Checklists for Professional Financial Advisors

Let's clarify something.  Not all checklists are created equal.  Some are designed for people who are new to a topic or are revisiting a topic after an absence.  Planning your trip to Disney, choosing the right golf club, remodeling your kitchen -- all of these kinds of checklists are extensive and designed to prompt the user to look into things they may not know about or may have lost touch with.

The kinds of checklists I write about in this column are for financial advisors to use when they're still fluent and experts at a topic.  Some checklists may be for advisors new to a topic, like when you're selecting a new client management system or for year-end tax planning, which may include new changes to the tax code.  While I will address that kind occasionally, those aren't what I am primarily concerned with.

The checklists I advocate most of the time are intended to be used routinely.  They are intended to be used each time a particular process is conducted.  And I assume that process is probably done pretty often.  Examples might include conducting a client review, preparing a financial plan, selecting a new security to recommend.

My intention is to prompt you to confirm each critical step in the process that can easily be overlooked.  The objective is to enable you to empty your minds from tracking things and free it to engage in expert and creative processes.

There is an important difference between these categories of checklists.  Checklists for professionals must not slow the process down.  It must, therefore, be brief, and can be expressed in industry jargon or short-hand.  Checklists for professionals make the assumption that the user is an expert, so they focus only on critical steps that can easily be forgotten.  Checklists for non-professionals, or for non-routine use, may list everything involved in preparing for something or working through a process.

Financial advisors may use both in their practices.  In preparing for a client meeting, for example, you may have a checklist for yourself that includes

• Review draft reports
• Check download status
• Check asset classifications
• Submit for printing

Simple enough; maybe even so simple it seems unnecessary.  But let me tell you something about my own experience.  When I report to client, I use Albridge Wealth Reporting, and it takes the feed of outside accounts from Cash Edge.  Cash Edge can easily lose a feed from a client account.  If the client changes the password to his outside account, or if the website pops up a promotion when a client logs in, or if they change their interface to look different, or many other possibilities, Cash Edge doesn't get what it expects to see when it logs in, and it stops downloading.  If you log into the Cash Edge website, you will see an alert, in the form of a little exclamation point, along with a note of how many days it has been since it last successfully downloaded data.

When Cash Edge  passes the information through the Albridge, however, there is no flag.  There is no way of telling whether the information about outside accounts is current - unless you log into Cash Edge and check!  I cannot tell you how many times, in the rush to prepare for appointments, we missed that step, and presented reports to the client containing outdated information.

There may be a checklist for after the meeting which may include:

• List action items
• Delegate tasks
• Dictate a follow-up letter
• Schedule the next appointment
• All important steps that can easily be overlooked.

On the other hand, there may be a checklist for the client as well.  This list would be more oriented for the non-professional, and may be more comprehensive and written in plain English.  It may include, for example:

¨      Please bring the following to our upcoming meeting -

• Your most recent benefits statement from work
• Most current bank statements
• Most current retirement plan statements

¨      If any of the following have changed, please bring them as well -

• Your current health insurance explanation of benefits
• Your current Homeowner's policy
• And so on…

It would be a long list because the client has little understanding of which documents are going to be important for the advisor's consideration.  It would be long, comprising everything that may be necessary, unlike the checklist for the advisor or her staff which would be short, in shorthand, and limited to critical items.

When creating a checklist for use in your practice, then, focus on those particular elements that an expert can overlook.  Express it briefly and in the language you use around the office.  Make them quick and easy to use.  Write the lists for professionals, and it will easier to get them adopted, systematically used, and improving the consistency of your practice.