Top 10 Habits to Drop

In a recent article on Morningstar advisor, Allyson Lewis, author of The Seven Minute Difference, describes how to implement better practices by letting go of bad practices. It's worth a read.

I'm dedicated to helping financial advisors consistently do what's important, and this article has lots of good tips for accomplishing exactly that. Included in their practice management list is a reminder of the importance of something that I focus on, having repeatable systems and processes.

Lewis also names other productivity killers including telephones, e-mail, disorganization, unfinished tasks, lack of goals. I will go further than she does on a couple of the recommendations. The article jumps from mission and vision to 90 day goals. I think there's value in one-year, if not three- or five- year goals. David Allen refers to these as the 30,000 and 50,000 foot views of life.

Lewis also recommendations setting aside 30 minute blocks of time unbroken by phones or e-mail to work on projects and tasks.  I prefer the discipline of checking e-mail at specific times of the day, limiting it to three to five times over eight hours.

One item I especially appreciate is the recommendation on the importance of roles. Knowing who should do what, and dedicating time only to those activities that fit within your role, is a crucial time management discipline. With this article as inspiration, I may post some thoughts about roles as well.

Lewis has assembled some valuable tips in a quick read that's worth checking out.



Your Daily Morning Checklist

I am a fan of to-do lists.  Every morning, I consult one to see what I should be doing.  But there is another step I need to do to make sure that tasks that should be there are included.

Other fans of David Allen’s Getting Things Done discipline know that the key to “stress free productivity” is having a system that will present to you what you need to see when you need to see it, and to make sure that the next action on each of your commitments is in front of you as often as practical.  The To Do list is great at telling you what you need to accomplish today, or what your priorities were yesterday.  But what about that thing you committed a month ago to do tomorrow?  Or remembering that thing you need to do every Wednesday? 

It would be great if there was one system into which you can dump everything you need to do, and have it alert you when each item is due.  Like most of you, though, life doesn’t lend itself to that kind of simplicity.  My client relationship management (CRM) system keeps track of what I need to do for clients.  I am doing a little work for Advisors4Advisors.com, and we use a separate system to collaborate, including shared tasks.  There are personal things that appear on my calendar that need doing (did I get my son his graduation present yet?).  Then there are those personal errands that do not have a place in any of those systems.

Though I shouldn’t admit it, I have my own struggles with paper to-do lists.  In the past, I have spent more time than I wanted transferring today’s incomplete tasks to tomorrow’s new list.  During particularly busy weeks, I may even skip that step, and end up by week’s end with half a dozen incomplete lists that need triage and consolidation.  In regard to that particular challenge, I have started moving tasks to the on-line task management system Nozbe.  When I check something off, it disappears that night, and the lists are automatically updated.  I can access tasks at home, on my Blackberry, or anywhere I can an internet connection.  It is an awesome tool, and I recommend it highly.  I am gradually learning to use its powerful features.  But that is beyond the scope of this post.

So I am stuck, like most of you, with multiple systems that each have things that can be missed and cause me to fall short on a commitment.  To bring it all together, I have a simple morning checklist I go through to make sure I know what I need to do.  Nothing complicated, just a quick run down to confirm that I have checked each of the places where I have recorded the promises I have made to myself, my family, and my clients.  Anything coming up on the calendar?  Check.  Client tasks I scheduled for today?  Check.  In five or ten minutes, I can be sure I have not missed anything that needs to happen today.

I have posted the list I use here, and you can probably customize it easily to work for you.  I still have to do a weekly review, but this provides a quick, daily routine to keep me on the straight and narrow between my less frequent, higher level reviews.

Do you have a morning routine to help keep you organized?  I would love to hear your ideas!



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.

I’m lost without my checklist!

A friend of mine recently closed his financial advisory business in New York and moved south, re-establishing his practice, and he described a great case study and the value of checklists.

His practice revolves around corporate benefits.  Recently, he received a call from a business prospect in the new area who accepted a proposal.  "Yes", said the new client, "let's get that insurance plan on our executives and we'll move our 401(k) to you as well."

Great, a no-brainer.  The kind of transaction he does dozens of times a year, but wait -- before his move, he had a staff to actually execute all of this once the client said “yes.”  They had been trained to be meticulous about setting up a case and seeing it through.

Instead of a staff, he now had a big pile of paper on his desk and was not sure where to begin.  Not that he doesn't know how to proceed; he's done this business for years, but he has to think about it, and he had to remember.  And when it comes to doing, it's valuable not to be thinking at the same time.  (More about that in another post.)

Have you ever had the experience of doing something again for the very first time? It seems silly doesn't it?  But every time you do something you've done before, and you have to think about it, that's exactly what you are doing.  Engage your brain to create, not to recall, whenever you can.

As he built his business, he carefully developed processes, created lists that address each type of activity, and systematically trained staff to carry them out.  The product was a successful business with consistently high quality service.  Of course, those processes and lists are still in a box someplace.

He dug into the paperwork.  As he went, he drew on his experience to recall the requirements of these types of accounts, these product companies.  Okay, these forms are complete -- oh, and I need one of these.  Then we need to do this and this, and, oh! I forgot this.  Two hours of work took all day.  Without simple, written instructions, he essentially had to design a new process as he went, even though he had done the same thing hundreds of times in the past.  He will be unpacking that box very soon.

Do you perform any routine processes by memory?   That’s fine for the simplest ones that never change – brushing your teeth, recording your voice mail message, scheduling an appointment.  But as the number of steps and the number of options increases, the more likely a missed detail can derail a smooth outcome the first time, the more you can benefit from written prompts and reminders.  No one I know uses a checklist before starting a car.  Every pilot runs through one before starting a plane.

Of course, midway through his process, his wife, who's business he had just set up with carefully designed processes and instructions, walked in.

“What are you doing?”

“Making sure I have everything I need to process this case.”

“You should have a checklist!”

“Thanks, dear.”

An unloved, low tech tool

Imagine, me of all people, making like a Luddite!

Never have financial advisors had so much computing power and so much communication technology on our desks or in our pocket, and I love it all.  I won't bore you with my issues with shiny objects.  SQUIRREL!

So, why have I become so fascinated by the potential of checklists?  Because the key to improving your practice is not more expertise. Yes, it is good to expand your professional capabilities, and yes, most advisors have less skill at running a business than in managing investments or doing planning, so more practice management training has value.  But, the key is that we don't use our brains that well, and technology and skill are not the solutions.

Our mind is a glorious and elegant device. With it we can compose music, contemplate black holes, envision other times and other worlds, and imagine the possibilities! Remember the milk?  Not so much. Oh, we can, if we force it to, but it is not what the brain is designed for its competence. Yet, we insist on using it that way, and when we operate an environment as complex as financial advice, that means trouble.

Why do we follow up with clients a little later than we would like, choose that investment we later regret, leave the stock option value out of the retirement plan?  Because we forget. Because we pressed our minds into performing a job for which a piece of paper is vastly more competent.

Enter the checklist.  The cheapest, simplest little device to support your brain as it fulfills its higher purpose.  The brain is the executive, and the checklist is the administrative assistant.  You don’t want the executive filing things.  That would be an inefficient investment of her higher salary.  And executives would probably mess up the filing anyway – just ask my assistant!  Beyond costing less, the assistant will do it better.

And that’s what this tool can do for us as well.  How to design them effectively and implement them in your practice is what we will explore here.