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The ActiFi Blog is designed to provide financial advisors with tips, ideas, and our opinions on issues related to building and growing a superb advisory practice.

Social Media - Can Advisors Participate?

Sam Richter 3/8/2010

For just about every business today, marketing gurus will tell you that if you’re not participating in social media, you’re missing out. If you own a business and aren’t aggressively promoting your company and building your brand on Web sites like LinkedIn and Facebook, if you don’t have a blog, and if you’re not communicating to the world on Twitter, then you’re losing prospective clients/customers.

Social media, by definition, is two- (or more) way communication leveraging the Web. Because a financial advisor’s world is all about timely communication and building relationships, it’s only natural that advisors want to participate in social media and communicate with prospects and clients in a real-time fashion. In addition, sites like LinkedIn, Facebook, and Twitter offer a very cost-effective way to market a financial practice and build a firm's and an advisor’s personal brand.

Unfortunately, unlike other businesses, financial advisor social network participation is fraught with challenges. Besides finding enough time in the day to effectively participate, and understanding how to best use the technologies, financial advisors have an extremely large challenge that other businesses don’t face—compliance.

For the past few years, many firms guessed at what might or might not be permissible with social networks. Many larger firms, in the absence of regulatory guidelines, forbade any advisor from participating. Finally, in January of 2010, FINRA released its social media guidelines.

Download a PDF of the 2010 guidelines at: http://finra.complinet.com/net_file_store/new_rulebooks/f/i/finra_10-06.pdf

While not all persons in the financial services industry are bound by FINRA rules, they are good guidelines to follow. If you’re an advisor who wants to participate in social networks, you should familiarize yourself with the guidelines.

Although the particulars of the new regulations leave lots of room for interpretation (and the technology is advancing far faster than the rules can keep up) FINRA is clear—you need to treat participating in social media just as you would participating in traditional media. It's also clear that using social media to interact with existing clients is very separate from using social media to market your services.

Again, rules similar to traditional media apply, for example, because you need to document and record any investment advice you may provide to a client via a brochure or letter, and if you provide advice via a social media tool like instant messaging it also must be recorded and archived. Just as you cannot make investment return promises in a print ad to prospective clients, you cannot make similar claims on your Facebook or LinkedIn account.

Where the rules start to get “fuzzy” is how they relate to the “social” aspect of social media. In the traditional world, if a reporter interviewed your client for a story on investment performance, and your client said that because of you, he had a 12% annual return on his investments, that would be allowed because you have no control over what your client says to a reporter.

But what about the social media world? What if that same client made a LinkedIn recommendation stating how you helped him achieve a 12% return—are you allowed to post that comment on your LinkedIn account? Can it be on your client’s LinkedIn profile? The answer is, “it depends on who you talk to.”

Where one compliance attorney may say that it’s permissible to have a client’s recommendation posted on a profile, another will say that no recommendations are allowed to be posted on your profile at all, even if they have nothing to do with you as a financial advisor, e.g., someone posts that you’re a great youth soccer coach.

FINRA also makes a clear distinction between static content—information that is meant to stay on a site for a long period of time—and interactive content—content that is conversational in nature and that is meant to be seen/read for a temporary amount of time. A LinkedIn profile where an advisor posts his/her work and educational experience, interests, etc., is static content. A Tweet, or instant message via Twitter, is interactive content.

The FINRA regulations state that all static content be treated like all “other Web-based communications such as banner advertisements, (where) a registered principal of the firm must approve all static content on a page of a social networking site established by the firm or a registered representative before it is posted.”

As it relates to interactive content, FINRA states “the portion of a social networking site that provides for these interactive communications constitutes an interactive electronic forum, and firms are not required to have a registered principal approve these communications prior to use. Of course, firms still must supervise these communications.”

Every firm is going to have its own rules on what constitutes static versus interactive, and thus what must be approved in advance by a registered principal and what must be supervised. Where it gets even more muddied is in the use of an advisor’s personal social media accounts.

For example, if you have an advisor at your firm, is she allowed to have a personal Facebook account? If yes, in her Facebook profile, is she allowed to mention where she works, and does that need pre-approval prior to posting because it’s static?

If she has a great day at work and helped a client achieve a great return on a specific investment, can she mention it in a Facebook post, again, on her personal account? Or how about a personal Twitter account? Maybe not the specifics, but could she post a comment like, “helped a client achieve a great return on a stock purchase today, and he can now buy the vacation home of his dreams”? Is that static, or interactive content? How can a firm be expected to “supervise” an employee’s personal account? Does that mean that all employees of a firm, on their own personal account, must “friend” or link-with their supervisor?

One thing we do know is that regardless of how your firm stands on social network participation, documenting and archiving social media posts is imperative. The good news is there are a number of technologies that help you archive your social media participation.

LinkedFA claims their technology allows advisors to interact with clients in a social network manner, and that the archiving and supervisory tools make it FINRA compliant. Companies such as Socialware, Inc. and Smarsh, Inc. help firms monitor employee social network communications. Of course, FINRA doesn’t specifically endorse any technology. But with the ruling and more companies becoming more comfortable with social network participation, you can be sure that new technologies will emerge that will allow advisors to use social networks to build their business, and serve their clients, in a compliant manner.

Although FINRA rules surely didn’t answer all of the questions, the good news is there is finally recognition that advisors may, and even should, use social networking tools to communicate with clients, prospects, and market their financial practice. How is your firm preparing?

Independence Still Growing Trend but
Congress May Change the Playing Field

Jeff Haines 2/1/2010

The number of advisors shifting toward independent models continues to grow (“More Brokers Flee Big Firms, Taking Investors With Them,” Wall Street Journal, January 4, 2010). In addition, the amount of options for advisors have never been greater or more robust.

Improved technology and the growth of high-quality outsourced options for almost every area of an advisors practice (performance reporting, back-office reconciliation, compliance, etc.) make it easier and easier for advisors to move from the traditional distribution models. However, even as this trend expands, there is a potential threat from Congress looming.

Both houses of Congress are reviewing bills that include language designed to limit the ability of companies to designate “independent contractors.” While not focused at the financial services market, these bills, if passed as currently worded, would have a major impact on the ability of independent broker/dealers to offer the flexibility of advisors using their services while remaining an independent firm.

For more information, reach “Independent Contractor Status On Senate’s Agenda in 2010,” in Registered Rep magazine).

How Will Advisors Market in 2010?

Sam Richter 1/11/2010

According to an Ad-ology Research study, in 2010, small business owners are planning to engage customers in new ways. Twenty-eight percent say they will spend at least the same or more on online video, an increase of 75% over last year's plans; 25% say they will commit more resources to social media; and 21% say the same for mobile advertising.

What does this mean for financial advisors? Most advisors build their businesses via referrals and don't do proactive advertising. Reason being is that traditional advertising (e.g. newspaper, radio, outdoor, etc.) is expensive, and the direct return on investment usually can't easily be quantified.

Even online advertising, where you are able to track clicks and visits, hasn't been a popular form of advisors marketing. There are certainly advisors who successfully use pay-per-click advertising on Google and other Web sites. Yet because it's highly unlikely that a high-net worth individual is searching Google to find a financial planner, this form of advertising doesn't make sense for most firms.

However, the marketing world is changing, and it's changing rapidly, even for advisors. More and more prospects and clients are online, and online often. What's the chance that a business owner or company executive has a LinkedIn account, Facebook account, or possibly even participates on Twitter? If we trust the numbers, well over 70%.

Almost every advisor will tell you that building a business solely through referrals is becoming less and less effective. The good news is that it's becoming much easier and affordable to reach the growing numbers of prospects and clients that are online.

Of course compliance plays an integral role on how an advisory firm can market online. Yet there is no doubt that advisor marketing is moving to social networks, online educational videos, and soon mobile marketing. What tactics and tools will be most effective? Likely, ones that aren't even invented yet!

There is no question, however, that advisors who want to grow their business stay current with where marketing trends and programs are going:

To stay on top of the latest trends, I recommend checking out the for-public articles at MarketingProfs (they also have a premium service that is pretty good).
See a short video about the Ad-ology's Small Business Marketing Forecast and learn what the experts predict for 2010 small business marketing. You can also purchase the full study.
Need help with your marketing? Check out www.marketyourfinancialpractice.com, the world's first do-it-yourself online marketing coach.

Enterprise Data Aggregation:
Old World View versus New World View

Tom Rozman 12/15/2009

Data is the fundamental driver for business intelligence, especially in the financial advisory world. Building a complete data set that comprises all of a client's investable assets and liabilities allows for better holistic financial planning as well as for the ability to dynamically generate a financial net worth statement. On an enterprise level the benefits of complete data sets are even greater where regulatory compliance and straight through processing are only a couple of potential areas for operational initiatives.

Ensuring data integrity is tantamount to making good decisions based on sound information. It seems all too obvious but so many people forget that you can't make wise decisions based on faulty data. Too often, advisors spend an enormous amount of resources making sure the technology works correctly, but don't pay proper attention to the information that is fed into the technology.

The old world view of data consolidation (combining data from various outside custodians, clearing firms, mutual funds, insurance carriers, etc.) was geared towards fulfilling the needs of individual advisor workstations or "portfolio management systems." This view has some critical limitations:

Now that data is being delivered on an enterprise basis, how do you slice and dice the data to encompass just the information that you are looking for? Most systems can give you either the whole universe or a single rep, but data capture for compliance purposes demands greater flexibility.
How do you take thousands of transaction codes, all from various sources, that have been "synthesized" or "normalized" into a standard set of codes for use in a portfolio management system and truly understand the implications of that code for other systems? In other words, how do you "un-bake" the cake and determine whether the "sweetener" is sugar, aspartame, fructose, or something else? Assumptions made within a data normalization process to work within a particular application can create errors when the same data is re-purposed for use in other applications.
How do you reconcile the entry of thousands of fictitious transactions to correct system imbalances caused by the illogical receipt of transaction or bookkeeping files with the need for data purity? Over time, this reconciliation method is highly problematic as it creates "data noise."

The good news, with the Web and more sophisticated data aggregation methods, data integrity and data capture for firm-wide use has become more achievable than ever before. The new world view:

Invest in a robust data model where n-tier organizational hierarchies can be embedded and accommodate any level of necessary reporting requirements as well as straight through approval processes.
Select vendors that subscribe to building and maintaining open, structured data sets that preserve the native purity of the transaction through a process of recording action steps rather than simply “dumbing down” the transaction complexity to more simplistic codes.
Focus on the books and records (positions) of the custodians and utilize a modern accounting system that separates balances from positions and temporarily flags system imbalances for those accounts that do not reconcile at the moment. Major vendors subscribing to this form of reconciliation do not introduce data noise for the .06% of accounts that historically do not reconcile immediately.

Only an open, transparent, structured data model that incorporates the new world view will serve the requirements of the entire business architecture. A focus on data as the foundation of good business intelligence allows a firm to choose best of breed applications based on their fit with the firms business requirements, not by the limitations of the data set and reconciliation method.

Translating Good Ideas Into Action

Spenser Segal 4/30/2009

I was at the FPA Business Solutions conference last month and thought that it was an excellent conference. There were many informative speakers who shared some very practical ideas. One thing I kept thinking about was how advisors were going to actually execute and leverage these ideas and concepts to bring value to their clients and their business.

When working with clients, we use the following model to help our clients conceptualize how to look at information and good ideas. The model is as follows:
Data => Information => Knowledge => Behavioral Wisdom

This model has been used in many forms. The most useful way to use the model is to understand the challenge of moving from the left to the right, with the biggest gap being moving from Knowledge to Behavioral Wisdom. There is an overabundance of data and information floating around and it is impossible to process it all. What remains difficult, but nevertheless achievable, is people's ability to change their behavior and adopt new behaviors in a consistent and effective way.

What struck me at the conference was how much great information and knowledge is available to advisors and how little of it is effectively implemented. One of the things that I am personally committed to and want to see happen is for more advisors to adopt powerful ideas and information into their practices. In this difficult environment, it is critical for advisors to build better businesses and deeper client relationships. Now is the time to adopt this model and focus on developing behavioral wisdom so that the proven concepts and ideas actually benefit our clients and all the advisory businesses out there.

In order to effectively do this, advisors need to recognize how difficult human behavioral change is and balance the resources they allocate to implement new ideas. Many times advisors buy a new software package or instruct their staff to implement a new idea in their business, but do not spend the time to understand the impact on their processes and more important, the impact on individual employees' job responsibilities.

A balanced approach to implementing new ideas involves spending approximately equal amounts of time on evaluating and purchasing technology or the idea, documenting and understanding the impacted processes, and change management as it relates to the specific employees who will be impacted.

Pipl - Research Prospects Prior to Meetings

Sam Richter 4/2/2009

One of ActiFi's divisions is our Prospect/Client Intelligence program where we help advisors find information to be better prepared for meetings, to help make great first impressions, and to provide ongoing value beyond planning and investment advice. You can learn more at www.actifi.com/ci

We locate information on behalf of our advisors using Web search secrets that we teach in our "Put the Relate Into Client Relationships" Training Program. You can learn more about the program and download free power search tools at the CI site. We have thousands of users of our program, and I receive quite a few notes from advisors on how valuable the tools are, and the sites that we recommend. One of my favorites for researching prospects prior to meetings is Pipl.com.

www.pipl.com

Pipl is a people search meta-search engine, meaning it's searching other "people search sites" to deliver results. Just enter in a person's first and last name, and usually the state where the person lives is all that is needed (you can also search by email address, phone number, or username/screen name). The search results include pictures of the person, public record information, social networks the person may have, blogs where the person is featured, Web sites where the person is mentioned, and even documents like PDF files where the person's name is found. It's frankly a bit scary.

The results can be overwhelming, especially if the name is a more common one. And you'll need to have some knowledge about your person so you can scan the results and know which results are about your selected person, versus results that may be about someone else with the same name. My only wish is that you could add additional phrases or words during your search, e.g. a company name, job title, etc. so your results would be more limited and more relevant. Even with that shortcoming, however, I find Pipl to be one of the best free people search engines available.

The only other negative you'll find is that it can be a bit addicting, so make sure you have some time available before you first give it a try.

Over- vs. Under-Engineering:
Configuring the workflow functionality of your CRM

Spenser Segal 11/12/2008

The Scenario
With the increased volume of client calls and concerns to address, an advisory firm's staff is getting worn out trying to fit more hours into their days. The advisor appreciates the extra effort everyone is making, but putting more hours than usual into the same clients isn't going to be a viable long-term solution. They need to work smarter, not harder. The team knows their CRM system is capable of much more than they're currently using it for, and that a few changes could simplify many tasks, but if they didn't have the time before to sit down and figure it out, they sure don't now.

Process Definition in Action
We recently went into an advisory firm who wanted to gain efficiency and consistency in their client service by embedding their processes on their CRM system. Since step one is defining their client service processes, we decided to conduct a little exercise. We gave everyone a sheet of paper and a pen, and asked them to write the words, "Defined Process," along with their definitions of the words.

Then we asked them to select a client-facing process that they all could agree was pretty well-defined. After some back-and-forth discussion, the group selected Client Onboarding.

We asked them to describe at a high level what that process consisted of, and then draw a picture of the steps involved. When they looked at each other's drawings and saw how many different perspectives there were, they realized that they really were working from different understandings of both their clients' experience and each other's roles in the process. Even their definitions of the words, "Defined" and "Process," though similar, were different enough that the team realized they were approaching the concept from many different angles. At this point, it was clear to all that their next step was to agree on a shared mental model of the defined Client Onboarding process, and more importantly, to draw the picture that tied it all together.

In our interactive, hands-on Process Workshop exercise, we put different-colored paper shapes representing various tasks and activities up on the wall. People got up and moved them around, adding and renaming pieces as needed.

Then, with guidance from ActiFi consultants, the team organized their tasks and activities into various levels of detail, defining triggers, timeframes and dependencies. This is the part where it gets fun.

There was a lot of debate as to which steps in the process should actually be considered a task, as opposed to an explanation clarifying a task, or maybe even a whole new process of its own. How do you actually break down tasks to the appropriate level of granularity? How do you get visionaries and bean-counters to agree on what level of detail is really needed?

The debate continued until all were satisfied that we had a well-rounded and thorough representation of everything that happened when a new client signed on with the firm. Then this initial definition was followed by a series of iterations and validations, as we took what we gathered on these pieces of colored paper and turned it into a diagram representing the process. Now that there was actually a shared picture, we were able to break down each step into the kind of detail that allowed us to translate the process into a set of implementable software requirements ready for encoding into the firm's CRM system.

Finding a Healthy Balance
When it comes to process definition, we've seen some extremes.

On one end of the spectrum, a firm can become obsessed with process for process' sake, and forget why they got a Customer Relationship Management system in the first place – to enable them to better serve their customers! Defining client service processes requires thorough thinking, but there's a difference between thorough and obsessive. When every single item your staff can possibly think of becomes a task, so people practically have to check a checkbox to show that they checked the checkbox, triggering an email alert for their supervisor to approve that it got checked (okay, not really, but you get the idea)…you have nothing more than systematized micro-management! Employees' inboxes and task lists become overflowing with both time-sensitive and redundant tasks and alerts, so it's hard to tell which is which, and even the most efficient and industrious of them eventually give up and go back to their old faithful post-it note systems. Not only did the rollout fail, but future attempts to revive it are likely to be met with skepticism, making it difficult to gain a return on your CRM investment.

On the other extreme, a firm can take such a high-level approach that no additional efficiency or visibility is even created. Activity and data is recorded inconsistently at best, because a) only some of the staff even use it, b) of those, everyone does it differently, and c) there are no specific reports being generated to show where gaps are occurring. When employees' task lists are full of general activities like "get referrals" and "prepare forms," they have no way of knowing which ones to start with, or when they're done. Ask whom for referrals? Prepare which forms, for what purpose? Employees get used to overlooking the tasks that can't really ever be checked off as completed, learn to ignore CRM reminders and revert to their own systems, and again, the CRM workflow is all but ignored.

What's the Answer?
As with everything worthwhile, there's not one easy answer that will work for every unique combination of skills and personalities in every firm. However, an answer can be found that works for you if you know what you're looking for – a healthy balance of guidelines, accountability, and time-saving shortcuts that enable you and your team to accomplish your business objectives according to your shared values and principles. If you haven't yet defined these, it's a good place to start. Evaluating decisions through a shared mental model or "grid" helps eliminate personal agendas and subjectivity and enable a factual, objective view into your processes as they really are, allowing you to see how well-lined-up your theory is with your practice. This will give you a clearer view of your strengths and differentiators, as well as where your gaps and bottlenecks are. Then you can determine which changes could make the most substantial differences in both your employees' and clients' experience.

With the end goal always in mind, the question of "What are we really trying to accomplish here?" should help alleviate differences of opinion on how much detail is needed. If you're trying to create a self-contained interactive user manual that any new employee in any position can follow with little or no instruction from other busy staff members, you'll need to agree on (and budget for) a deeper level of definition than the firm that "just" wants to make sure each client meeting is prepared for, presented, and followed up in the same way, by every advisor, every time. Unless you're a sole proprietor (and sometimes even then), you know this is no small feat either!

CRM: Business Strategy or Technology?

Spenser Segal 11/6/2008

Many advisors and other businesspeople talk about their CRM software so often that they have stopped thinking about what it stands for, namely Customer Relationship Management. But if you set aside the software context for a moment, that phrase looks far more like a business strategy than a technology. So what is CRM, really?

It's a Business Strategy

A key limitation of technology is that it is only as good as the business improvement it drives and the readiness of team members to use it effectively. For an example, look no further than a motorist who paid extra for four-wheel drive in their car without ever using that feature or even knowing its purpose. The point of CRM is not to have advanced technology capabilities for their own sake but instead to deliver a client relationship experience consistently and profitably.

As a business strategy, CRM is about systematically embedding best practices and powerful ideas into the way that a firm does business, so that a consistent high-quality experience is delivered to every client, every time. A CRM strategy is working if the principal can take a six-month safari in Borneo, and a junior advisor can fill in capably for her while she's gone. In order to make this happen, that junior advisor would need to have access to the knowledge and thought process that the principal goes through, in all types of settings.

The first step in developing a CRM strategy is to define a client experience that works and is right for your clients and your firm. Remember that "client experience" is shorthand for a wide variety of cases, e.g.:

A meeting with an ultra-high net worth individual involves very different preparation than one with a middle-class retiree.
Establishing a relationship with a family of five will require one type of client acquisition process (meetings, marketing materials, communications, and so forth); doing so with a small business investment committee will require another type of process altogether.

The second step is to decide how to deliver that experience. This starts with being able to define the experience at a level of precision and detail that makes it executable. Many advisors believe they already have a defined process. Suppose, however, it was a new employee's first day on the job: Would the new hire be able to successfully follow the process – e.g., deliver the exact results that the advisor expects – independently and with minimal supervision? To make sure this happens, you will need to document answers to more specific questions. For example: Which roles carry out which tasks? How are team members to communicate with each other and with the client on each task?

The third step is to determine how to execute on the client experience scalably and profitably. This is where technology inevitably enters the picture.

Yes, It's Also a Technology

One of the biggest mistakes we see made by advisors in selecting CRM systems is what we call the "check the box" mentality: when evaluating CRMs, create a matrix that details which products have which features, and then choose whichever system has the most features. This is a flawed strategy, as it represents the same logic used by the car buyer who buys the unnecessary four-wheel drive.

A more sensible approach is to consider your unique client experience, then determine those CRM software features that you need in order to deliver that experience in a systematic way. For example, if you have a large staff that requires close coordination, then robust workflow and notification features are a must. Once you have identified the features you will really use, then you can do a more focused cost-benefit analysis.

The key is how well the CRM technology enables the business benefits that you defined as part of the strategy, not how many bells and whistles it has. Therefore, each firm will weight various capabilities of a specific technology differently, and those priority weightings will drive the right decision.

What are the benefits?

The specific benefits of CRM (both as business strategy and as technology) will depend in large part on what your client experience is. But some benefits are universal to a well-executed CRM strategy:

An increase in the value of your business. A systematized business commands a higher multiple for valuation purposes.
An enhanced client experience. Your practice will be able to deliver more value for the client's dollar.
Greater efficiency and productivity. You and your staff will be able to deliver more value per hour of work, and have more time to spend with clients and prospects.
More effective delegation and resourcing of work. Client-facing staff will be better able to focus on high value-add activities.
Benefits for marketing and client acquisition. A defined process that is consistently delivered creates a competitive advantage.

Lemons Into Lemonade

Spenser Segal 10/24/2008

In the current environment of unpredictable markets, you may be fielding frequent calls from worried clients – and experiencing more than a little worry, yourself. Here are some areas of focus, for maintaining the confidence of existing clients and for finding new clients as well.

Communication
Your task is to reassure people that you understand the significance of recent events, that you empathize with their concerns, and that your advice is (if anything) more important than ever. Reach out to all of your clients via newsletters, personalized emails, Web bulletins blogs, or other media. I also encourage you to share your message with prospects and other investors who are concerned about their financial situation. Your clients trust you and want to know your overall opinion of the financial crisis. Remember to avoid jargon, maintain a positive and realistic throughout your communication, and limit references to other "experts" – especially those who are already in the media. Use your own voice.

Along with mass communication, you should also proactively contact your clients, via phone or face-to-face meetings, with a personalized interpretation of today's market environment. Many clients have seen a decline in their portfolio but nonetheless are still on track toward their goals, requiring only minor adjustments. Others will need your help in revisiting their financial plan. If you identify and talk through a change process with concrete steps, then the client will be empowered to act instead of feeling helpless. Make sure you review past plans, so you can reinforce your earlier objectives and adjust if necessary.

Financial Planning
For advisors who provide planning as a fee-based service that is separate from investment management, the crisis is in fact an opportunity to create premium value for clients. The careening up-and-down markets are beyond your control, but helping a client to plan for the "certainty of uncertainty" is well within your control. Be sure to stress this component of your value proposition in client communications.

Of course, not all advisors currently offer separate fee-based planning. Unfortunately, I cannot say that now is the ideal time to introduce new fees to clients, at a time when so many of them are likely struggling. However, you can make plans to introduce separate fee-based planning in the future. Investigate this idea, as it represents a revenue stream that is tied to controllable value rather than the market.

"Crunch-time Referrals"
The crisis also represents an opportunity to reach out to many investors who either (a) don't have an advisor at all or (b) have an advisor who is unable or unwilling to change along with the client. Referrals are more important than ever as a means of communicating your value proposition – but how you explain that value proposition matters. The standard recommendation ("I'm happy with my advisor; they do a good job for me") is not a crunch-time referral. Here is a crunch-time referral:

"I had the same concerns you did about the market. I am working with an advisor that has a defined process. We set specific goals, measure progress against each goal, and quickly account for where the gaps are and how to respond. In fact, only one of our three discussions each year is specifically about my portfolio; the rest are about my goals and how I can plan for the unexpected. I sleep a lot better at night knowing that we are prepared for a wide variety of scenarios."

Anxiety and emotions are high these days, but your confident presentation of a well-defined planning process – one that addresses all market environments – is exactly what prospects need to hear today. Make sure that you've documented your process in an easy-to-understand manner, and consider using work-flow charts that graphically illustrate your decision-making process. This logical approach will help alleviate some anxieties and position you as a trusted advisor. Remember—keep it simple.

Conclusion
By communicating with clients, reinforcing your process-based value proposition, and enhancing referral opportunities, you not only can retain clients in this difficult environment but in fact can grow your business.

My New CRM System Is Up And Running…Now What?

Spenser Segal 9/12/2008

After many months of consideration and research, you purchased a new CRM system. You were optimistic that many of the operational issues your firm had been facing would disappear and things would never fall through the cracks again. However, six months into the deployment you're not receiving the benefits you had hoped. Sure, you have noticed some improvements, but the workflow efficiencies have not materialized. Did you just spend thousands of dollars in out-of pocket expenses and opportunity cost for what seems to be a glorified Rolodex?

This is a common scenario among advisors that we see all the time. Let's start with the basics. What is CRM? CRM stands for Customer Relationship Management. CRM is not a technology or a piece of software; rather, it is a business strategy that can be enabled or assisted by adopting technology. Like any business strategy, the results are only as good as the quality of the execution.

In the financial advisory space, CRM is a strategy to deliver a consistent and high-quality financial advisory experience to all of your clients. It is also designed to deliver an effective relationship development experience to prospects. However, in order to drive a CRM-based business strategy, you need to have a well-defined client service model or models. The operative phrase is "well-defined."

I have yet to find two advisors that have the exact same definition of well-defined. For the purpose of CRM, well-defined means that the processes and tasks are defined at a level of specificity and granularity that when specific tasks or meetings are triggered, everyone involved in completing the tasks is totally clear on what they need to do and when, and they understand the dependencies within the overall process.

Following are four simple (but not easy) steps you can use to effectively implement a CRM business strategy:

Step One: Develop a clear purpose and vision as to why you want to deliver a consistent client experience to your clients, and why using technology tools will assist in enabling that. If you don't know the results you're hoping to achieve, then it is impossible to create a plan that will take you from where you are today to where you want to be tomorrow. Create a "vision story." Actually write a story on what your client service model will look like with the perfect CRM strategy fully implemented. Envision how your clients will benefit. Imagine how you and your staff will use CRM to increase efficiencies, eliminate bottlenecks, automate tasks, and free up time to spend with clients.

Step Two: Define your client service models. Conduct a workshop where you gather all of the relevant employees in your practice together to discuss what the client service experience is today and what it should be tomorrow. Share your vision and make sure to ask questions of your staff so you clearly understand their vision. Use a large wall chart to diagram how the client experience should flow and what the specific meetings, processes, and tasks are that will enable this experience to occur.

Step Three: Refine, validate, and detail the content from the workshop. Make sure that everyone is in general agreement on what meetings, processes, and tasks should occur for each service model. For example, when you bring on a new client, does everyone in the firm do the same thing, every time? When preparing for a client annual review meeting, does every advisor follow the same process and produce a consistent report, meeting agenda, and summary letter? Spend time with the people who are responsible for each task and understand what triggers each element.

Step Four: Once you have clearly defined the business strategy and what it will look like on paper (or the computer screen) you are ready to implement it using your CRM technology. The important point is not to put the CRM technology in front of the business strategy or assume that because everyone is trained on the new CRM system that they understand how to use it to deliver the practice's client service model. Remember—people first! Make sure everyone on your team is fully trained on how to use the workflow capabilities of your CRM system. Then make sure everyone understands their role in performing workflow-related tasks in CRM, and how it will help the firm achieve its objectives.

Placing your emphasis on improving your processes, and getting all of the key users' input in the process, greatly increases the probability that your CRM system will yield the business benefits you intended.

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