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Use Automation, Checklists to Create Efficiencies

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It’s been a long time since David Edwards, president of Heron Financial Group, has had to code anything. But in the years since he stopped working in IT (he began his career in systems at Morgan Stanley in the 1980s), Edwards has never forgotten certain key principles, notably the importance of having in place a system that lends itself toward creating efficiency.

Efficiency gained by using checklists to streamline and automate essential elements in his firm enable the business to grow, he said.

“Pilots and doctors need checklists, and so do we in the financial services industry, because when you use checklists, nothing falls through the cracks, especially when you think of how this business has evolved over the past 20 years,” he said. “Back then, there was no Google. Now, clients can get quick answers to easy questions, which means I have to answer the complex questions. If I don’t have a practice that is checklisted and systematized, I am acting in chaos all the time.” 

Heron Financial’s internal systems are set up to generate a number of documents and checklists designed to keep all advisors in the loop on their firm’s clients at all times. These include a prospect information and qualification document, which allows the company to decide whether it wants to take on a particular client; an eight-page questionnaire to create what Edwards calls “a prospect’s base plan”; and an agenda sent to clients ahead of their annual review, in which they fill out the items that are of particular importance to them.

“By using these checklists, we know nothing has been overlooked, including the very important question: ‘Do you have family and friends who should be working with us?’” Edwards said.

The process also greatly reduces the “sales cycle,” Edwards said, which is the time it takes from an advisor’s first contact with a prospective client to the “first time we get paid.”

Using the prospect base plan, he’s able to determine by the end of the first 30-minute conversation whether a prospective client is the right fit for his firm. Currently, the form is a fillable PDF (it will be put online in December) and it goes to one of Heron’s client specialists, who immediately creates contact records in the firm’s CRM system and a web portal for the family in eMoney Advisor (Edwards is on that company’s advisory board). Then, Heron sends the eight-page questionnaire to the prospective client.

“Once all the critical data is in eMoney, our financial planning tool, we can go from there to create a baseline financial plan, and then circle [back] with the client for an in-person meeting or online to show them what we have learned. This generates questions that go toward making a new plan about when to retire, when to sell properties and so on, which in turn becomes a value discussion,” Edwards said.

Thanks to his IT background, Edwards is well-aware of how quickly technology changes, and that what may be a perfect system one day can become outdated, if not obsolete, the next. That’s why he believes in constantly appraising and evaluating the systems he has in place to make sure they’re well-integrated with the firm’s custodian and functioning at an optimal level.

Heron Financial did its last major tech overhaul in 2015, bringing in Redtail’s CRM platform to replace Morningstar’s, which the firm had used since 2010.

“When we did our overhaul in 2010, Morningstar was head and shoulders above the rest but it hasn’t really evolved as its competitors have,” Edwards said. “Redtail is specifically designed for investment advisors and it integrates well with eMoney.”

Thanks to a perfectly functioning system, Edwards is also able to keep his eye on how changing demographics will impact his practice. Currently, he focuses on individuals with $1 million to $10 million in assets, but he’s also aware of the fact that someone who may only have $40,000 in assets today could well have the requisite $1 million in the not-too-distant future.

“That’s why we reviewed our fee structure and service model last year and saw that we could bring in the HENRYs – the High Earner, Not Rich Yet crowd – by charging a monthly financial planning fee that is the same as a gym membership or a cell phone,” Edwards said.

He has designated a 32-year-old advisor in his firm to target and cultivate this client segment. “She is a newly minted CFP. She has grown up with this crowd and she knows their needs,” he said. “As those needs become more complex, she will become more knowledgeable.”

— Read Coders: The Business Partners You Didn’t Know You Had on ThinkAdvisor’s TechCenter.