarily be headed by FPA Chair Edward W. Gjertsen, II, CFP®.

Perez said the change in regulation is long overdue.

“The regulatory structure that protects people’s investments has not kept up with the changing landscape,” Perez said at a press conference. The rules that were in place were sufficient for days when pensions dominated the retirement field and Leave it to Beaver was popular on television, he added.

But we live in a Modern Family world now, IRAs and 401(k)s rule the roost, and people are losing $17 billion annually in fees for bad products and advice, according to a 2015 White House report.

Perez said the streamlined rule addresses concerns that many opponents had with the first versions of it, which were proposed in 2010, withdrawn, then re-proposed in 2015. The new rule has some flexibility for firms that sell proprietary products, has extended the deadline for compliance four months, and streamlined the mechanics of the contract, among other things.

“Today’s rule ensures that putting clients first is no longer simply a marketing slogan, it’s now the law,” Perez said.

Proponents of the new rule are expecting a fight from the rule’s opponents, New Jersey Senator Cory Booker (D-N.J.) said at the press conference on April 6.

But Senator Elizabeth Warren (D-Mass.) said, “We are not going back. This rule is too important for seniors, it is too critical for workers, and it is one more step to making sure our economy can grow from the middle out, not from the top down.”

Join the discussion on FPA Connect, and see below for a list of helpful links to help you arm yourself with the most current information.

 

AnaHeadshot

Ana Trujillo
Associate Editor
Journal of Financial Planning
Denver, Colo.

 

Helpful Links for More Information


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4 Steps to Practicing the Principle of Strategic Replacement

One of the most common questions I get asked by advisers who are just starting out with me in coaching is, “How can I change my business to find more success?” It’s a pretty broad question but with a little probing I can typically whittle things down to specific areas of their business that need the most change.

Some advisers think the answer lies in simply not contributing to bad habits anymore, for example, “I’m going to stop procrastinating when it comes to prospecting.” So, they try what I call the “stop technique” for a couple of days, but 90 percent of the time they end up falling back into familiar patterns.

Instead, I coach them to practice what I call, “The Principle of Strategic Replacement,” which simply states that in order to change a bad habit we have to replace it with a better one. Then you need to track your daily progress and be disciplined (and dedicated) enough to do this for at least 30 days in order to create and establish new patterns. The following steps will assist you in doing just that.

Step 1: Don’t Underestimate the Grip of Familiar Patterns
Change doesn’t happen overnight and the first step to breaking bad habits is to make sure that you understand and respect the power that they have to hold us to familiar patterns. A good analogy would be to think of replacing bad habits like removing a tree stump. It may seem like a relatively easy task on the surface but once you get below ground you may find that there are a lot of roots that were holding the stump in place. It takes time to dig out those roots, plant seed and patiently watch new healthy roots take its place.

Step 2: Identify Bad Habits and Root Causes that Need to Change
Identifying bad habits is not always easy because it takes a little soul searching. Take for instance the goal of wanting to grow your business. If you are completely honest with yourself, you may realize that the reason your practice is not growing is because you are not prospecting which would be the bad habit you want to change. Now, if we get to the root cause of that bad habit we might discover that you don’t prospect because you are afraid of rejection.

Step 3: Change Your Perspective
Once you know the root cause (in the aforementioned example it was a fear of rejection) it’s important to replace it with a new perspective. A good thing to do is to map out all of the long-term consequences of not prospecting, along with best practices to managing objections. Also, replace your fear of rejection with the knowledge that it isn’t personal which should help you to adjust your perception of the rejection. Qualifying prospects is just part of what you do and rejection is a part of that process.

Step 4: Create Strategic Replacements
The next step is to strategically plan out the new activities that will support and promote the new good habit. The more detailed you can be, the higher the probability of your success. An example would be to prospect business owners for the first hour of each day, map out what you will say, how you will handle objections, track the dials, contacts and appointments set and send that information to a colleague, manager or business coach for 30 days so that you have the accountability to keep you motivated.

Why Strategic Replacement Works
The reason why strategic replacement works is because it is a systematic process for sustaining long-term action, awareness and accountability – becoming AWARE of the root cause of the bad habit and the consequences of continuing with those bad habits; ensuring ACCOUNTABILITY for a specific plan of action; and taking ACTION on that will help inspire you to follow good habits for 30 days.

If you read this blog and need help mapping out real change, email Melissa Denham, director of client servicing at melissa@advisorsolutionsinc.com to schedule a complimentary 30-minute coaching session with Dan Finley.

Dan FinleyDaniel C. Finley
President
Advisor Solutions
St. Paul, Minn.

 

Editor’s Note: Related Financial Planning Association content that may be of interest to you include: 


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Financial Advisers Are on Board with Social Media, but Questions Still Linger

The findings of the Putnam Investments 2015 Social Advisor Study, which surveyed more than 800 U.S. financial advisers, point to the fact that social media continues to become an increasingly essential tool for advisers to communicate with their clients and build their book of business. Here are some of the study results:

  • 81 percent of advisers currently use social media for business, up from 75 percent in 2014
  • 40 percent of advisers (vs. 25 percent in 2014) use four or more social networks for business
  • 69 percent of advisers report social media is a significant component of their overall marketing effort—up from 56 percent in 2014
  • 79 percent of advisers report acquiring new clients through social media (up from 66 percent in 2014) with average annual asset gain from such clients standing at $4.6 million

These numbers appear to provide tangible proof that social media has grown to be the most direct path for advisers to reach out and influence their key audiences. However, despite this success, some degree of skepticism among advisers continues to linger. Below, I’ve listed the three most recurring questions financial advisers pose to our firm about social media.

Does Social Media Really Matter?
When confronted with this question, we consistently reply that the answer is debatable. What works for a financial planning practice may not work for a wealth management firm. And, in some cases, social media may not be a choice at all. However, before rejecting it, there are some key factors to be considered:

  • Unlike meeting a prospect face-to-face, or attending a live marketing event, social media interaction does not require travel and the costs associated with it
  • It allows advisers to exhibit knowledge and expertise to an audience beyond her or his established database of contacts and leads
  • It empowers advisers to create a sizable virtual network to develop new business
  • It helps foster conversations about an adviser’s brand
  • It establishes a bridge between an adviser’s website and her or his target audience—a good social media page will drive traffic to the adviser website
  • It enables advisers to position themselves as an expert sources at a negligible cost

How and Where Do I Begin?
Traditionally, the answer to this question has to do with what the adviser is seeking to achieve. Before engaging in social media activities, we recommend that our clients familiarize themselves with what other advisers, journalists and bloggers are doing—for example, the type of topics they cover, the frequency of their posts, the volume and quality of response they receive. This preliminary exercise will enable them to gauge whether or not social media is an effort they “really” want to pursue.

The second step is getting acquainted with a couple of platforms like LinkedIn and Twitter. After joining them and establishing suitable profiles, the next action is to create engaging content—topics of compelling interest to the adviser’s core audiences—that includes tips, guidelines and actionable ideas. Then post such content on the adviser’s website and concurrently proceed to “push” it via established social media accounts. Ultimately, your social media engagement should seek to achieve two key strategic goals: 1) engage your audience prompting it to share your expertise and guidance; and 2) direct traffic to your website.

How Can I Handle Compliance?
Traditionally, compliance is advisers’ major deterrent to social media. Often, this is due mainly to their lack of understanding on how to meet social media compliance requirements. Prior to launching into social media interaction, it is crucial that an adviser attains a good understanding of FINRA’s rules governing communication and specifically how they regulate social media activities. FINRA’s guidance, articles, podcasts and videos on this topic abound and are easily found on the Internet. To shield themselves and their firms from legal consequence arising from bad social media interaction, advisers must establish a social media policy—that includes archiving procedures and guidelines—and if needed, seek appropriate legal counsel.

With social media, like with any other type of marketing communication effort, advisers must pay utmost attention that any post, comment, tweet is FINRA compliant. For example, a post or tweet in which an adviser may support a specific stock or bond could represents a “recommendation.” As such, it could be consequently treated as a breach of FINRA’s suitability rule and bear legal consequences for both the adviser and her firm.

Claudio PannunzioClaudio O. Pannunzio
President and Founder
i-Impact Group
Greenwich, Conn.

 

Editor’s Note: Other FPA social media-related content that may be of interest to you include:


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8 Ways to Renew Your Focus as the Seasons Change

Like most people, you probably took time to kick back this summer. Perhaps you took an extended vacation, or you took three-day weekends regularly throughout June, July and August. Whatever the case may be, recent market volatility may have kick-started your return to the 40-hour workweek, as you’ve had to respond to client concerns about their portfolios.

To everything there is a season, so they say, and as each season changes, we face new experiences and opportunities, both personally and professionally. In the fall, for example, as students head back to school, there’s a sense of buckling down and getting back to business. And this is just as true for financial advisers.

How can you buckle down and renew your focus?
Buckling down often translates into activities like the following:

  1. Holding more review meetings with clients
  2. Taking extra steps to prospect for new clients
  3. Reviewing internal processes to ensure efficiency
  4. Examining your client base and potentially realigning it with your vision
  5. Rethinking your brand and the extent to which it serves a specific niche
  6. Working with your staff and partners to ensure that everyone is working toward the same firm goals
  7. Assessing the risks the firm faces from clients, employees, technology, business continuity, or natural disaster
  8. Thinking ahead to 2016 and assessing what you need to do to foster the firm’s ongoing growth and quality



For some advisers, the above activities are business as usual. They keep these items top of mind and regularly review them for any signs of trouble or inefficiency. Others advisers think about “CEO-type” issues once in a while—perhaps when they read a blog post like this. Still others think of the above as irrelevant, unnecessary and a pain in the neck. As time goes on and practices turn into more sophisticated businesses, advisers won’t be able to get away with the latter. In fact, the larger the organization, the more critical these activities are.

The approaching fourth quarter is a time for wrapping up 2015 and thinking ahead to 2016 and beyond. Why not seize the autumn momentum and adopt a “back-to-school” mind-set to take a look at your business today in preparation for next year. It will help you appropriately ground the reality of your practice today with your dreams and goals for your business in the future.

Joni Youngwirth_2014 for webJoni Youngwirth
Managing Principal of Practice Management
Commonwealth Financial Network
Waltham, Mass.