Charlotte: "I've yet to find the perfect practice management system," explained Wally, "We have spent more money than I like to think about, and our business has been flat for the last three years—and now we're down."
Wally is addressing a serious issue: growth. So let me begin by stating that good practice management is essential to your ability to sustain any success at attracting, servicing and developing loyal affluent clients. Our wealth management team research highlights the importance of having an effective practice management process.
That said, as I indicated to Wally, there is no single practice management system or set of processes that will take any advisor's business to the next level. In effect, practice management is a hygiene factor—a necessary requirement that is only conspicuous in its absence.
So, as a coach and consultant that has been addressing practice management issues for years, it's time to clear the air by sharing 10 common myths that many advisors have come to associate with practice management.
1. I need the perfect practice management system.
Alas, this is like searching for the Holy Grail. Good luck. As I told Wally, there is no such thing. There are many good practice management systems and ideas floating around, but the best advisors have taken bits and pieces that worked for them and created their own.
------2. My sales assistant is now my client service associate.
The game has changed. If advisors don't change what they do they cannot simply change the title on their business card and expect the affluent to perceive them differently. The same is true for support personnel. Changing the title of a sales assistant without radically altering the role and delegated areas of responsibility does nothing to improve your practice management.
3. I need to find the best contact management system (technology).
CRM and technology will not take you to the promise land. In fact, I have witnessed many advisors and teams that get lost in the black hole of technology. The effectiveness of your technology and whatever contact management system you choose will depend solely on how they are used.
4. Process is King.
Wrong—dead wrong. People are King, Queen, Prince and Princess and they will make or break your process and systems. As Jim Collins stated so well in Good to Great, great companies get "the right people on the bus." You must do the same.
5. Good practice management ensures good service.
Ha! Good practice management creates the baseline to be able to deliver Ritz Carlton-quality service, but is by no means a guarantee. See myth No. 4. The affluent want personalized service and attention—nothing mechanical.
6. We already have good practice management.
Good for you. However, our research is quite clear on this issue: Elite wealth management teams—the best in the industry—embrace the Japanese concept of Kaizen (ongoing improvement). Because they embrace FedEx efficiency, like FedEx, they are always striving to improve how they execute.
7. Good practice management enables us to handle more clients.
Less is more. Less is better. Fewer clients will enable you to deliver better service. A reduced amount of smaller clients usually means more assets and increased revenues. The best teams have only two levels of service: Platinum and Gold (five star or four star). The title is irrelevant, but they only have bandwidth for clients that meet their standard. I wouldn't recommend that you develop your practice management so that you can become the Wal-Mart of financial services.
8. This focus on practice management is a ploy to push fee-based products.
The affluent want a solutions provider to assist them with the multi-dimensional aspects of their family's financial affairs. This requires advisors to devote more time with each client, provide more services and elevate their level of professionalism. In order to deliver on all this (and more), you have to embrace fee-based platforms and develop an effective practice management process.
9. Good practice management makes us magnetic in affluent circles.
Effective practice management is a hygiene factor, it is expected by your affluent clients and prospects. Hygiene factors are not differentiators, rather a platform upon which you can position your practice properly within circles of affluence. However, nobody will know the quality of your practice management if your sales skills are so well honed that they are seamless.
10. Good practice management requires lots of personnel.
Good practice management requires a commitment. Period! It is a mindset issue. I've seen teams with more personnel than they knew what to do with, and the quality of their practice management was dysfunctional at best. If you are shorthanded, this might require hiring an intern, involving your spouse, sending out correspondence at night, working weekends, etc, Good practice management requires the right people, doing the right tasks the right way, for the right reasons and for the right clients.
I hope that by dispelling these common myths I've helped bring a dose of reality to practice management.
Like I said at the beginning of this e-letter, our team research highlights the importance of having an effective practice management process. To assess your current practice management process, visit our FREE download page for our worksheet Wealth Management Team Progression Model.
Once again, we want to thank all of you who have emailed comments and questions to us. We will continue to do our best to answer each one. If you have any topic suggestions or special requests, please contact Rich Santos, publisher of Registered Rep. and Trust & Estates magazines, at [email protected].