The Efficient Practice

An essential guide to tools and techniques for achieving efficiency, productivity, and profitability in financial advisory firms

As a profession, financial advisors have been very well educated on how to be a financial advisor, but the industry does a poor job of preparing financial advisors to be great business owners. This book presents the Profit-Driven Architecture, a visual way of viewing the operational structure of a financial practice.

• Provides a concrete way of understanding and improving the interrelationship of different parts of the operations of a financial practice firm
• Explains how to increase the efficiency, productivity, and profitability of the firm, recognizing the interrelationships with one another
• Reveals how to increase the capacity and value of the practice

Given an aging population of financial advisors and increased focus on succession planning, increasing the value of a financial practice is a key deliverable of efficiency and this book showcases the best ways to do so.

Introduction xi

Part One Management Efficiency

Chapter 1 The Efficient Management Philosophy 3

Communication Is Key 4

The Irony of Micromanaging 7

Delegate, Don’t Dominate 10

Summary 18

Chapter 2 Managing Resources 21

Efficiency versus Efficacy 21

Outsourcing 26

Downsizing 29

Managing Change: A Process of Inclusion 31

Summary 34

Chapter 3 Managing People and Communications 37

Step One: Pre-hire Preparation 37

Step Two: Background Information 38

Step Three: The Interview 39

Developing a Compensation Plan 40

Handling Confidential Information 45

Two Examples 46

The Holistic Approach 47

The Right Job Done by the Right People 53

Summary 56

Part Two Technology Efficiency

Chapter 4 Client Relationship Management 61

Leveraging Technology 61

Summary 71

Chapter 5 Other Software Issues 73

Evernote 73

Digital Note-Taking Tools 74

Tablets and Storage Solutions 75

Rebalancing Software 79

Summary 82

Chapter 6 Systems Integration 85

Software Integration and Communication 85

Protecting Client Data 88

Summary 91

Part Three Process Efficiency

Chapter 7 Building Procedures 95

Financial Plan Production Procedure 97

Flowcharts 100

Business Continuity Plans 102

Social Media Policies 105

Using Technology to Standardize Client Service Procedures 108

Summary 112

Chapter 8 Workflow Management Systems 115

Project Management Workflows 122

Workflow Systems: Efficient Methods for Tracking

Tasks in the Office 125

Summary 127

Part Four Design Efficiency

Chapter 9 Office Space Utilization 131

Creating a Paperless Office 132

Communications in the Office 135

Auditory and Visual Distractions 135

Outsourcing 138

Improving First Impressions 138

Feng Shui Tips for Your Business and Office 140

Summary 142

Chapter 10 Efficient Branding 145

Blue Ocean Strategy 145

Marketing Services 152

Efficient Websites 152

Summary 156

Afterword 159

Impact on Productivity, Profitability, Time Management, and Firm Capacity 161

Impact on Business Valuation 161

First Case Study 162

Second Case Study 165

About the Companion Website 171

About the Author 173

Index 175

David L. Lawrence, AIF®, has over thirty-six years of experience in leadership and management. He is a veteran of the U.S. Navy during the Vietnam War, having spent over 4 years on active duty as a non-commissioned officer, and later as a commissioned officer in the Naval Reserves. His service in two war zones, first in South Vietnam near the end of the Vietnam War, and later in the Middle East, provide a courageous backdrop to his leadership experiences. His compelling story of military leadership during a time of domestic political unrest is truly inspirational.

Following his military career, David used the GI Bill to send himself through 7 years of college. David then spent 18 years with a major financial planning firm as a Senior Financial Advisor, Training Manager and District Manager. He has also worked for two large independent financial planning and asset management companies in senior management positions. His responsibilities have included managing large numbers of employees as well as setting up employee hiring, training, evaluation and compensation systems. His background and experience in integrating technological systems with management needs has given him a unique perspective on the use of technology as a leadership tool.

David has spent the past several years writing and speaking. He founded EfficientPractice.com, a consulting company devoted to growth efficiency ­solutions for professional businesses and in the ­financial services industry. His speaking engagements have taken him all across the United States, Canada and the Far East.

Financial advisors are well educated on how to be a financial advisor. But what about being a successful business owner? In The Efficient Practice: Transform and Optimize Your Financial Advisory Practice for Greater Profits, David L. Lawrence explores the operational structure of a financial practice using his Profit-Driven Architecture, which offers a proven method for moving financial advisors from one-person operations to successful businesses.

Because of the industry’s focus on licensing and certification, financial advisors are often ill-equipped to move their business to the next level and grow beyond current capacity. Questions remain about how to effectively run a growing business, how to leverage technology, and how to address operational challenges that come with expansion. This book bridges the knowledge gap by providing proven advice to propel businesses forward in the marketplace, increasing capacity and improving the overall value of the financial practice.

Lawrence offers a holistic approach to all areas of financial practice operations that is based on nearly three decades of experience in the financial services industry. Having worked as both a financial advisor and as a manager, Lawrence discusses proper management techniques to create systems that greatly expand your net profitability and efficiency as a business. His Profit-Driven Architecture model outlines proper management of people, best practices in communication, processes to optimize efficiency, and smart use of technology. The book covers not only how to properly leverage existing technology to manage client relationships, but also the various types of software on the market that can be used for storage, note-taking, data protection, and communication.

The Efficient Practice: Transform and Optimize Your Financial Advisory Practice for Greater Profits moves you beyond financial advising and planning, and into infrastructure and operations. As your firm begins to grow from a single-person entity into a thriving business operation, the right knowledge is necessary for you to take your growing business to the next level – above the revenue ceiling.

“David Lawrence starts with the truth: many financial advisory business owners know how to create a financial plan but don’t know how to run a business. He then goes on to create what just might be the next bible of business management, telling us how to manage people, technology and workflows. If you’ve hit a profitability ceiling with your practice, this is the book for you.”
—David J. Drucker, MBA, CFP®, Partner, Virtual Office News, LLC, creator of the Technology Tools for Today Newsletter and Conferences

A holistic approach to efficiency, productivity, and profitability for financial firms

Financial firms, author David L. Lawrence argues, don’t recognize that the cause of stagnating revenue and an inability to reach growth targets is often caused by the owners themselves. In The Efficient Practice: Transform and Optimize Your Financial Advisory Practice for Greater Profits, Lawrence explores the tools and techniques needed to bring firms above their current revenue ceiling, achieving the highest possible levels of efficiency and profitability.

The Profit-Driven Architecture model provides a visual roadmap for viewing the operational structure of a financial practice. It takes readers all the way from basic management efficiencies to technology best practices to proven branding strategies. Using this model, the book will:

• Provide a concrete way of understanding and improving the interrelationship of different parts of the operations of a financial advisory firm
• Find ways to enhance organizational processes that increase the profitability of the business
• Increase capacity and practice value to drive business growth and provide a framework for succession planning

For many financial advisors, establishing a meaningful client base and earning enough money to make ends meet inevitably become the unstated long-term financial goals of the business. But many financial advisory professionals are unaware of the improvements to their organizational processes that can help them create a mature business infrastructure and a company that can grow far beyond their initial vision of success. David L. Lawrence guides financial professionals through the processes that can propel your practice forward and help you realize your full earning potential.