Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Practice Management > Building Your Business

The Checklist Solution

Your article was successfully shared with the contacts you provided.

I’ve just finished reading a wonderful book. It’s really helped me pull together my thinking on “best practices.” Before I tell you about it, let’s talk for a moment about this fabled treasure, “best practices.”

The term “best practices” gets batted around. Many writers seem to mean “good ideas.” Just as one encounters “style drift” in monitoring investment managers, one sees, especially here, “word drift.” Consider:

“The Vanguard Target Retirement target date funds employ best practices with low fees, a high level of transparency, and prudent investor-oriented management, according to Morningstar’s research,” reported an article in the Sept. 9, 2009 Investment News.

Other mentions refer to best practices without actually specifying them.

“More than 90 [percent] of wealth managers today make it their priority to learn and implement best practices of leading advisors,” wrote CEG Worldwide’s John Bowen in Financial Planning magazine.

In still other cases, one would have no clue how to implement a best practice.

“A common element of best practice advisors is their ability to self-actualize their practices. In essence, this means making the conscious decision to craft a business model that serves longevity clients, rather than simply accommodating the needs of retirees as part of a more generalized practice.” That was Dennis Gallant, right here at Research in February.

My question about best practices is simple: Where’s the beef? Are we dealing here with a case of the Emperor’s New Clothes?

Make a List

With this as background, let me now introduce you to one of the best books I’ve read in a while, The Checklist Manifesto by Atul Gawande, a surgeon (general and endocrine) at Brigham Young Women’s Hospital. A terrific writer too.

First let me address a likely question: Why read a book about checklists by a doctor? Answer: because his discoveries have a lot to do with any complicated industry.

In his book, Dr. Gawande tells the gripping story of how lives were saved and infection rates slashed by a device that may also prove useful in saving businesses: the lowly checklist.

Consider the story of just one checklist developed by a Dr. Peter Pronovost. He became concerned about infection rates when a surgical team inserts a central line into a patient’s body. He came up with this checklist.

  1. Wash your hands with soap.
  2. Clean the patient’s skin with chlorhexidine antiseptic.
  3. Put sterile drapes over the entire patient.
  4. Wear a mask, hat, sterile gown, and gloves.
  5. Place sterile dressing over the insertion site once the line is in.

Silly, right? We’re talking operating rooms in one of the great hospitals, Johns Hopkins. But consider: Dr. Pronovost asked the nurses to observe the doctors. In more than a third of the cases, they skipped at least one step.

Over the course of the year, the hospital administration empowered the nurses to ensure the checklist was done. The results were stunning. So-called “line infection” rates went from 11 percent to zero.

Hmm. That checklist looks like a “best practice” to me.

According to Dr. Gawande, here’s why a simple checklist is vital in any complicated activity: “We have accumulated stupendous know-how. We put it in the hands of some of the most highly trained, highly skilled, and hard-working people in our society. And, with it, they have indeed accomplished extraordinary things. Nonetheless, that know-how is often unmanageable. Avoidable failures are common and persistent, not to mention demoralizing and frustrating, across many fields–from medicine to finance, business to government. And the reason is increasingly evident: the volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely, or reliably. Knowledge has both saved us and burdened us.”

Does this sound like an industry you know about? Then you will enjoy the chapter on “The Hero in the Age of Checklists.” In it, Dr. Gawande details how three investment managers use checklists to achieve superior performance.

Checklist Benefits

My experience with checklists goes back to my days in grad school when I scrounged together some money to take flying lessons. My flight instructor pounded into my head, “Do your pre-flight checklist or you might die.” I got the message. In many respects the entire marketing system I built has a series of checklists as its foundation. These checklists enable team members to:

  1. Avoid mistakes due to interruptions. You can pick up where you left off.
  2. Give a uniform standard of good service.
  3. Ensure new team members follow the same procedure.
  4. Perhaps most importantly, using a checklist you should be able to capture, and then implement, a best practice you read or hear about.

What would a checklist look like?

First of all, you don’t have to call it a checklist. You could call it, as does Ritz Carlton, “The Three Steps of Service.”

  1. A warm and sincere greeting. Use the guest’s name.
  2. Anticipation and fulfillment of each guest’s needs.
  3. Fond farewell. Give a warm good-bye and use the guest’s name.

Few would argue that the Ritz Carlton “Three Steps of Service” constitutes a best practice. Perhaps the best practice for implementing a best practice is: embed it in a checklist.

So a best practice could, or even should, be in checklist form.

Let’s consider some other characteristics of a checklist.

A checklist would ideally be simple.

It would be thorough.

It would provide the best way to handle a recurring problem or opportunity.

Consider something you do every day: talk to clients. Do you always get the information you need? Are you prepared?

Here is a vital best practice. I call it “The Law”: “Every contact and contact attempt with a client or prospect produces an updated record in the computer.”

The Law will save you. It is the foundation of the marketing system I created. Hardly a month goes by that I don’t get an e-mail or call thanking me for teaching the discipline inherent in The Law.

Just consider: You can be right. Your investments can be suitable. Your service can be impeccable. But all it takes is one bad-apple client alleging unsuitability to destroy a career built over a lifetime. Unless you can prove you followed the four principles for suitability in FINRA 2310, you could have followed them and still have your goose cooked.

To implement The Law you need a checklist. To implement FINRA 2310, you need a checklist. I have written several checklists for you. Consider one I recommend for preparing for a client call:
__ Review client account.
__ Review last few notes. Outstanding issues?
__ Review profile. Am I up-to-date on __financial status __tax status __investment objectives __other reasonable information needed.
__ Decide on an objective for the call ___________.

Now set an agenda:
__ Check how their family is doing.
__ Ask the client what’s on their mind.
__ Agree on an agenda.
__ Check for additional funds.
__ Check for outside investments.
__ Promote referrals.

Then you should have a place to write:
__ Notes (what did happen).
__ Actions (what will happen).
__ Opportunities (investments or events that will result in cash available in the future).
__ Outside investments discovered.
__ Service issues.
__ Referrals received.
__ Message to send.

At the end of the call, your notes are done. Ideally you have someone who can properly process them. If not, you’re it. Our recommendation is: you set aside time each day to process your notes — part of yet another checklist, the Model Day.

I’ve gone back through some past articles I’ve written for Research. Based on these, I’ve created some “Best Practices Checklists.” You will find them at, on subjects ranging from getting published to evaluating wholesalers to surviving in tough times.

Bill Good is chairman of Bill Good Marketing. His Gorilla CRM System helps advisors double their production or work half as much. Visit his website.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.