Want a More Efficient Practice? Examine Your Core Processes

• Monitor portfolios and models

• Rebalance portfolios and models

If the firm outsources investment management, the advisor will instead need to:

• Conduct turnkey asset management program (TAMP) due diligence

• Monitor TAMP providers

Firms that offer financial planning services will also need to define their core processes in that area.

Does your binder of written procedures include these types of big-picture processes? If not, ask yourself: Which actions and activities have the greatest impact on clients, operational efficiency and the cost of running the business?

As you begin identifying your core processes, it’s important to note the difference between a project and a process. Core processes are repeated regularly (daily or weekly, depending on your practice and number of clients). Projects often have a series of steps, but once those steps are completed, the project is done and doesn’t need to be repeated, perhaps for years. Projects like implementing a new CRM system, changing your fee structure, creating a brochure or defining your tiered service matrix may make your firm more efficient, but they aren’t core processes. Think of a core process as how you do what you do every day.

Flowcharting Greater Efficiency

Just as a picture is worth 1,000 words, a flowchart can often convey much more about a process than a written document. Typically, flowcharts are more specific, clearer and less open to misinterpretation. Because a flowchart uses few words, a quick glance tells you where you are in the process. Flowcharts also make it easy to diagnose where a process breaks down and to propose solutions.

Although flowcharting can be done on a computer, many firms find it useful to start with a much more low-tech medium: sticky notes. If you’d like to give this technique a try, gather your office staff and any other advisors together and follow the steps below. The first time the group uses the flowcharting method, take care to explain each of the steps as you move through them. Remember, you’re documenting the process as it currently stands; once it’s documented, you can work on improving it.

1. Pick a process. Start by identifying the core process you want to chart. (Try to choose a less involved one the first time around.) Because processes typically flow into each other, define a specific start and stop task to delineate the process. For example, preparation for a meeting might start when the appointment is scheduled and stop when the client arrives at the office for the appointment. Don’t be surprised if you need to go back and adjust the parameters as you move through the steps below.

2. Jot down the steps. Brainstorm all of the steps between the start and stop tasks without worrying about sequence. Write each task on its own square sticky note and post the stickies on a flip chart, whiteboard or wall. You may discover that different individuals take different approaches to accomplishing a task. If the process is currently completed in different ways, include all of the variations.

3. Chart the decision points. If an “it depends” moment arises, you’ve reached a decision point: “If A, then we do X; if B, then we do Y.” For example, if it is an A client, you give him or her a leather binder. If not, you give the client a folder. Any time such a decision is involved, simply turn the sticky note, making it a diamond instead of a square, write the decision on it, and post it.

4. Put the tasks in order. When all the tasks and decisions have been posted, reorder them in the correct sequence. You may need to adjust the sequence several times before the group is satisfied.

5. Make the connections. Once you’ve established the sequence of steps and decision points (or multiple sets of steps and decisions points), add arrows between the tasks. At a decision point, you’ll need to draw multiple paths depending on the answer to the question.

You can also color-code the flowchart using different colors of sticky notes. Use one color for advisor tasks and a different color for staff tasks (or even a separate color for each staff member, depending on the size of the office). For an even more detailed flowchart, use smaller sticky notes to break out the subtasks of a particular action.

Once you have a picture of a process, or perhaps multiple pictures, the team can look objectively at what could change. This is the time to identify opportunities to eliminate steps, modify the sequence of tasks or reassign tasks within the group. After discussing the options, the team collectively decides what should be done.

At this point, it’s time to convert the flowchart into a checklist that will be included in your procedures manual. Part III of this series will focus on how to implement the processes you and your staff have agreed upon.

One Step at a Time

People support what they help create. The sticky-note approach to flowcharting your firm’s core processes is a great way to get everyone in your office on board and ensure that they all understand the process as a whole. Remember: Like eating an elephant, flowcharting is best done in bite-sized pieces, one process at a time. Stick with it, and I think you’ll find that this relatively simple activity can have a dramatic effect your firm’s efficiency.  

Joni Youngwirth is the managing principal of practice management at Commonwealth Financial Network, member FINRA/SIPC, a registered investment adviser, in Waltham, Mass. She can be reached at [email protected].