The COVID- 19 pandemic is affecting almost every facet of daily life in America andaround the world, with changes thatmany observers believe are becomingthe “new normal” for most of us. Theindependent advisory industry has notbeen immune from its effects. The widely publicized impact on businesses, andconsequently our financial markets, ischanging our industry as well.
The silver lining is that some ofthese changes are working in favor ofseveral businesses, and the advisorybusiness is one. We’ve seen throughour clients that the ongoing investmentmarket volatility combined with thepandemic’s impact on most industries,and probably some of the psychologicaleffects of “sheltering in place,” are driving many investors — who until nowmanaged their own finances — to seekprofessional advisory help.
Here’s the bad news: The increasein business has revealed a criticalweakness in how most advisory firmsonboard new clients. The problem isthat most firm owners have not takenthe time to consider the inefficienciesof the client onboarding process, andthese can overwhelm the system duringgrowth spurts.
This strains not only firm owners,but staff who are left to serve existingclients while also handling more newclients. New business is overwhelming,and advisor burnout is not a recipe forsuccess.
Over the past several months, we
have witnessed advisors not following
up on prospects simply because they are
tapped out and don’t want any more cli-
ents to serve. Consider the revenue lost
when your advisors have halfhearted
meetings with qualified prospects and
do not follow up. This may be stifling
growth, and possibly could have major
consequences on those firms for months
or years to come.
THE GROWTH TRAP
Lack of time to follow up with clientsis the real issue when an advisory firmgoes through high growth periods. Tosolve that problem, start by looking at allthe firm’s processes and determine waysto reduce any cost-inefficiencies. Thatmeans reengineering the firm to accommodate the growth all while hiring andtraining new advisors faster.
Improving the client onboardingprocess is the easiest and fastest wayto transform time crunches and capitalize on growth opportunities. Whena new client first agrees to work withthe firm, onboarding serves as a trust-building process. Most advisory firmswill deliver this feeling of trust at thebeginning of the client relationship byproviding a detailed portfolio allocation and financial plan and front loada large amount of work in the firstthree months.
A typical onboarding process beginswhen the client schedules their firstappointment. Typically, for most advisors, it means:
Week 1: A data-gathering meeting,where an advisor determines a client’sgoals and gets detailed informationabout their financial situation.
Week 2: The advisor creates adetailed investment allocation and/orfinancial plan for a client.
Week 3: A presentation meeting,during which an advisor presents the
How to Streamline Bringing on New Clients
During this pandemic, our work has revealed that onboarding processes
are a critical component to business growth.
The problem is that
most firm owners
have not taken the
time to consider the
inefficiencies of the
process, and these can
overwhelm the system
in growth spurts.
THE FAST TRACK
By Angie Herbers