Overcoming Capacity Challenges and The Role of Technology

Capacity—or rather, the lack of it—remains a top challenge for most firms and their advisors.

This is what practice management expert Grant Hicks (CIM) of Advisor Practice Management sees all too often.

From what we see first-hand here, it's quite clear that the capacity and workflow challenges of firms and their financial advisors are a direct result of legacy systems and processes.

Outdated, inefficient, insecure, and resource-intensive systems directly impede the ability to focus on providing value to clients and scaling.

Unfortunately, these legacy systems (and methods) are typically deeply embedded into internal and external processes making them difficult to move away from. However, in order to future-proof your business, it is necessary to do so.

Grant shares what he often refers to as the six (6) critical areas of capacity that advisors can and must overcome to unlock their true potential, deliver an exceptional client experience, and scale their practice efficiently.

1. Segmentation

Elite advisors typically segment their business on an annual basis compared to the average advisor who segments their business every few years. In addition, elite advisors typically have two segments, not three or four, or in some cases even more—elite advisors segment based on ideal families and everyone else.

Elite advisors are not just focused on finding ideal clients—they’re focused on finding ideal families which generate ideal revenue for their business. They know where they want to spend their time, who they want to spend it with, and most importantly, they know who they want to spend less time with.

2. Technology

Technology does a far better and more efficient job at doing repetitive tasks than people can. Elite advisors know that with the right technology in place to solve workflow and process obstacles, the sky is the limit.

From onboarding and KYC platforms, fee and reporting solutions to portfolio management, secure document management, document retention systems, and CRMs, there are several notable considerations that elite advisors are frequently assessing to continue moving the needle forward in their practice.

The right ecosystem of breed-of-breed solutions can pave the way for success in many ways.

3. Practice Management Processes

Practice management is about three things: Process, process, process.

Elite financial advisors are aware they need three clearly defined and written processes that they can articulate. Process one is the ideal client acquisition. The second process is the ideal client service. The third process is all the other processes that you need to manage your business and your practice effectively.

When you have these three processes in order and are able to easily articulate them, the path ahead to becoming an elite advisor will be much clearer and more efficient.

4. People (Human Capital)

The majority of elite teams are working well past their capacity and fully know they need to hire more people on their team to fill critical roles, including administrative.

Yet, hiring and training people is a time-consuming process and time is something that most teams do not simply have. This poses to be quite a dilemma for teams.

However, investing in the right people across your organization to fill the critical front, middle, and back-office support roles almost always yields a return on investment.

5. Delegation

You can delegate everything in financial services except prospecting. The more you delegate to your team and the more processes you have, the more you’ll be able to spend time with your ideal client’s ideal families and ideal prospects. You can also spend more time with your ideal centers of influence. With elite teams, we go through a delegation checklist and see where we can delegate and save the advisor a tremendous amount of time by putting processes into place.

6. Time Management

Your goal this year and every year for that matter should be to find, or rather “create” extra time for clients and for yourself.

Exactly how you end up doing it is entirely up to you, but we recommend starting with owning your calendar and managing it on a daily, weekly, and monthly basis.

The reality of it is that the majority of us have bad time management habits and owning/taking control of your calendar is one of the easiest ways to curb bad habits and be well on your way to being incredibly efficient with how you’re spending your time and who you’re spending it with.

Technology is the Lifting Mechanism to Scale

Through a series of meaningful conversations with representatives and executives at leading Broker-Dealers and RIAs (Registered Investment Advisors), here's what we know to be true...

Having the right technology in place does far more than address the second area of capacity — it helps firms, and their advisors build efficiencies and capacities across the entire organization by addressing all six fundamental areas of capacity, enabling advisors to effectively scale their practice and win the hearts, minds, and wallets of their clients.

This quote from Teresa Leno, Founder and CEO of Fresh Finance, sums it up perfectly.

"Capacity and technology go hand in hand! Tech is the lifting mechanism to help firms and financial advisors scale!"

Delivering Document Handling Capacities to Scale

Paper systems and processes are often the incumbents of terribly slow and inefficient work.

The many document-heavy processes around account transfers, new client onboarding documentation, distributing monthly or quarterly statements, providing advisors with commission statements, and just about everything else in between, not only costs a considerable amount of money but is a heavy resource drain, taking away capacity where it is needed.

Firms become reliant on FTE capacities to handle the burden of manual, paper-driven administrative tasks, taking away from their ability to spend time on client engagement, growth, and core strategic initiatives.

If this is happening to your organization, it's time to rethink, re-evaluate, and re-implement your approach.

Organizations that leverage the latest innovative technologies, notably secure digital vault platforms, to materially augment systems and workflow processes will gain competitive advantages that result in efficiencies across every level of the organization and improved information security and compliance capabilities, and importantly provide considerable value to their clients by making it easier to do business with your firm.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.