How You Can Standardize the Financial Planning Process

The more standardized the process, the easier it is to customize to the client wishes

The more standardized each process, the easier it is to customize to the client wishes

The first part of our post focused on the difference between process inputs and outcomes, using Starbucks as an example. We’ll now turn to customization versus standardization in financial planning.

In the financial planning world, there's long been a great deal of pushback on standardization, built upon the belief that since every client is unique like a snowflake, it's impossible to accomplish. Yet as I've written in the past, it's really about standardizing the deliverables and the process, not the plan recommendations and outcomes; in fact, a recent white paper by Fox Financial Planning Network makes the point that developing a "Starbucks" client experience is the key to sustainability, profitability and growth, built around the advisor CRM as a hub for not just client information and data but workflows and automation.

Perhaps even more important is that if the process that goes into planning with every client is different, there's simply no way to ensure a consistent financial planning experience, which also means there's no way to ensure it's consistently good or to reliably improve it over time.

In other words, just like Starbucks, the more standardized each part of the process is, the easier it is to customize and adapt the particular solution to the client's exact wishes, wants, desires, and needs, delivered in a profitable and efficient manner for the business. Not to mention that the improved consistency can also help clients better trust in the planner, knowing that the solutions will be consistently good for both themselves and whoever they may consider referring.

So where are the opportunities for standardization in a financial planning firm? The opportunities are everywhere once you start to look, and might include:

  • How exactly do you respond and what do you send when a prospective new client contacts you?
     
  • How do you follow up with a referral source when a referral is made?
     
  • At what point in the new client process do you sign the planning engagement, the insurance or investment paperwork, an investment policy statement, etc.?
     
  • Exactly what information is required for a financial planning client, which analyses are run, and what software is used for each part?

The list goes on and on. Until each step of the process is fully standardized, it's almost impossible to improve the process. The same applies for things like the financial planning deliverable, too; if you use the same software to do the same analyses in the same way and report the same results in the same format, you can figure out how to make the steps of creating the plan faster and more efficient, even if the reality is that the particular details of the plan will still be entirely customized for every client.

The bottom line is simply this: if standardization can allow for a premium-value experience for the delivery of a cup of coffee, or the creation of a teddy bear, turning an entirely commoditized product into an entirely personalized solution, why can't we figure out to do the same for financial planning, too?

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