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Everyone understands, at least in theory, the value of written procedures and processes in an office. In his influential 1988 book “The E-Myth,” Michael Gerber convincingly made the connection between documentation and efficiency. Clear procedures streamline workflow and build organizational teamwork. They also promote consistency during employee absences or turnover. Ultimately, they enhance a firm’s bottom line. Today, as more solo practices become multiple-advisor firms, the need for consistent procedures is stronger than ever.

Imagine, for example, a firm with five advisors, each of whom uses a different approach to prepare for client meetings and a different approach for following up. The lack of consistency puts a burden on staff, requiring them to change gears depending on which advisor they’re supporting. That requires more time. More time means more staff, increased overhead and, ultimately, decreased profit.

What’s holding you back?
For most advisors, knowing that they need documented procedures and actually having and following them are two different things. It’s pretty easy to understand why:

  • Many firms, especially small offices, simply can’t find time to devote to the task. Since documenting processes is widely considered a pain in the neck, it’s all too easy to leave it on the back burner.
  • Some firms don’t follow a standard documentation format, leading to a hodgepodge of a procedures manual that’s confusing for employees to follow. Or, the way the procedures are written is too wordy and cumbersome.
  • A firm may not know what’s important to document. For example, it may have written procedures for taking out the trash and making coffee, but not for the larger firm-wide processes that really impact efficiency.
  • Firms sometimes struggle to keep their procedures current in our fast-paced industry, where regulations and technology are constantly in flux.

Fortunately, there’s a simple, effective documentation technique that can help you overcome these challenges: (1) identify your firm’s core processes, (2) flowchart each process, and (3) document the processes in checklist format.

The Beauty of the Checklist
For documenting procedures, checklists have a number of advantages over other formats:

  • First, checklists are short and easy to understand. At a glance, you see all the steps of the process in order and who does what. No one has excess time on their hands: Why write out lengthy paragraphs in complete sentences when a checklist, especially a color-coded one, can convey the necessary information in a matter of seconds?
  • Checklists offer a comprehensive view of a process, illustrating how the contributions of individual team members fit into the whole. Staff members see that their work is critical to the overall success of the process, and advisors see how their activities intertwine with those of their staff and directly affect the firm’s efficiency.
  • Checklists are easy to update as you refine your processes or regulations change. They also make it easier to pinpoint where problems in a process arise.
  • Finally, checklists work. The easier it is to understand the steps of a process, the more likely they are to be followed.

An Outside Perspective
It’s interesting to consider how professionals in other industries use the checklist approach to improve efficiency and outcomes. Pilots, for instance, have long employed checklists as part of their pre-flight routine. Whether he’s flying a Cessna 172 or a Boeing 747, a pilot always goes over a checklist of critical factors before takeoff. Although a checklist may not be a life-or-death matter in an advisor’s case, it can help give advisors, their staff and even clients a smooth ride during meetings, for instance, or between visits.

Checklists have recently exploded in the health care industry as well. In “The Checklist Manifesto,” Atul Gawande explains that “the checklist gets the dumb stuff out of the way, the routines your brain shouldn’t have to occupy itself with, and lets it rise above to focus on the hard stuff.” This is especially true in complex fields like medicine, with its 13,000-some possible diagnoses, 4,000 drugs and 6,000 treatments and procedures. Gawande reports that the use of checklists has become standard among physicians and staff in a growing number of hospitals, specifically in the operating room. The results are promising: Gawande’s study of eight hospitals that adopted the checklist approach found that they tallied 50% fewer infections, 47% fewer deaths and 36% fewer complications. That’s pretty convincing data.

Like the medical field, our industry is complex and constantly changing, making it a challenge to keep pace, much less improve efficiency. As simple as it seems, the checklist approach can result in big efficiency gains—if you’re willing to embrace it. As Gawande notes, many physicians resisted the concept of checklists at first. Some advisors likely share those feelings: Checklists are fine for staff activities, but not their own high-level work. However, when you start thinking in terms of core processes, you see the many ways in which advisor work and staff work intertwine; a lack of consistency in one area, be it at the advisor level or the staff level, can compromise the efficiency of the entire process. Although you might hesitate to break down your role into steps of an overall process, doing so can have a dramatic effect on your office’s efficiency and, ultimately, your bottom line.

Checklist Best Practices
Ready to jump on the checklist bandwagon? Flowcharting engages the entire firm, laying the foundation for a clear, concise set of steps that everyone has agreed upon.

Once you’ve created flowcharts for the core processes you want to document, developing a checklist is easy. Just list the steps in the appropriate sequence. To make your checklists as user-friendly as possible, keep the following tips in mind:

  1. Include the date last reviewed at the top of the page. Things change quickly in business, and a process can easily become outdated in a year. Although it may seem that you created the checklist just last month, it’s important to review your firm processes annually and update them as needed. Including the date the process was last reviewed at the top of the page will help you stay on track.
  2. Title the process. Label the checklist clearly so that anyone who sees it knows which process is being documented. (One procedure often bleeds into another, so it’s important to define where a process starts and stops when you create your flowcharts.)
  3. Be brief. Use just a few words to describe the actions required in each step. One of the biggest downfalls of most written procedures is that they simply take too long to read. Keeping the checklist succinct helps ensure that everyone will understand it and, more importantly, follow it.
  4. Indent for multiple paths. If there are several possible actions at certain steps of the process, simply indent those options so that it’s clear they depend on the prior step. For example, in a checklist detailing preparation for client review meetings, certain steps will depend on whether you’re dealing with an “A-level” client or not.
  5. Color-code the steps. Color-code each step of the process based on who performs the task. With most of a firm’s core processes, action flows back and forth between the advisor and staff. Use one color for steps the advisor completes and another color for staff. Or, if the firm is larger, use a separate color for each staff member.

It Takes a Team
Besides improving your firm’s efficiency, this documentation approach also serves as a meaningful team-building exercise. By creating the process flowcharts and checklists together, advisors and employees see how their individual roles fit into the firm’s overall operations. Staff members tend to embrace the process and the clarity it provides. Remember, it’s essential for the entire team to “own” the documentation process. Getting everyone involved creates personal accountability and helps ensure that the agreed-upon processes stick.

Documenting office processes is often considered a tedious task, and if you’re going about it the wrong way, it certainly can be. But, using this simple approach, a motivated team can document a firm’s core processes within a week—a relatively small investment of time for the efficiency payoff it can provide.


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