Five years ago, John Vance was looking for ways to boost revenues at Vance Wealth Group, the Valencia, Calif.-based practice that he’d started two years before. Doing so, he realized, meant introducing more efficient systems and delegating more to his staff. But, as he drilled down further, Vance realized one area was particularly important: his process for handling new clients—specifically, the first three months or so of the relationship.
For one thing, with numerous meetings and other contacts, the effort ate up a lot of his time. As important, Vance knew those first experiences were critical for getting the relationship off on a good footing. What’s more, he says, “Because most of our clients come from referrals, I wanted to make sure everyone coming through the door had the same experience as everyone else,” he says. “Word gets around.”
To that end, Vance developed a uniform system for working with new clients, ensuring that his three-person staff was responsible for most of the tasks and allowing him to increase the time he could devote to new business development. Now, he credits much of his growth, from about $30 million in assets in 2004 to $100 million now, to those changes. “Having a consistent, uniform process for new clients—it’s an essential,” he says. “It’s not sexy, but it’s the core of a good relationship.”
Sure, you have to master all sorts of duties as an advisor—picking the right investments, producing effective financial plans, bringing in business. But, if you don’t get the first three months of a client relationship right, you’re going to be working at a disadvantage—forever. “One thing we can control is the experience our clients have and that starts at day one,” says Dalal Salomon, CEO and partner with Salomon & Ludwin, a Richmond, Va., practice with about $400 million in assets. It’s all about setting the tone for the relationship—one that, hopefully, will last for many years. That’s especially important these days, when client trust of advisors—or anyone connected to just about any institution—is low, and you need to do everything you can to create a strong and lasting bond. What’s more, as Vance discovered, the initial 100 days, with all the forms, documents, check points and meetings they require, just require lots of time. Without a smart system, you can find your days eaten up by the process.
The central task, then, is to develop a step-by-step approach that can be repeated easily, over and over and over again. How to get started? Best is to think of the 5 to 10 most important activities involved in the process and how they’re accomplished, along with a timeline for each task. In some cases, your b/d might have resources you can draw on. Vance, who runs a Raymond James Financial Services branch, for example, used samples letters, thank you notes and other communications on the firm’s practice management web site. You can also ask for input from your staff. After one employee meeting, for example, two assistants to John Gerrold, senior vice president and a financial advisor with RBC Wealth Management in Washington, DC, suggested that one person handle client onboarding, while the other assume responsibility for other operational tasks. “That made us 10 times more efficient,” says Gerrold, who has about $700 million in assets.
At the same time, don’t expect it to happen overnight. You need to pinpoint and document every step of the way—and that’s not a one-day effort. “It’s a laborious process,” says Vance.
In fact, expect your system to be a work in process, one you continually update. For example, Vance realized after setting up his system that, because he operates on the West Coast, some clients would hear the day’s news about the market, only to visit their account and not see those results reflected in their holdings. So, he now reminds them about the time difference. At another point, his staff recommended he send out just one letter about client transfers, instead of the three he originally mailed. Tweaking the process is so important, you might consider institutionalizing it. For his part, Gerrold holds weekly meetings at which the staff reviews the new client onboarding process and any problems that have come up.
One part of the process, of course, should involve a series of meetings, each with a particular purpose, designed in a specific sequence. “You have to break it up, so you don’t overwhelm people,” says Eric Brotman, who runs Brotman Financial Group in Timonium, Md. He holds three to four two-hour meetings, held a week to two weeks apart: a presentation of a financial plan, based on data already gathered during a preliminary session, along with a discussion of retirement and education planning questions; a review of the plan and starting the ACAP and transfer process; implementation of the plan—anything from life insurance decisions to rollovers; and a final follow-up, to review new and old statements to ensure there’s no confusion, review the process of getting online access, and attend to other housekeeping matters.
You’ll also need to be clear about what to expect after the initial period. After all, you don’t want clients to assume that your level of contact will stay at the same intensity ad infinitum. “You’ve got to use this time to manage their expectations,” says John Nersesian, managing director of Nuveen Investments in Chicago.
Some advisors schedule separate meetings for each spouse. That’s because you may find husband and wife have different goals –something unlikely to be revealed if you talk to both together all the time, especially if one individual tends to be more financially savvy or dominant. “It’s not unusual to see conflicting objectives,” says Simon Singer, founder of the Advisor Consulting Group, an Encino, Cal., firm that works with the clients of CPAs and law firms. He points to two new clients of a financial advisor, a husband and wife in their 70’s, who recently lost over $1 million in a Ponzi scheme, with $2.5 million still left in the till. In separate conversations, the husband revealed he wanted to continue their old lifestyle, leaving considerably less for the kids than they’d originally intended, while the wife preferred to cut back and provide a sizeable inheritance to their progeny. Ultimately, in another meeting, the advisor was able to broker a compromise: a little less income for the two to live on and a little less money for the children.
In some cases, especially if your clients are high net worth, with more complicated situations, you can also use onboarding meetings to suss out which areas to zero in on when the initial period is over. Take Gerrold, who mostly handles high-level corporate executives. He devotes the first two meetings to determining the issues that are of most importance to clients, then uses that information to fine-tune discussions to be held later on.
Of course, the other part of the process includes all the forms, letters and emails that need to be sent out and, in some cases, collected and processed. And that also requires a specific blow-by-blow plan—which documents need to be mailed on day seven, say, or when your welcome letter should go out, along with when various check-in emails will happen. “You can’t over-communicate in this period,” says Nersesian. For one thing, you’re proving to your clients that you’ll be as attentive to their needs now that you have their business as you were when you were courting them. And, it’s also a way to make sure there are no misunderstandings.
According to advisors, however, two steps early on in the process are particularly important. First, after no more than 30 days, or whenever you think your clients will have received all the important documents they need to fill out, make sure to include a check-in. Vance, for example, has his client service manager call, armed with a checklist of everything that needs to be done, from setting up online access to ensuring they’ve received the appropriate statements. “That way, you won’t miss anything,” he says. “If you don’t write it down, you’ll miss something.” Second, provide an introduction to the rest of the staff. That can be done in person or through a letter. The important thing is for new clients to know who is on the team and what each individual does.
In fact, the central glue to any system is your staff. And that means to make your system work, you need to delegate—dividing up exactly what needs to be done and who will do it, and then creating a way to keep track of everything. Each of Vance’s employees, for example, have specific tasks they’re responsible for, from mailing welcome letters to handling ACAT transfer forms.
Brotman takes that one step further. Most of his six employees attend or run parts of the first meetings. “The person who handles insurance underwriting is there when we talk about insurance,” he says. “And depending on the complexity, it may be she and I are there together or she’s there solo.” When Brotman introduced that system two years ago, he would debrief employees after each meeting to see how it went and what could be done differently. Now, he finds that’s not necessary. “I want clients to be comfortable with the entire team, and not to feel like it’s just my practice,” he says. According to Brotman, such delegation has allowed him to focus more on business development. “I don’t have to be involved in the minutiae,” he says.
In most cases, advisors use a CRM system to keep track of who should do what when. But that’s not always necessary. Low tech can work, too. Gerrold, for example, has a paper folder for each client containing an Excel spreadsheet; when a staff member finishes a particular task, he or she signs off on the sheet.
Then, there’s Kurt Jackson, who runs Central Coast Wealth Management, a Prismo Beach, Cal., firm with $TK in assets. He supplements his CRM system with a mind mapping program, which creates a visual picture of each client’s situation, including everything from their investment accounts and rental properties to personal details (Example: “Husband was a stay-at-home dad for three years”). There also are notes about to-do’s for upcoming meetings. For Jackson, who describes himself as a visual thinker, it’s a way to see all the details laid out in one easy-to-follow document. In addition, he says, “It helps everybody see if they’re on the same pages as far as what needs to be done.”
If it all sounds like too much, consider Brotman’s approach. He charges a fee for the initial process, including for the advice and planning work he does. The result? “People are much more likely to take our advice if they’ve paid for it,” he says.
