The Practice Doctor is IN

Al Depman, CLU, ChFC, CMFC, BH

Increasing the Value of Your Practice

The practice management Core Four business systems line up directly with the advisor’s four areas of genius. These geniuses are:

• Relationship Building,
• Relationship Maintenance and Growth,
• Inspiring People to Action, and
• Creative Problem-Solving and Interpretation of Information. 

You might think of these first four business systems as ways to capture and bottle the advisor’s genius, making it as transferable as possible to the other members of the practice.

The Core Four business systems are:

Client Acquisition: The Client Acquisition system reflects the advisor’s Relationship Building genius. Primarily, this is the practice’s methods of attracting quality prospects. It involves identifying a referral process, seminar procedures, product or service-driven marketing campaigns, and other name-generating sources. These processes are spelled out in detail and coordinated with available staff, database capabilities, and tracking accountabilities. 

Client Management: The Client Management system reflects the advisor’s Relationship Maintenance and Growth genius. This includes the practice’s techniques for maximizing client satisfaction through segmentation and service protocols delivered to each identified tier. Additionally, the advisor looks at the processes in place to attract additional assets from current clients and encourage quality referrals on a regular basis. Staffing, database coordination, and accountabilities are all recorded as part of the Client Management system.

Sales Process: The Sales Process system reflects the advisor’s Inspire-to-Action genius. This system embodies how the advisor orchestrates the experience a prospect goes through in becoming a client. Best practice steps include initial contact, first appointment, discovery interview (facts and feelings), post-discovery communication, presentation, close, issue, delivery, and segue into becoming part of the Client Management system. Each practice documents its unique implementation of these steps and assigned roles for advisor and staff. 

Case Development: The Case Development system reflects the advisor’s Creative Problem-Solving and Interpretation of Information genius. Here we find the advisor’s processes for taking the discovery materials, analyzing them, preparing solutions, recommendations, and a presentation. This sequence is documented, software and formats identified, and roles assigned to advisor and staff.

The Core Four systems all directly generate income and are mostly face-to-face with prospects and clients. They need to be developed quickly for survival and must be continually refined to meet the advisor’s increasing cash flow obligations.

The Infrastructure Four systems, on the other hand, are behind-the-scenes in nature. They exist to build efficiencies in the practice, enabling the advisor to spend the majority of her time in revenue-producing endeavors. While the Core Four systems reflect the advisor’s genius, the Infrastructure systems serve her genius by allowing that genius to flourish and grow.

The Infrastructure Four systems are:

Time Management: This practice system focuses on two core concerns: (1) keeping the advisor and her staff in control of the advisor’s time as opposed to allowing it to be dictated by clients and environmental factors; and (2) maximizing the advisor’s time as a rainmaker in meeting face-to-face with top clients, prospects, centers-of-influence, as well as other networking and business-building activities. Responsibilities are delegated to both the advisor and his team in the areas of telephone coverage, call prioritization, calendar coordination, and overall team integration with the database and portable devices. The execution of a “model week” that addresses the personal and professional aspects of the advisor’s life is addressed.

Communication:  This system spells out the advisor’s methods for interacting with staff, centers-of-influence, networks, community contacts, and company contacts. The tools that facilitate these communications are identified. Processes are examined and roles assigned in the hiring, supervision, and review of staff members. Methods of non-client contact are examined. Mail and e-mail screening is covered. Also reviewed is how the staff effectively uses the internet for prospecting and deepening client relationships.

Education: This system includes acquiring and encouraging designations, staying current on financial events, using the internet proactively, growing and developing staff, and educating clients. Responsibilities are delegated to both the advisor and his team in the areas of continuing education, study groups, sharing of motivational goals, exploring and developing new markets, joint work with other professionals, and staff cross-training.

Financial Management: This system includes the practice’s processes for creating a business entity that makes money and can stand up to the due diligence requirements of a potential purchaser. Elements of this include auditing income, creation of a budget and cash flow statements, death and disability plans, use of credit, and tracking advisor and staff bonus points and achievement levels.

Infrastructure Four systems do not directly generate revenue but instead build efficiencies into the practice, permitting the advisor to concentrate on the Core Four systems. With each system, the advisor needs to pinpoint best practices, identify duties and assign them to him, junior advisors, staff members, or other support services.

By exploring each business system in detail, you will be able to construct your own best practices manual. The entire purpose of a best practices operations manual, built system by system, is to increase the value of your business by ensuring that everyone on your team––including yourself––can focus on what they do best.

Excerpted from How to Build Your Financial Advisory Business and Sell It at a Profit by Al Depman.  ©2009 Al Depman and Advisor Insights Inc.  Published by McGraw-Hill Inc.

Al Depman, CLU, ChFC, CMFC, BH, a.k.a. “The Practice Doctor”, is MitchAnthony.com’s Business Practice Consultant. He is the creator of “The Practice Management Assessment” tool and materials and has authored numerous articles in professional publications on practice management, and author of the forthcoming book, How to Build Your Financial Advisory Business, to be published by McGraw Hill in 2009. Al combined his Liberal Arts studies with 10 years of management experience with McDonald’s Corporation to enter the financial services world 25 years ago. Since then, Al has evolved from an MDRT-level sales rep into a full-time consultant specializing in helping others engineer their business practices to the next level. Contact him at al@mitchanthony.com.

© 2008 Al Depman