Executive Summary
Most financial advisors strive to provide excellent client care and prioritize a systematic process to maintain regular communication with their clients both on a scheduled (e.g., annual meeting) and an "on demand" basis. And while individual advisors running solo firms are often able to intuitively sense when they're delivering their best, as they grow and scale their firms, that same advisor eventually goes from individually 'owning' every client relationship to sharing the workload with first a client service associate, then a paraplanner, and then another advisor. Suddenly, the question of, "What does it mean to provide the best care for clients at this firm as a team?" becomes a crucial one to solve.
In this guest article, Bob Veres, editor and publisher of Inside Information (and co-producer of the Insider's Forum conference), shares how Brian Martin, co-managing partner of Accredited Investors in Edina, MN, sets company-wide standards for client communications that are both measurable and actionable, and that helped his firm more than double in size.
For firms looking to standardize procedures and create a system to measure the effectiveness of those procedures, a crucial starting point is to identify what the firm's desired outcomes are. Martin and his team drew on the standard of care in the healthcare industry and modified them for their firm by following 3 key principles: first, offering relationships with clients based on constant attention with at least 3 meaningful interactions throughout the year; second, following through on commitments made to clients; and third, providing ongoing and consistent planning for all clients, including the quieter ones.
Once the standards were agreed upon, the main question became how to define metrics and use them to determine whether the standards were being met, as well as identifying potential exceptions and determining when to escalate problems. Martin and his team started by assessing current practices and establishing practical goals based on where the team was already at to set everyone up for success, and mixing in only a few stretch goals (all tracked in the Salentica CRM). Starting with goals that reflected how things were currently being done allowed the staff to get behind the standards and build great momentum.
Over time, tracking metrics to measure the team's performance offered powerful insights that allowed the firm to better plan its capacity, not just by evolving goals to address 'overdue' communication and other high-priority tasks, but also by offering clarity into how to structure team assignments and client relationship allocations more impactfully. Other benefits also manifested from tracking the firm's progress as processes and standards were gradually refined. For example, implementing this system gave Martin's team another way to measure and articulate their workload (and when they were feeling overwhelmed). Additionally, this process helped clarify how the firm could elevate its culture around client service by refining its client interaction standards and offering an objective way for managers to measure advisors' performance.
Ultimately, the key point is that striving for stellar client care is at the heart of many financial planning firms – and devising the right metrics that help a firm assess its areas of excellence and potential areas for growth can be instrumental in establishing a flourishing firm culture based on exceptional client service. By first identifying how the firm wants to define its own standards of client service, and then evaluating how those standards are currently being met, firms can gain a clear and objective way to measure their standards, which can offer valuable insights into further cultivating a proactive culture of outstanding client care across the team!
I'm currently updating my white paper that provides a breakdown of client service standards, but the point here is that it starts with a question that hardly ever gets addressed. You hear in articles and from the lectern at industry conferences that it's really, vitally important to provide excellent client service. But when you ask the authors or practice management speakers what, specifically, that means, you never get a clear answer.
If you can't define client service clearly, how can you know if you're providing great service? If you can't track it specifically, how would you know how to improve it, or whether your efforts to improve it are working?
At this juncture in the profession's history, I know of only 1 firm that has attempted to track its client service to specific standards of care – something that I expect every wealth management/financial planning firm to do in the future. So of course I asked the co-managing partner of the firm to present the only (as far as I know) system for tracking how the firm is addressing the key aspects of client service in a systematic way – at our Insider's Forum conference.
And I'm happy to report that the presentation by Brian Martin, co-managing partner of Accredited Investors in Edina, MN, was a great success with our audience.
Healthcare Model
Accredited is not a small firm: 60 employees, $3 billion in client assets from 550 client families. Co-founder Ross Levin introduced something called the Wealth Management Index (WMI) back in the mid-1990s, which scores each Accredited client based on a few dozen specific actions organized into 5 categories – things like getting the basic estate documents completed, developing an investment philosophy for their portfolio, setting aside an emergency fund, getting the various insurance coverages in place, etc.
This defines the firm's approach to financial planning, and the key point here is that the firm has a long history of scoring what might be considered subjective or nebulous outcomes. It was the first ever gamification of financial planning.
Martin told the audience that the idea of a formal, trackable, system for monitoring Accredited's standards of care came about as email became more widely used for client communications. "We started to have this concept of on-demand client service", he said. "An issue would come up, clients would email us, and we would deal with it. That started to disrupt our WMI structure."
Another factor was the rapid growth of the firm, from 15 to 36 advisors in the space of 10 years. "And then the pandemic broke everything", Martin said. "We moved from formal planning meetings to: 'Let's get in front of clients as much as we can and deal with whatever is most pressing in their lives or in their current events as they're happening.'"
The service question became increasingly urgent: "We talked a lot about how quality of service was our strategic advantage and priority", said Martin. "So how do we make sure we're giving enough of the right kind of service? When we started to get back in the office following the pandemic", he added, "we saw that as an opportunity to step back and assess, and say: 'What do we do after our service model has blown up?'"
As it happens, there was a model to follow: Standards of care are a common concept in the healthcare industry. And Accredited had already been following other aspects of healthcare protocol, having its younger advisors (think: residents) work with clients under the supervision of more experienced members of the advisory team. "We've also been running advanced planning workshops, where we bring in new client situations to the entire group", said Martin, "and work through those together in the same way that a medical school would."
The question became: What would the advisory profession's model of standards of care look like, and how would it be similar and different from the medical ones? "We decided to follow 3 principles that we saw as the underpinnings of how we serve clients", Martin told the audience. "The first is that we want to be in constant relationship with our clients, giving them constant attention and having meaningful interactions throughout the year. We set a goal", he added, "of 3 meaningful interactions a year."
Second principle: follow-through, which Martin defined as "telling clients what we're going to do and then doing it."
Third: constant and ongoing planning for everyone. "In this on-demand world", said Martin, "there's a big challenge in making sure that the quieter clients are getting the ongoing planning in the same way that the other clients are."
So the firm set to work to more precisely define how these principles would be actuated in day-to-day client activities. Martin said that a big part of the success of the initiative came from the fact that the project was led by Accredited co-founder Wil Heupel, who provided the top-down authority to bring together 2 experienced advisors, the firm's operations director and an internal CRM developer who built the tracking features into Salentica. Getting buy-in was not a problem.
From Outline To Tracking
But what, exactly, do the standards look like and how are they tracked? You can see the general outline below, which lists the key areas of client care that the system tracks, the actual standards, and how they will be measured. The top section focuses on consistent and timely communication with clients, while the bottom section is about providing comprehensive planning to all clients. The resulting system tracks not only the number of client interactions, but the response time for returning (and even acknowledging) client calls and emails.
"Our standard is that we want most of those client communications returned by the end of the day, or at worst, within 24 hours", Martin told the audience. "We want every meeting to start and end on time with clients, every single one – and that includes having a check-in midway through the meeting. That's something we teach and then coach with our advisors", he added.
"We made a couple of key decisions as we were looking to implement a system like this", Martin noted. "First, we wanted to limit the standards to things we can actually measure. And second, we wanted to start with current practices, where we had a reasonable chance of success. There will be some stretch goals that we develop over time", he added. "But we wanted to give the team a chance to experience some wins earlier in the process."
Once the standards were set, the company created a system of tracking how it was measuring up to them in the Salentica CRM. The reader can see the early and later versions of this tracking process below. Both versions of the report track meaningful interactions with clients over time – or, in this case, clients who are not receiving their 'quota' of those interactions.
"Meaningful" is obviously subjective, but Martin clarified that merely answering a client email doesn't qualify. "Any time an advisor has an interaction with a client, whether it's a meeting or a phone call, if it is significant enough to memorialize, it is saved as an interaction report in our CRM", he explained. "As you can see, the number of what we define as 'out of touch' clients has fallen by 63% since we started this." (The goal, he added, is zero, and it looks like the firm is now achieving it.)
Other standards include followup. Are "discussion letters" sent out to clients within a week after a client meeting, summarizing what was said and listing action items? The system tracks the percent sent within 1 week and within 2 weeks, after which it becomes 'overdue', and the 'overdue' messages are tracked individually. Early in the presentation, Martin noted that this had been a long-term source of frustration for both staff and management; there was a sense that these letters should go out on a timely basis, but what did that mean and who was being held accountable? Not surprisingly, some advisors were less rigorous about sending out the letters than others – but this was not actually being tracked, so it could not be addressed.
Looking down the list, most advisors know a high-priority task when they see one, but each firm will have its own definition of how quickly those tasks need to be completed once they arise in a client situation. The key is: Once that line is drawn, how often does the firm fail to meet the self-imposed deadline?
The interesting thing about this metric is that it created some powerful practice management insights and allowed the firm to better plan its capacity. When Accredited began tracking overdue tasks, it created a new kind of clarity on which team members were starting to get overwhelmed – and therefore clarity on where and when the firm needed to hire more support personnel or reallocate client relationships from one team to another.
And of course, if you know the number of tasks that are falling into the overdue range, per team or advisor, you have another way to measure productivity and compare it across the firm.
At the bottom, under "transaction alerts", Martin told the audience that, as the standards evolved, the team creating them realized that clients valued getting rapid notice on the transactions made in their portfolios. "We added that after the fact", said Martin. "That illustrates that this is a fluid process."
Accredited began adding color-coding to the standards once the staff had become accustomed to them: green for high rate of success, yellow for something to look into, red for a standards area that needs immediate attention. Advisors can pull up daily and monthly scorecards that show the open and overdue tasks for each client and various interaction reports. Salentica is now trained to produce management dashboards showing the overall firm's performance to the service standards. Martin noted that these reports are discussed at all-hands meetings and in management meetings.
Phased Approach
Martin offered some advice to anyone who is considering implementing a service-standards tracking system. The first, and most obvious, is to have buy-in from the top; having Heupel develop and promote the initiative automatically got the attention of the staff, more so than if this had been developed by a couple of advisors who wanted to hold their more senior peers accountable.
"I don't think we fully appreciated that when we started, but we really got lucky that this was a passion project of one of our founders", Martin told the audience. "Success is going to be based on convincing staff that this is how we want to work with clients going forward."
His second piece of advice: Be realistic. "Don't make a standard of care that is not in line with how you actually serve your clients today", said Martin.
Beyond that, you need the right technology. "A lot of what we did in terms of dashboards and the ability to measure these things are because we have a CRM that can do it", said Martin. "We have a CRM partner – Salentica – that was willing to put up with us and partner with us on developing a lot of this stuff."
Finally, Martin cautioned the audience to introduce the standards and tracking process in a phased launch, getting staff members accustomed to the idea that there would be standards, familiarizing them with the initial ones, later tracking performance to those standards, and finally tracking progress and refining (or adding to) the goals. "We wanted to do this in a way where we got some wins on the board early", Martin said, "rather than having this big hairy audacious goal that everyone sees as overwhelming."
Phase 1 was simply proposing standards, mostly the idea that there would be standards. "In phase 2, we wanted to not necessarily set specific goalposts", Martin told the audience. "We wanted to make sure that folks could be successful with the standards we were setting, rather than telling them that they're failing to live up to standards we created. That was where we tentatively defined success in each area."
In phase 3, the current phase, the monthly scorecard became a management tool. "We see yellow, we know to watch that area because we have fallen below ideal", said Martin. "If we see red, the response is: 'Hey: we're failing here. We need to address this.'"
What's next? The bottom part of that initial service standards worksheet is still a work in progress. "In the future, we want to start measuring and tracking the comprehensive planning", said Martin. "Do we have all our bases covered? Are we providing full service planning, keeping our eyes on everything for our clients? That's being queued up for next year", he added, "and we'll probably follow a similar process where we roll it out in the beginning of the year with education awareness, moving to tracking progress, and finally set specific goals to make sure we're getting those measurables."
Tracking will include determining whether advisors are covering the bases of the Wealth Management Index and perhaps tracking client progress on their index, seeing how quickly or slowly they're moving toward the ideal 100 score, and which advisors are making the most (or least) progress with their clients.
And more basically, the tracking system will measure whether advisors are addressing the aspects of the score. "We want to make sure every area of the WMI matters are reviewed every 18 months for every client", said Martin.
He also hopes to include a standard of care that would see advisors doing a more systematic job of collecting what Martin called 'softer' data. "Every section, we're starting to ask the 'why' question", he said. "What's important to you about this topic? Nothing in our current standards evaluates how often we've had those conversations and then validated them, but that's the direction we want to go."
Later, he offered more insight into what kind of 'softer' interactions the firm wanted to capture: 'What types of things are most important to you about your investment portfolio? What do you worry most about with inheritance for your children?' "Those questions don't lead directly to a planning answer", Martin conceded. "But those are things we value having in our system to know how clients feel about these topics."
As for the top of the worksheet, the goal today, Martin said, is to get 75% of the total data points in the green and less than 10% in the red. Obviously, the ultimate goal is green across the board – at which point it might be possible to raise the standards.
How? One possibility is to refine the client interaction standard to measure the quality of the interactions. "There's a difference between having a meeting versus having a social interaction with a client", Martin explains. "There's a difference between having a one-hour phone call about a topic versus sending your client a text message to say that you're thinking about them."
As evidenced by the scorecards, Accredited is experiencing visible movement from red and yellow to green on standards that must have seemed ambitious at the start of this project. "Our monthly interaction reports are up 50% since we started this", said Martin.
The other interesting aspect of tracking service standards individually and across the firm is the impact it had on staff morale. "We were worried that this was going to be a source of stress for our staff", Martin told the audience. "But 18 months in, it is actually the opposite – that is, it seems to have created a comfort factor for staff."
This may have more to do with the company culture than with any general observation about service tracking. Early on, Martin painted a picture of the Accredited staff as highly-focused. "We have this intense culture around client service", he added. "It used to be this intensity around: 'You better be serving your clients well', without really defining what that means. Giving this more precise definition to them", Martin said, "and saying: 'This is what it means to serve your clients well' has de-stressed the folks who really want to meet the expectations of being a staff of high achievers."
Watching Martin's presentation, it's not hard to envision a future where (as mentioned earlier) the idea of tracking client service to specific standards becomes more widely adopted, until finally it's a part of every firm's internal management.
"I think in our firm we feel this has been a complete game-changer", Martin told the group. "We seem to have happy clients. We know we have happy staff. We are definitely doing better planning."
And he added at the end that planners who truly want to deliver exceptional service might find it difficult to know whether they've achieved that goal when the whole idea of 'client service' is too nebulous to track. Defining and tracking represents a breakthrough of clarity.
"There's a number of areas around the standards of care that we were aware of for many years and frustrated about", Martin concluded. "With this new system, we've been able to achieve goals that we struggled with for many years."
This article original appeared in the January 2024 publication of Inside Information.
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