CRM and the Paperless Office
A chat with consultant Kevin Day on the best way t
By Andrew Gluck
From the March 2003 Issue of Investment Advisor Magazine
Customer relationship management should be a major focus this year in the office technology used in independent advisory practices. The trend will become irresistible as advisors learn about the benefits of adopting and adapting CRM software. CRM is a lot more than knowing clients' phone numbers, addresses, and birthdays. A good CRM application will allow you to track the workflow in your office. This is hard to do. You may need a consultant to help you get started, but the long-term payoff is big.
Most advisors start out as sole practitioners and, after some years in the business, realize their growth is limited by the amount of time they can spend with each client. Yes, they can become more efficient by using technology. But they also face a lifestyle choice—to remain solo or not.
If you decide to turn your practice into a business, it means adding staff. It means turning your way of investing, financial planning, marketing, handling new accounts, and everything else that you do into a process. When you turn your way of delivering financial advice into a process, you create a method that employees can follow. You create a methodology that a team can work on together. When you create a five-step process for handling a new account, for instance, one member of your staff will be able to handle the first three steps and then hand off the fourth and fifth steps to another.
When you grow from being a practice to being a business, not every client who comes into the office needs to be handled by you. Sure, no one will ever be as good at selling your services and no one person in your business may be as good as you are at performing all the parts of your advisory process, but you can grow a business that will have value. You are no longer selling only yourself, you are selling a brand that extends far beyond your own name. You are creating a business that you can sell and that customers know will carry on if you get hit by the proverbial bus. And CRM software is a key tool in doing this.
The most popular CRM tools for advisors are Junxure (owned by Charles Schwab), Junxure-i (owned by planner Greg Friedman), and ProTracker (owned by planner Warren Mackensen). Optima Technologies' Interactive Advisory Software is a new integrated PMS, planning, and CRM application that is being built based on Optima's core business of providing CRM software to large companies; it holds promise but is not there quite yet. Lacking the experience in working with all of these applications, I interviewed an expert, Kevin Day of Trumpet Inc., a Phoenix-based firm that has consulted with dozens of planners on CRM technology and document management.
Day's parents, Kathleen and Pat Day, run a successful planning business in Miami, and Kevin's wife, Joanne, worked for Keats, Connelly & Associates in the 1990s before founding Trumpet three years ago. Here's Kevin's perspective:
Why have you focused your consulting business on document management and CRM? We started by looking at which systems would have the biggest impact on a firm and we found that contact management and document management were the two most important. They're not necessarily the applications the planner uses day in and day out, but they are generally used by the most people in a firm. So rather than spending time on asset allocation tools, Monte Carlo tools, and other applications for the professionals, we found the problem was that once you find the asset allocation, how do you make sure it happens and gets implemented? The tools for doing the technical work were fine. But we focus on tools planning firms use to be more efficient.
Tell me about the process advisory firms have for handling clients and the technology solutions that you provide. We've found that in general, planners are not good at planning for their own businesses. We'd talk to planning firms that had no process. Planners did work as it came to them and did not have an identified process. It would have been good if we said, "We can take your current processes and automate them with technology and make them better." But what we found is that most planning firms didn't have the process to begin with. So there was nothing to optimize with technology. In the process, we also find out advisory firms don't have a marketing process to track sales leads.
What do you do about this? We work with them to find a process for marketing tasks and to manage clients. How do you make sure you are doing quarterly reviews each quarter on each client? We showed them how to track this. For example, take the marketing process. Everything from when a client first calls, who takes the call, and the possible outcomes for the call—it all must be tracked as part of a process. The planner won't necessarily be the one doing this. You need a script for people who are answering the phones, or training with a planner to identify appropriate clients. You'd be amazed at how many firms had professionals taking all these calls. Anyone who called was a potential client. We spend time helping firms find out who was not a potential client. This saves a lot of time for the professionals in the office because a screener can now take these calls before passing them on. So when a call does get to a principal, it is a qualified prospect.
ut none of this is technology consulting. That's because you must be happy with your process before you can automate it. Once that is in place, and you have a flow chart, then we can begin automating the processes. So if your marketing process consists of eight different letters, for instance, you may want to see who has received which letters and responded. Using technology, you can develop metrics and reports on progress to measure your success.
