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Power in Practice: A Coaching Program to Last a Career--Part II

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For participants in Power in Practice, an in-house business coaching program offered by Commonwealth Financial Network, the course can sometimes feel like drinking from a fire hose. The program content is designed for advisors who are committed to transitioning their practices into true businesses, but its unique framework—including workshops, peer group meetings and coaching calls—gives participants the tools, structure and motivation they need to take their businesses to the next level.

A new approach to practice management

Advisors frequently comment that they just don’t have enough time to attend to practice management issues. In fact, many advisors spend more than enough time on practice management; they’re simply not focusing on activities with the highest ROI. To help advisors develop an effective practice management infrastructure, Power in Practice breaks down their responsibilities into six fundamental areas:

  • Small business leadership (i.e., embracing the CEO role and leading a thriving entity)
  • Human resources management
  • Operational efficiency and scalability
  • Consistent, targeted marketing
  • Risk management
  • Ongoing and enhanced rainmaking

Most participants can point to at least one aspect that they already have in place, an area in which the program presents an opportunity for improvement rather than completely new material.

In Workshop No. 1, (See “Power in Practice: A Coaching Program to Last a Career—Part 1,” Investment Advisor, May 2012), participants were introduced to several of the key practice management topics, including business planning, marketing and production enhancement. Their individual follow-up activities included:

  • Writing a two-page business plan, strategic directives for the next three years and up to seven SMART goals for the current year.
  • Creating or refining their firm’s human resources documents, including job descriptions for all positions as well as for the CEO, a performance review template and an employee handbook.
  • Completing a niche-specific marketing calendar with tactics to be implemented throughout the year by designated staff members.

These materials will become part of the practice management manual that each advisor assembles over the course of the program. Participants keep their manuals in electronic format, organized by the six key topics. The advisors are encouraged to bring a copy of their manuals with them to the workshops to share with their colleagues. Throughout the program, they jot down new ideas and changes in the hard-copy manual. Then, after the final workshop, they incorporate their revisions in the electronic version, ensuring that they start the next year with a complete, up-to-date manual.

Workshop No. 2

In the three months since the first workshop, the 40 participants had been talking at least monthly with their peer groups. By the time Workshop No. 2 rolled around, many of the advisors had built relationships with their fellow participants, enhancing our discussions of the session’s main topics: operational efficiency and revenue enhancement.

Operational efficiency

Advisors often say they want their practices to run like a well-oiled machine, but achieving operational efficiency isn’t second nature for most advisors. You may not love thinking about process improvement, making policy decisions or figuring out how to best use technology, but these are the areas that can yield true efficiency for your office.

Process improvement. As the famous Chinese proverb says, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” That’s the guiding idea behind this part of the workshop, in which participants use flowcharts to design efficient processes and checklists to document how those processes are carried out.

Almost all offices use the following core processes on a daily basis:

  • Preparing for client review meetings
  • Conducting review meetings
  • Following up on review meetings
  • Handling specific service issues, such as when a client calls requesting cash
  • Converting prospects to clients

Flowcharting how these processes are completed in their respective offices had a triple benefit for participants. First, they gained an understanding of all the steps in the process. Second, they realized how their own actions sometimes impede the flow of work in their offices. And third, by sharing and comparing their flowcharts with other advisors, they began to form ideas for process improvement.

Post-workshop, the advisors will use the flowcharting technique again with their staff members, working through the nine most critical processes for their offices and then converting the flowcharts into concise, easy-to-follow checklists. Indeed, working with staff to document processes—flowcharting the current steps, exploring options for improvement, making decisions about the best flow for the office and documenting the steps in a checklist—helps cement the procedure and goes a long way toward increasing a firm’s efficiency.

Power in Practice takeaway: Trying to document a current process, identify areas for improvement and decide on a new process all at the same time usually doesn’t work very well. Taking a sequential approach is more conducive to success.

Policy decisions. Another component of operational efficiency involves making policy decisions regarding:

  • The type of client best served by the practice (versus clients who would be better served elsewhere)
  • Client categorization and the criteria for each category
  • How you will define which services each client category receives (i.e., creating a tiered service matrix)

Many of the advisors were particularly interested in the time-saving potential of a tiered service matrix. For instance, if it’s established that each “A” client has a quarterly review meeting, staff can proactively schedule appointments without any direction from the advisor. Defining the service matrix can also help you think through what clients really value. Do “A” clients need or even want a quarterly review meeting?

And what about the trend of using conference calls? Would clients be just as happy or happier with two face-to-face meetings and two conference calls per year? While conference calls typically require similar preparation, the call itself is usually shorter than a face-to-face meeting. As the client population ages, many advisors are shifting toward using conference calls for clients who seem to value them.

As their post-workshop assignment, advisors will document their client categorization criteria and create a tiered service matrix—tasks that can open up big questions about a practice. One advisor left the session asking herself, “Are my higher-income clients subsidizing the work we do for smaller clients? If so, should I reduce the number of smaller clients through a partial sale or a referral to an outside advisor? And finally, how can I more distinctly define my service matrix for A, B and C clients?”

Power in Practice takeaway: Most advisors want to ensure that clients are “touched” a certain number of times per year. This is something to consider when creating your tiered service matrix. For example, “A” clients may get 12–16 touches, “B” clients 8–12 touches, and “C” clients six or fewer touches, depending on whether you’re trying to retain them.

Technology. A final component of operational efficiency is maximizing relevant technology. The key word here is relevant. Researching the many technology options available, deciding which applications fit your practice, implementing new systems and learning to use them can be a process unto itself. Often, advisors are so bedazzled by the latest technology that they overlook whether it can actually save them time. Tools for performance review and reporting, client relationship management, investment research, financial planning and model management are the few critical pieces most advisors require.

Power in Practice takeaway: The more fully integrated your technology is into your practice, the greater its potential for saving you time.

Revenue enhancement

For a thriving firm, rainmaking activity is just as essential as a strong practice management infrastructure. That’s why in every Power in Practice workshop we talk about revenue enhancement, with a focus on the three A’s—aptitude, attitude and activity.

In the movie “Invictus”, Morgan Freeman (who plays Nelson Mandela) asks Matt Damon (who plays the captain of South Africa’s Springboks rugby team) a powerful question about his players: “How do you get them to be better than they think they can be?” That’s a great question for advisors to ask themselves, too. Along those lines, the Power in Practice participants considered the following questions:

  • What self-limiting attitudes interfere with maximizing potential?
  • What attitudes spur advisors to their own personal greatness?
  • What attitudes do high-producing advisors exhibit?
  • Why do some advisors get stuck in their comfort zones?
  • Why do some advisors reach a point when enough production is enough while other advisors never experience it?

Power in Practice takeaway: Every advisor has a different definition of production success; there’s no right or wrong answer. But there is value in being aware of your own attitude and how it supports or interferes with revenue generation.

Building a community of peers

It’s always fascinating to see how different people take away uniquely different lessons from the very same workshop. One hypothesis is that, in highly interactive experiences, a great deal of the learning comes from talking and sharing with the other participants. That’s certainly the case with Power in Practice; while the program content is important, peer interaction is often just as valuable to the advisors.

Participants left the second workshop eager to apply the concepts in their own offices and to continue developing their practice management infrastructure. Knowing that they would have the support of their peer groups in the months until the next workshop certainly helped.

You may not be participating in Power in Practice, but seeking out a coach or peer network can provide that same sense of camaraderie and support—an essential ingredient when you’re seeking to make big strides in your practice.         


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