Like the old proverb about shoemakers' children going barefoot, many financial planners spend their professional lives organizing the affairs of others though their own businesses are in disarray.
Deborah Fox is on a mission to straighten things out.
Over the years at her San Diego-based
financial planning firm, Fox College Funding, which specializes in identifying strategies to minimize the out-of-pocket costs of college, she has developed systematized and documented procedures for doing almost every task that a
financial planning firm must do, regardless of its particular specialty: opening accounts, scheduling planning sessions, performing reviews.
Assuming that other advisers who don't share her zeal for administrative order might want to take advantage of it, Ms. Fox codified that body of knowledge into a combination of more than 100 documents detailing work flow systems and procedures, an online library of resource materials, and online and live training sessions.
“Planners can still do things their way, but the system saves them hundreds and hundreds of hours of work, and lets them fully systematize their business in six months,” said Ms. Fox, who created the Fox Financial Planning Network to provide advisers with the program. “We enable them to systematize not only office operations but also client services.”
Now a year old, the network has almost 100 member advisory firms, most of which focus on
financial planning. The roster includes a range of firms, including small, large and hybrid, and registered investment advisers.
With her offering, Ms. Fox joins a cottage industry of adviser coaches, most of whom focus on marketing and business development. A smaller group, including Peak Advisor Alliance and Quantivus Consulting Inc., offers help in practice management.
But what makes Ms. Fox's business unique is that it offers detailed, step-by-step guides for virtually every action that a financial planner must take (think McDonald's Hamburger University, which provides operations training for its restaurant owners and staff).
That level of detail is part of what attracted the American Institute of CPAs to the Fox program. This week, at its Advanced Personal Financial Planning Conference in Las Vegas, the AICPA is scheduled to announce its collaboration with Ms. Fox.
The move effectively endorses the system for use by the 7,500 members of the group's Personal Financial Planning Division, which serves more than 5,000 certified public accountants who hold the personal financial specialist designation, as well as non-accountant advisers who want access to the group's educational offerings.
“Deborah has taken her program and customized it for CPAs,” said Andrea Millar, senior technical manager of the AICPA's PFP division.
“Since a lot of clients are asking CPAs for insurance, investment, retirement and estate-planning advice, we want to give our members the help they need to get those services up and running effectively.”
The evidence is overwhelming that running a financial advice business by the book pays off.
“Our research confirms that firms that invest the time and necessary resources into documenting work flows and standardizing procedures are more profitable and have higher value,” said Kelli Cruz, director of custom research at
InvestmentNews, who oversees the publication's biennual studies on financial performance, and compensation and staffing.
Terry Bell, who also believes strongly in having standardized and documented procedures, said that adviser psychology is what is preventing the widespread adoption of these procedures.
“The problem is that advisers are loners; they'll agree that a documented process is needed, but it has to be theirs,” said Mr. Bell, whose Australia-based Business Health helps product companies, broker-dealers and advisers throughout the English-speaking world increase efficiency.
"SYSTEMS CUT COSTS'
Although he hasn't met Ms. Fox or seen her program, Mr. Bell thinks that advisers would be wise to take almost any step to systematize their business, even though he is skeptical that they will do so unless required by regulation or by broker-dealer mandate.
“Systems cut costs because they help advisers retain and attract staff since everyone knows what to do, and they increase the value of the business because buyers will pay more when demonstrable systems are in place than when all they have to go on is the owner's anecdotes,” he said.
But few advisory practices have anywhere near that level of efficiency.
Fully 29% have no documented review process and 28% update client information only when they get around to it, Mr. Bell said.
Christopher Lund of the Lund Financial Group in Plainville, Mass., had some systems in place before he joined the Fox Financial Network last year, but decided he could use more.
“What I like about the program is that I didn't have to reinvent the wheel,” said Mr. Lund, who was referred to
InvestmentNews by Ms. Fox.
“It saves so much time and I'm freed up from worrying about the details of offering planning services,” Mr. Lund said. “My assistant and I have all the support behind us to deliver and present what we need.”
Mr. Lund said that the service is well worth the cost, which Ms. Fox prices at $4,995 without personal coaching and $6,595 with coaching. There is a continuing $59.95 monthly charge for each service.
The version for AICPA members is discounted, Ms. Millar said.
Another user of the Fox system, Thom K. Hall, whose eponymous firm is based in Salt Lake City, said that he is also a member of the Peak Advisor Alliance and still uses some of its program, but finds the granularity of the Fox system very helpful.
“I've been a certified financial planner for 20 years, but this provides a focus and a structure I haven't seen elsewhere. I wish I had it 10 years ago,” said Mr. Hall, who was also referred to
InvestmentNews by Ms. Fox.
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