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Making Employees Count

WHEN YOUR FIRM BEGINS TO GROW, YOU HAVE TO HIRE MORE STAFF BUT THAT'S NOT ENOUGH. YOU HAVE TO DEVELOP SOLID PROCESSES TO HELP THEM WORK EFFICIENTLY AND EFFECTIVELY. Systems: John Vance knew he needed them and immediately. Three years ago, Vance, a branch manager for Raymond James Financial Services in Valencia, Calif., decided it was time to take the leap and hire his second employee. If he wanted


Systems: John Vance knew he needed them — and immediately. Three years ago, Vance, a branch manager for Raymond James Financial Services in Valencia, Calif., decided it was time to take the leap and hire his second employee. If he wanted to grow, he needed more than an assistant who could play jack-of-all-trades. So, he hired a receptionist, made his assistant a client service manager and, soon after, brought in a para-planner.

But, Vance did something more: He started churning out one- to two-page checklists detailing the steps required to perform important projects — getting ready for annual reviews, say, or producing a monthly newsletter — the better to jumpstart employee productivity. “With a bigger staff, we had to have everything well documented, so we were all on the same page,” says Vance. “Just hiring staff isn't enough. People have to work efficiently, too.” The effort has paid off: Revenues are now over $850,000, up from $200,000 five years ago, and assets have risen to $90 million, compared to $50 million in 2006.

These days, more and more advisory firms are staffing up. Consider this: The approximately 700 advisory practices surveyed in a 2007 study by Moss Adams, a Seattle-based consulting firm specializing in financial advisors, employed a total of 6,100 people. That's up from a mere 2,800 employees in 2001. But hiring new staff and making them work productively for you are very different things. In fact, as much as you might like to complain about your employees' lousy work habits, the individual who can do the most to boost their efficiency is that person looking back at you from the mirror every day — you.

“Advisors have a tendency to blame everybody but themselves for productivity problems,” says Philip Palaveev, president of Fusion Advisor Network. “But in reality, they're the ones who control the efficiency of their operations.”

Indeed, if you want to have a productive staff, you need to work at it. For one thing, you have to pinpoint the efficiency boosters for specific types of jobs. Then you need to introduce overall processes for the entire group — systems that allow people to understand what they're supposed to do, how to get it accomplished and what everyone else's responsibilities are.

Different Strokes

Chances are, if you have, say, at least a handful of employees, they fall into one of three categories: para-professionals, administrative staff or operations employees. (In many cases, of course, there's an overlap between people in different groups). And, for each type, there is a different way to encourage efficiency. For para-professionals — financial planners, research analysts and the like — the key to productivity is standardization. That includes everything from the kinds of equities they research to the scenarios they use when creating financial plans. “If you use 20 equities, you'll be less efficient than if you use 10,” says Palaveev. “Where firms go astray is offering a number of securities that don't fall within their core value proposition.” The upshot: If one client is interested in real estate investments, and it's something you don't usually offer, it's best to politely inform that person you can't provide the service.

Take Eliot Weissberg, a branch manager for Raymond James and head of The Investors Center, an Avon, Conn., firm with about $250 million in assets. Two of Weissberg's seven employees are CFPs who also do financial planning and research analysis. Weissberg has a firm policy: He only manages discretionary accounts. Clients who ask for investments that fall outside of the firm's standard offerings are politely encouraged to look elsewhere, “so we don't step out of the box,” he says. He's only lost two clients in the last 10 years due to the policy.

The duties of administrative personnel are usually the least well-defined: They are catch-all employees, expected to pick up any slack. “A lot of the time advisors regard the duties of administrative staff as whatever we tell you to do,” says Palaveev. The result, of course, is that they're often overloaded with tasks. The solution: Creating job descriptions that delineate reasonable expectations and responsibilities.

Managing workflow is also key for administrative employees, as well as for operations personnel. In other words, have you streamlined communications between advisors and administrative and back-office people? What kinds of processes are in place for completing paperwork correctly? A good CRM system can often help.

Consider James Karabas, vice president of wealth-management services for Vestor Capital, a Chicago-based firm with about $600 million in assets and 20 employees. About a year ago, not long after he joined the practice, Karabas realized that, “things were falling through the cracks after client reviews,” he says. A portfolio might not be rebalanced, or a new account for a child might not be put through in a timely fashion. Then there were the little things, like getting birthday cards to clients on time. Karabas wanted to have that “wow effect” with clients. So he introduced a new CRM system with which he could create lists detailing the tasks that needed to be completed for each client, and assigning those tasks to one of the firm's five client service associates via email. Staffers would then make a note when they completed an assignment. The system also allows Karabas to see when he's given too much work to a particular employee, and to spread the workload out more evenly. According to Karabas, the problems the firm had been experiencing have disappeared. In addition, the firm's four advisors have been able to spend more time with clients — and they report that client satisfaction has skyrocketed.

The Big Picture

Once you've targeted specific inefficiencies in the firm, you should look at the big picture, and establish a kind of systems architecture for the whole group. This includes setting guidelines for meetings, like when they will be held, and what the specific objectives will be. Karabas, for example, recently started running weekly meetings with a single representative from each department — research, accounting and client services. The agenda usually involves a discussion of a handful of important clients, “to make sure the firm is delivering a consistent experience — and everybody learns what the clients need,” he says. As a result, for example, accountants, who don't usually deal with clients, get a fuller picture of how their work affects the overall product. Karabas has found that it helps boost everyone's efficiency.

Another approach is to hold regular one-on-one meetings with employees. For one thing, you can use these talks as occasions for frequent and informal performance reviews. Handled correctly, they can also become opportunities for employees to bring up work problems — and figure out ways to address them. That's what Paul Strebel, who heads Strebel Planning Group in Ithaca, N.Y., does. The firm, with about $100 million in assets, has 10 employees. During a recent one-on-one meeting with a para-planner, he discovered the employee was having trouble keeping up with all her work and still finding time to tackle a new project: the implementation of a new software system for tracking client accounts. Thanks to that discussion, Strebel decided to hire a part-timer to take over some of the woman's regular duties, such as daily “checking-in” calls to the firm's custodian. The result: The employee has been able to throw herself into the new project, and they expect her to be finished in just a few more weeks.

Lines Of Duty

You also have to make sure everyone on staff is clear about just what they're supposed to be doing. One tack is to produce an organizational chart with clearly defined duties, so employees see their own responsibilities — and everyone else's as well. That way, “There's no question about who processes account paperwork, who calls the client to check in and so on,” says Strebel. That's especially important for Strebel, because the practice includes three distinct service areas — accounting and tax preparation, financial planning and business consulting — with some employees working in several areas. But you don't have to run a business with multiple service areas to find that an organizational chart is useful. Weissberg's chart includes about 160 boxes describing specific jobs and who does them.

Like Vance, you can also get more granular, with detailed descriptions of key duties. To that end, about a year-and-a-half ago, Weissberg started using what he calls an “internal Wiki,” with pages devoted to step-by-step instructions for each department. Now, when Weissberg assigns an employee a task, instead of spending precious time explaining what he wants, he sends that person a link to the appropriate page. “We're all busy, and if someone needs another employee to do something for him or her, they just say here's the link, go do it,” he says.

As for Vance, he now has about 10 checklists for regular projects he considers to be particularly important. The document for annual client reviews, for example, lists such points as what information to prepare beforehand, and how to update the account afterwards. A checklist for what to do for new clients includes everything that needs to be done in the first 60 days of the relationship — from sending out a handwritten welcome letter as soon as the client has signed on, to follow-up letters a few weeks later — and it includes sample documents. Vance has also found that the checklists help new employees master their duties more quickly. When a long-time client service manager left the firm recently, for example, her replacement was able to turn to the checklist and get up to speed in a matter of a few months.

Be careful not to overload your documents with too much detail, however. And, while it's a good idea to involve employees in the process of writing them, you need to be part of the process yourself. Vance, for example, supplements his checklists with what he calls “work plans,” which are 15- to 20-page lists of processes and procedures. When he first introduced these plans, he made the mistake of handing over responsibility for writing them to employees, who included so much detail that using them began to slow people down. Vance eventually had to rework them himself. The bottom line: Creating an efficient staff takes a considerable amount of preparation and work. But, it's a task you can't ignore — if you want to keep your business growth on track.

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