Why are many advisers still mailing quarterly reports?
With the rise of purpose-built choices for advisers from a thriving technology community that has grown with them and their success, it is baffling to see a lack of adoption of some of the more “no brainer” types of technologies.
Chief among them is the quarterly-reporting process. This manual, time-intensive and stodgy tradition of sending paper performance reports, market commentary and the like via snail mail every quarter has outlived its due date.
Fortunately, there is light at the end of this paper tunnel. When asked, leading advisers say the key to their success in building efficient businesses is to challenge their assumptions continually as to why and how certain things are done.
This process of self-examination can have a dramatic impact.
As an example, consider the recent experience of a successful independent advisory firm in Southern California that was growing consistently. As part of its history, the firm prided itself on its reporting and communication with clients as a key service it provided.
Inherent in that approach, however, was a vast, manual reporting system it had cobbled together through the years and which was quickly becoming an operational burden and nightmare to manage.
Because the company had continued to do business as usual and didn't pay attention to the new technologies available, it was beginning to fall behind in service, with communications and reports provided as its “standard” service model, taking over a month out of every quarter to complete.
Just before the company reached a breaking point, however, it started to challenge its way of providing reports in a paper fashion and invested in building a “composite application” to automate that process by integrating document management technology with its portfolio management system and customer relationship management software.
This integration allowed the firm to automatically publish its reports electronically to private, secure client websites, triggering e-mails to the clients informing them that their reports were ready to be viewed.
At first, the firm was concerned about the impact this change might have to its clients. “Change can never be good,” the nervous principals worried.
Fortunately, however, they moved ahead by wrapping this new reporting change in a “going green” message to their clients and were more than pleasantly surprised on a number of levels.
Because it could track the e-mail opening and report downloading, the firm realized that less than one in 10 of its clients actually viewed the reports. What it had thought would be a service decrease by going electronic delivery actually wasn't a decrease at all. In reality, it was a service increase, as the information was much timelier.
Most importantly, what the company realized was that it had completely misunderstood what its real value proposition was to its clients. It was clearly not in providing quarterly reports.
By challenging its assumptions and existing ways of doing business, the firm embraced the new technology, which saved it three weeks per quarter of staff time and tens of thousands of dollars in annual printing, collating and mailing costs. It also provided the firm with added capacity to grow without adding additional back-office staff.
Timothy D. Welsh is president and founder of Nexus Strategy LLC, a consulting firm to the wealth management industry, and can be reached at firstname.lastname@example.org or on Twitter @NexusStrategy.