Double Stock Index Performance By Avoiding The Losers

Monday, January 14th, 2013

by Bob Simp­son, Syn­chronic­ity Per­for­mance Consultants

Another year has come and gone and the reports are in for 2012. It was another prof­itable year for investors. 2012 rep­re­sents the fourth pos­i­tive year in a row fol­low­ing a dis­as­trous 2008.

Many peo­ple sim­ply look at the indices as their prin­ci­ple way of judg­ing performance.

So let’s start by look­ing at how a vari­ety of indices per­formed in 2012:

One prob­lem with look­ing at the indices is that within each index, there are stocks that per­form and those that underperform.

Let me take a prac­tice man­age­ment approach and exam­ine the per­for­mance of a com­bi­na­tion of the S&P 100 and TSX (Toronto Stock Exchange) 60 dur­ing 2012. Most of you have seg­mented your clients and when you first did this analy­sis, you found that roughly 20% of your clients held 80% of your assets. The same applies to per­for­mance of stocks within an index.

The table below is a sim­ple analy­sis of a com­bi­na­tion of the S&P 100 and TSX 60, where I sorted by return for 2012 and broke the list into four categories:

• Super Per­form­ers – top 25% of 2012 returns
• Per­form­ers – next 25% of 2012 returns
• Mar­ginal Per­form­ers – next 25% of 2012 returns
• Poor Per­form­ers – bot­tom 25% of 2012 returns

This table high­lights a prob­lem with index­ing. The top three cat­e­gories pro­duced an aver­age return of 24.37%, which is bet­ter than dou­ble the S&P 100 and almost four times the per­for­mance of the TSX. The bot­tom 25%, the Poor Per­form­ers, aver­aged a loss of almost 13%.

So based on this analy­sis, I could make a case that invest­ment man­age­ment should be a process of try­ing to avoid the losers and by doing so, putting the odds in your favor, as there are three win­ners for every loser.

If we exam­ine the names in the bot­tom quarter,

and sim­ply elim­i­nated the sec­tors with the most names (Energy, Met­als & Min­ing), we elim­i­nate 36 names from our list (includ­ing all stocks in every per­for­mance cat­e­gory) and improve per­for­mance to 20.20%. Note: we only lost three names from the Super Per­form­ers Group (Nexen, Agnico Eagle and Williams Com­pa­nies) and one from the Per­form­ers Group (Sil­ver Wheaton). Let’s con­sider those to be out­liers, just as the cat­e­gories for Poor Per­for­mance with sin­gle names are out­liers too.

So the ques­tion becomes “How can you iden­tify which quad­rants to avoid?”

If we look at a rel­a­tive return rank­ing of the 31 stock sec­tors in SIACharts​.com, here is how Energy (E) and Met­als and Min­ing (M&M) ranked on the first day of each month in 2012:

If you fol­low SIAChart’s rules, you want to:

• Buy stocks (or sec­tors) in the favored zone (top 25% rankings)
• Mon­i­tor stocks in the neu­tral zone (sec­ond 25% rankings)
• Avoid stocks in the unfavoured zone (bot­tom 50% of rankings)

So instead of buy­ing Met­als and Min­ing in 2012, you would have focused your buy­ing on sec­tors in the favored zone One thing that I like about this approach is that the sec­tors are rel­a­tively sta­ble. The table below is a list of sec­tors in the favoured zone at the begin­ning of 2012 and 2013:

Stock sec­tors tend to be rel­a­tively sta­ble as you can see by the table above. The only major change in the favored zone over the past year is that Tobacco and Util­i­ties dropped out and were replaced by Drugs (up 29.96%) and Con­glom­er­ates (up 43.02%). There were three other sec­tors that vis­ited the favored zone briefly. Con­sumer Non-Durables has held the num­ber one spot since May 2009 over which it has pro­duced a com­pound annual growth rate of greater than 30% over that period.

The key to suc­cess with this strat­egy is to focus on stocks, mutual funds or ETFs in sec­tors in the favored zone. You might choose secu­ri­ties from your firm’s rec­om­mended list or a fun­da­men­tal ser­vice to which you sub­scribe. It is gen­er­ally a good idea to work with names that your clients rec­og­nize and feel com­fort­able owning.

Once you have iden­ti­fied your fun­da­men­tal picks (stocks, mutual funds and ETFs) in the favored zone for the stock sec­tors, you can build a port­fo­lio, in the SIACharts pro­gram, that includes all these secu­ri­ties and do a rel­a­tive strength analy­sis to deter­mine the per­form­ers vs. the non-performers within each group. By own­ing the strongest secu­ri­ties within the strongest sec­tors and avoid­ing the under­per­form­ing sec­tors, you can improve your prob­a­bil­i­ties of suc­cess and invest­ment performance.

The good news is that this can be accom­plished with min­i­mal daily super­vi­sion and you can pro­duce com­pre­hen­sive pro­fes­sional reports for your client meet­ings. This allows you to spend the major­ity of your time in client-facing activ­i­ties so you can pro­duce high lev­els of client sat­is­fac­tion and have time to find new, prof­itable clients to grow your business.

Bob Simp­son is Pres­i­dent of Syn­chronic­ity Per­for­mance Con­sul­tants, a firm that has been pro­vid­ing con­sult­ing ser­vices to finan­cial advi­sors for the past 15 years, focus­ing on the Core Sta­bi­liz­ers of suc­cess­ful advi­sor prac­tices (Client Rela­tion­ship Man­age­ment, Invest­ment Man­age­ment and Busi­ness Devel­op­ment). He is an inde­pen­dent con­trac­tor (dis­tri­b­u­tion, advice and con­sult­ing) for SIACharts, a Canadian-based firm that pro­vides industry-leading tech­ni­cal analy­sis research tools exclu­sively to finan­cial advisors.

For more infor­ma­tion about SIACharts, please con­tact Bob at 905−502−0100 or bob.simpson@synchronicity.ca. Con­tact Bob to arrange a free one-hour dis­cus­sion with Bob and a mem­ber of the SIACharts team and a free 14-day trial.

Dis­claimer

Bob Simp­son, Syn­chronic­ity Per­for­mance Advi­sors, Syn­chronic­ity Busi­ness Coach­ing Inc., and SIACharts​.com specif­i­cally rep­re­sents that it does not give invest­ment advice or advo­cate the pur­chase or sale of any secu­rity or invest­ment. None of the infor­ma­tion con­tained in this web­site or doc­u­ment con­sti­tutes an offer to sell or the solic­i­ta­tion of an offer to buy any secu­rity or other invest­ment or an offer to pro­vide invest­ment ser­vices of any kind. Bob Simp­son, Syn­chronic­ity Per­for­mance Advi­sors, Syn­chronic­ity Busi­ness Coach­ing Inc. SIACharts​.com (Fund­Charts Inc.) nor its third party con­tent providers shall be liable for any errors, inac­cu­ra­cies or delays in con­tent, or for any actions taken in reliance thereon. Back tested per­for­mance is hypo­thet­i­cal (it does not reflect trad­ing in actual accounts) and is pro­vided for infor­ma­tional pur­poses to indi­cate his­tor­i­cal per­for­mance had SIA Report portfolio(s) been avail­able over the rel­e­vant period. Past per­for­mance does not guar­an­tee future results. Invest­ment returns and prin­ci­pal value will fluc­tu­ate, so that investors’ shares, when sold, may be worth more or less than their orig­i­nal cost. Invest­ing in any invest­ment process, does not guar­an­tee that an investor will make money, avoid los­ing cap­i­tal, or indi­cate that the invest­ment is risk-free. There are no absolute guar­an­tees in invest­ing so when review­ing any back tested per­for­mance infor­ma­tion on the Syn​chronic​ity​.com or SIACharts​.com web­site, email con­tent, or other mate­ri­als, ensure that you do not use to make invest­ment decisions.

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Tags: Amp, Bob Simpson, Index Performance, Index Stocks, Investment Management, Loser, Losers, Management Approach, Metals, Performance Category, Performance Consultants, Poor Performers, Practice Management, Sectors, Stock Index, Synchronicity, Toronto Stock Exchange, Tsx, Tsx 60, Tsx Toronto Stock Exchange
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Four Steps to Deepen Client Relationships and Increase Referrals

Wednesday, October 24th, 2012

by Dan Richards, Cli​entIn​sights​.ca

Research shows that only 25% of clients are truly “engaged” as opposed to merely sat­is­fied – and those engaged clients are not only the most loyal and sat­is­fied but also pro­vide almost all referrals.

Today’s arti­cle by Julie Lit­tlechild of Advi­sor Impact lays out an Engage­ment Roadmap, out­lin­ing the spe­cific steps to turn client sat­is­fac­tion into engage­ment. It focuses on four spe­cific steps that are highly cor­re­lated with engaged clients:

1.     Seek struc­tured feedback

2.     Ensure you have the right client fit

3.     Cre­ate deeper connections

4.     Take the lead in help­ing clients man­age their finan­cial lives

Click to read the full article:

http://​www​.advi​sorone​.com/​2​0​1​2​/​0​9​/​2​5​/​4​-​w​a​y​s​-​f​o​r​-​a​d​v​i​s​o​r​s​-​t​o​-​b​e​t​t​e​r​-​e​n​g​a​g​e​-​c​l​i​e​n​t​s​?​u​t​m​_​s​o​u​r​c​e​=​t​o​p​s​t​o​r​i​e​s​1​0​0​7​1​2​&​a​m​p​;​u​t​m​_​m​e​d​i​u​m​=​e​n​e​w​s​l​e​t​t​e​r​&​a​m​p​;​u​t​m​_​c​a​m​p​a​i​g​n​=​t​o​p​s​t​o​r​ies

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Tags: Amp, Client Relationships, Client Satisfaction, Compendium, Fit, Four Steps, Julie Littlechild, Referrals, Take The Lead, Target, Utm
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Technology Won’t Organize Us, it Creates a Greater Need to be Organized

Wednesday, April 25th, 2012

Tech­nol­ogy was sup­posed to make our lives sim­pler, and it has – pro­vided you have dis­ci­pline and real­is­tic expectations.

One thing it will not do is orga­nize our lives for us.

The inspi­ra­tion for this post was an arti­cle on the Clien­t­wise blog refer­ring to an arti­cle in the New York Times recently by pro­duc­tiv­ity guru David Allen. I am a huge fan of Allen’s, and over the last few years I have worked hard to incor­po­rate his prin­ci­ples into my daily routine.David Allen, founder & CEO of The David Allen Company

A com­mon com­plaint I hear relates to infor­ma­tion over­load. There is just too much we have to process every day. Tech­nol­ogy can put infor­ma­tion over­load on steroids. But it is not the infor­ma­tion, it is how we han­dle it. As David Allen is fond of say­ing, if the sheer quan­tity of infor­ma­tion were the prob­lem then every time we walked into the library our heads would explode.

Tech­nol­ogy is not the cause of our strug­gle to get the right things done but used poorly it can make the prob­lem a lot worse. Allen’s prin­ci­ples can help us do more than get orga­nized (hugely valu­able in itself), but can help us tame the tech­no­log­i­cal beast and put it in our ser­vice. He sug­gests a series of five steps to opti­mize your focus and resources:

• Cap­ture every­thing that has your atten­tion, at work and at home, and writ­ing. The first time you do this may take as much as six hours to “empty your head.” A big project to be sure but a nec­es­sary one if the rest of the sys­tem is going to work.
• Clar­ify what each pri­or­ity means to you. Decide what results you want, and what actions are required.
• Keep an inven­tory of all your projects some­place where you will see them often, and orga­nize reminders for the to-do lists you create.
• Reg­u­larly review your inven­tory of com­mit­ments and projects.
• Deploy your atten­tion and resources appropriately.

As I grad­u­ally learn how to uti­lize tech­nol­ogy to apply Allen’s prin­ci­ples, I find myself more con­sis­tently com­plet­ing the impor­tant tasks I have com­mit­ted to. I find that the more dili­gent I am about hav­ing dis­ci­pline in fol­low­ing his ideas, the more pro­duc­tive I am and the more tech­nol­ogy helps me accom­plish things rather than bury­ing me deeper in a tidal wave of tasks and infor­ma­tion. If you strug­gle with over­load of any kind, I strongly encour­age you to take a look at some of the arti­cles on Allen’s web­site or to get his book Get­ting Things Done. His ideas have been a career changer for me.

Update:

Since post­ing this arti­cle I had a con­ver­sa­tion with Mark Schoen­beck. It turns out he believes strongly in tar­get mar­ket­ing for finan­cial advi­sors and how that can help in attract­ing refer­rals. Mark fell vic­tim to the risk all of us face in the pub­lic realm: you may talk with a reporter for 20 min., and what gets pub­lished might be a sin­gle sen­tence that doesn’t nec­es­sar­ily relate to your point.

My point above holds true. If you fail to iden­tify your­self with a value propo­si­tion that goes beyond port­fo­lio returns, you run the risk that your client will assume that pos­i­tive returns are your value propo­si­tion. Mark, and Curian, believe that.  The results of their sur­vey update for this year dri­ves home how impor­tant that is.

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Tags: Amp, Beast, Ceo, Commitments, Discipline, Five Steps, Guru, Information Overload, Inspiration, New York Times, Priority, Process Technology, Productivity, Realistic Expectations, Reminders, Sheer Quantity, Six Hours, Steroids, Struggle, Technology Information
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How to Ensure Top Clients Look Forward to Your Meetings

Wednesday, February 1st, 2012

Given that time is our scarcest cur­rency, we all need to be cau­tious about tak­ing on sig­nif­i­cant new com­mit­ments. The only excep­tion is cases where there’s absolutely clear cut evi­dence of a sub­stan­tial return.

Late last year, I spoke to an advi­sor about a 30 minute invest­ment in for­mu­lat­ing action plans for top clients that has seen an over­whelm­ingly pos­i­tive response from clients; and has led to sig­nif­i­cant progress in his busi­ness as a result.

The con­cept of these plans is sim­ple: If you’re an account man­ager work­ing for Proc­ter & Gam­ble with respon­si­bil­ity for man­ag­ing the Wal­mart or Costco account, every year you’ll spend 30 days devel­op­ing a com­pre­hen­sive 200 page busi­ness plan for that account.

It clearly doesn’t make sense to spend a month devel­op­ing a 200 page busi­ness plan for even your largest client; but how about 30 min­utes to develop a four page plan? This advi­sor had attended a work­shop in 2009 in which he’d seen the tem­plate for a short plan for use with key clients; sum­ma­riz­ing the client back­ground, iden­ti­fy­ing oppor­tu­ni­ties and set­ting out spe­cific actions.

In early 2010, this advi­sor and his team devel­oped these plans for their top 20 clients. They took about half an hour each ini­tially with a fur­ther 15 to 20 min­utes to update them a year later.

At the start of each quar­ter, this advi­sor sits down with his team and reviews the plan for each client, iden­ti­fy­ing things that have to hap­pen in the next 90 days. As a result, his activ­ity with top clients is more proac­tive and focused; and both he and his clients are bet­ter off as a result. One out­come is that clients gen­er­ally see more con­crete results from meet­ings and as a con­se­quence are more enthu­si­as­tic about future meet­ings. In this advisor’s view, the time he and team spend com­pil­ing, review­ing and act­ing on these plans is his high­est return activity.

Key back­ground

The first step is to con­cisely sum­ma­rize key back­ground on each key client. Here’s what the back­ground por­tion of the plan tem­plate might look like doc­u­ment­ing client infor­ma­tion in thir­teen areas. Con­sider using this as a start­ing point for your own key client plans mod­i­fy­ing it to your own situation.

1. Cur­rent sit­u­a­tion: A short sum­mary of key trends on assets and revenues:

For 2009, 2010 and 2011 show rev­enue for each year as well as assets at the end of the year.

In addi­tion, doc­u­ment how long you’ve been work­ing with this client and how you came to work together.

2. Finan­cial priorities:

Sum­ma­rize this client’s top three finan­cial issues and priorities.

3. Assess­ment of client sat­is­fac­tion: How sat­is­fied is your client on the key dimen­sions of your relationship:

On a scale from one to five (where one is low, five is high), write down your assess­ment of how sat­is­fied your client is on key dimen­sions of key dimensions:

· Per­for­mance of investments

· Con­fi­dence that is on track to achieve goals

· Fre­quency of communication

· Qual­ity of com­mu­ni­ca­tion: Feels lis­tened to, key ques­tions and issues are addressed

· Over­all relationship

4. Plans in place: An overview of the writ­ten plans this client has in place:

List the kinds of writ­ten plans this client has in place, whether they have been com­pleted in whole or in part, when they were pre­pared, when they were last updated and who pre­pared them.

Among the plans to include are:

· finan­cial plan

· invest­ment plan

· retire­ment plan

· estate /insurance plan

· tax plan

· cash flow plan

5. Key gaps:

Iden­tify impor­tant gaps in this client’s plans and finan­cial affairs.

6. Pre­ferred con­tact: How does this client want to hear from you, and how often:

Doc­u­ment the client’s pref­er­ence in terms of con­tact via:

· Face to face

· Tele­phone

· Email

· Mail

· Lunch Presentations

· Evening Presentations

· Other

As well, iden­tify the fre­quency with which you used each of these meth­ods to com­mu­ni­cate with this client in 2011; and your goal for each of these in 2012.

7. Your knowl­edge of the client:

This sec­tion iden­ti­fies gaps in your knowl­edge of the client. Rate your knowl­edge from high to low in terms of their finan­cial sit­u­a­tion (hope­fully high), work sit­u­a­tion, fam­ily sit­u­a­tion, hob­bies and inter­ests, retire­ment plans and any health and per­sonal issues.

Then iden­tify knowl­edge gaps that you need to fill in the next twelve months.

8. Pro­fes­sional advisors:

List the names and con­tact infor­ma­tion for this client’s accoun­tant, lawyer and other pro­fes­sional advi­sors. On a scale from one to five note whether you’ve met those pro­fes­sional advi­sors and the strength of your rela­tion­ship with them.

9. % of Assets held:

Approx­i­mately what per­cent­age of this client’s assets do you hold? Where are out­side assets held, what do they con­sist of and what is their approx­i­mate value?

What’s your his­tory in terms of bring­ing on addi­tional assets from this client? When was the last time that you talked to this client about this? Where clients hold assets with out­side firms, have you offered to pre­pare a con­sol­i­dated quar­terly snap­shot of all of their assets?

10. Rela­tion­ship with heirs: Where you stand in terms of your con­nec­tion with your client’s spouse and fam­ily members:

List the name of each per­son who will receive a sub­stan­tial inher­i­tance from this client start­ing with the spouse and includ­ing adult chil­dren. In each case iden­tify whether you have their account cur­rently and rank your rela­tion­ship with them from one to five; where one is low and five is high. Include any com­ments on your rela­tion­ship with each of your key client’s heirs.

11. Past refer­rals provided:

Record the cases where this client intro­duced you to friends and fam­ily includ­ing the date, the assets involved by the poten­tial client referred and, the outcome.

12. Close asso­ciates:

List this client’s clos­est fam­ily mem­bers, friends and work col­leagues. For each case, indi­cate whether at some point you’ve met them.

13. Past social activity:

Here’s where you sum­ma­rize cases in the past where you got together with this client socially. List the event or activ­ity, the date and any response or feed­back from the client. Based on that feed­back, should you repeat this in future?

Cap­i­tal­iz­ing on opportunities:

Once you have the back­ground doc­u­mented, next is a five step process to iden­tify oppor­tu­ni­ties and for­mu­late a plan to cap­i­tal­ize on those oppor­tu­ni­ties. This dri­ves the agenda for client meet­ings and shapes the con­ver­sa­tions that take place.

1. Hot but­tons:

What are the one, two or three issues that this client wor­ries about the most; and that will moti­vate him or her to act? Oppor­tu­nity Check­list: A quick sum­mary of gaps in this client’s finan­cial affairs.

2. Oppor­tu­nity checklist:

Here’s where you iden­tify any things that need to be done to ensure the client’s basic affairs are in good order. Here’s a list that you could use as a start­ing point. For each of these indi­cate if there is work to be done on them in 2012, whether for the client or for fam­ily members.

Cash Man­age­ment Account:

· GICs

· RESP

· RDSP

· RRSP

· Tax Free Sav­ings Account

· Crit­i­cal care insurance

· Life insurance

· Long term care insurance

· Power of attorney

· Will

3. Key client oppor­tu­ni­ties for 2012:

Write down the one, two or three key ways you can help improve the client’s sit­u­a­tion in the next twelve months.

4. Key busi­ness oppor­tu­nity for 2012:

Iden­tify the one goal with this client that would advance your own busi­ness in the next twelve months.

5. Key steps for 2012:

What spe­cific steps are you going to take in 2012 to achieve these goals?

The last four years have tested many client rela­tion­ships; a process that is ongo­ing. Look­ing for­ward, it will be crit­i­cally impor­tant to be proac­tive and dis­ci­plined in man­ag­ing rela­tion­ships with your most impor­tant clients. A Client Oppor­tu­nity Tem­plate such as the one this advi­sor uses can play a key role in mak­ing that happen.

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Tags: 15 Minutes, 30 Minutes, Amp, Client Background, Commitments, Concrete Results, Consequence, Costco, Currency, Half An Hour, Led, Minute Investment, Page Business Plan, Proactive, Procter Amp Gamble, Substantial Return, Walmart
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30 Minutes to Secure Your Most Important Clients

Wednesday, January 25th, 2012

30 min­utes to secure your most impor­tant clients

Given that time is our scarcest cur­rency, we all need to be cau­tious about tak­ing on sig­nif­i­cant new com­mit­ments. The only excep­tion is cases where there’s absolutely clear cut evi­dence of a sub­stan­tial return.

Late last year, I spoke to an advi­sor about a 30 minute invest­ment in for­mu­lat­ing Client Oppor­tu­nity Plans for top clients that has pro­vided an over­whelm­ingly pos­i­tive result.

The con­cept of these plans is sim­ple: If you’re an account man­ager work­ing for Proc­ter & Gam­ble with respon­si­bil­ity for man­ag­ing the Wal­mart or Costco account, every year you’ll spend 30 days devel­op­ing a com­pre­hen­sive, 200 page busi­ness plan for that account.

It clearly doesn’t make sense to spend a month devel­op­ing a 200 page busi­ness plan for even your largest client – but how about 30 min­utes to develop a four page plan? This advi­sor had attended a work­shop in 2009, in which he’d seen the tem­plate for a four page plan for use with key clients, sum­ma­riz­ing the client back­ground, iden­ti­fy­ing oppor­tu­ni­ties and set­ting out spe­cific actions.

In early 2010, this advi­sor and his team devel­oped these plans for their top 20 clients – they took about half an hour each ini­tially, with a fur­ther 15 to 20 min­utes to update them a year later. As a result of these plans, his activ­ity with top clients is more proac­tive and focused and both he and his clients are bet­ter off as a result. In this advisor’s view, the time he spends in putting together these plans is his high­est return activ­ity each year.

Key back­ground

The first step is to con­cisely sum­ma­rize key back­ground on each key client. Here’s what the back­ground por­tion of the plan tem­plate might look like, doc­u­ment­ing client infor­ma­tion in thir­teen areas. Con­sider using this as a start­ing point for your own key client plans, mod­i­fy­ing it to your own situation.

1. Cur­rent sit­u­a­tion – a short sum­mary of key trends on assets and revenues:

For 2009, 2010 and 2011, show rev­enue for each year as well as assets at the end of the year.

In addi­tion, doc­u­ment how long you’ve been work­ing with this client – and how you came to work together.

2. Finan­cial priorities

Sum­ma­rize this client’s top three finan­cial issues and priorities.

3. Assess­ment of client sat­is­fac­tion – how sat­is­fied is your client on the key dimen­sions of your relationship

On a scale from 1 to 5 (where 1 is low, 5 is high), write down your assess­ment of how sat­is­fied your client is on key dimen­sions of key dimensions:

1. Per­for­mance of investments
2. Con­fi­dent that is on track to achieve goals
3. Fre­quency of communication
4. Qual­ity of com­mu­ni­ca­tion – feels lis­tened to, key ques­tions and issues are addressed
5. Over­all relationship

4. Plans in place – an overview of the writ­ten plans this client has in place

List the kinds of writ­ten plans this client has in place, whether they have been com­pleted in whole or in part, when they were pre­pared, when they were last updated and who pre­pared them.

Among the plans to include are

• finan­cial plan
• invest­ment plan retire­ment plan
• estate /insurance plan
• tax plan
• cash flow plan.

5. Key gaps

Iden­tify impor­tant gaps in this client’s plans and finan­cial affairs.

6. Pre­ferred con­tact – how does this client want to hear from you — and how often

Doc­u­ment the client’s pref­er­ence in terms of con­tact via:

• Face to face
• Tele­phone
• Email
• Mail
• Lunch pre­sen­ta­tions
• Evening pre­sen­ta­tions
• Other

As well, iden­tify the fre­quency with which you used each of these meth­ods to com­mu­ni­cate with this client in 2011 – and your goal for each of these in 2012.

7. Your knowl­edge of the client

This sec­tion iden­ti­fies gaps in your knowl­edge of the client. Rate your knowl­edge from high to low in terms of their finan­cial sit­u­a­tion (hope­fully high), work sit­u­a­tion, fam­ily sit­u­a­tion, hob­bies and inter­ests, retire­ment plans and any health and per­sonal issues.

Then iden­tify knowl­edge gaps that you need to fill in the next twelve months.

8. Pro­fes­sional advisors

List the name and con­tact infor­ma­tion for this client’s accoun­tant, lawyer and other pro­fes­sional advi­sors. On a scale from 1 to 5, note whether you’ve met those pro­fes­sional advi­sors and the strength of your rela­tion­ship with them.

9. % of Assets held

Approx­i­mately what per­cent­age of this client’s assets do you hold? Where are out­side assets held, what do they con­sist of and what is there approx­i­mate value?

What’s your his­tory in terms of bring­ing on addi­tional assets from this client? When was the last time that you talked to this client about this? Where clients hold assets with out­side firms, have you offered to pre­pare a con­sol­i­dated quar­terly snap­shot of all of their assets?

10. Rela­tion­ship with heirs – where you stand in terms of your con­nec­tion with your client’s spouse and fam­ily members.

List the name of each per­son who will receive a sub­stan­tial inher­i­tance from this client, start­ing with the spouse and includ­ing adult chil­dren. In each case iden­tify whether you have their account cur­rently and rank your rela­tion­ship with them from 1 to 5, where 1 is low and 5 is high. Include any com­ments on your rela­tion­ship with each of your key client’s heirs.

11. Past refer­rals provided

Record cases where this client intro­duced you to friends and fam­ily, includ­ing the date, the assets involved by the poten­tial client referred and the outcome.

12. Close asso­ciates

List this client’s clos­est fam­ily mem­bers, friends and work col­leagues. For each case, indi­cate whether at some point you’ve met them.

13. Past social activity

Here’s where you sum­ma­rize cases in the past where you got together with this client socially. List the event or activ­ity, the date and any response or feed­back from the client. Based on that feed­back, should you repeat this in future?

Cap­i­tal­iz­ing on opportunities

Once you have the back­ground doc­u­mented, next is a five step process to iden­tify oppor­tu­ni­ties and for­mu­late a plan to cap­i­tal­ize on those opportunities.

1. Hot but­tons

What are the one, two or three issues that this client wor­ries about the most – and that will moti­vate him or her to act. Oppor­tu­nity Check­list – a quick sum­mary of gaps in this client’s finan­cial affairs.

2. Oppor­tu­nity checklist

Here’s where you iden­tify any things that need to be done to ensure the client’s basic affairs are in good order. Here’s a list that you could use as a start­ing point – for each of these, indi­cate whether there is work to be done on them in 2012, whether for the client or for fam­ily members.

• Cash Man­age­ment Account
• GICs
• RESP
• RDSP
• RRSP
• Tax free sav­ings account
• Crit­i­cal care insurance
• Life insur­ance
• Long term care insurance
• Power of attorney
• Will

3. Key client oppor­tu­ni­ties for 2012

Write down the one, two or three key ways this client you can help improve the client’s sit­u­a­tion in the next twelve months.

4. Key busi­ness oppor­tu­nity for 2012

Iden­tify the one goal with this client that would advance your own busi­ness in the next twelve months

5. Key steps for 2012

What spe­cific steps are you going to take in 2012 to achieve these goals?

The last four years have tested many client rela­tion­ships. Going for­ward, it will be crit­i­cally impor­tant to be proac­tive and dis­ci­plined in man­ag­ing rela­tion­ships with your most impor­tant clients – a Client Oppor­tu­nity Tem­plate such as this one can play a key role in mak­ing that happen.

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Tags: 15 Minutes, 30 Minutes, Amp, Assets, Client Background, Client Opportunity, Commitments, Costco, Currency, Current Situation, Half An Hour, Minute Investment, Page Business Plan, Plan Template, Proactive, Procter Amp Gamble, Substantial Return, Walmart
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The Common Denominator of Success

Wednesday, September 21st, 2011

By Norm Trainor, The Covenant Group

Over the last 30+ years, I have had the priv­i­lege of edu­cat­ing and coach­ing thou­sands of finan­cial advi­sors and entre­pre­neurs. The high­est per­form­ing advi­sors and entre­pre­neurs have only one com­mon denom­i­na­tor of suc­cess that I have been able to iden­tify: they all see the great­ness in oth­ers. When their clients look into their eyes, they see their own great­ness reflected back.

It reminds me of the story of Nar­cis­sus. For those of us who grew up with the clas­sics, we know that Nar­cis­sus was a young man who fell in love with his own image. Each day, he would go to a pool of water and gaze at his image. One day, he became so entranced with his own image that he leaned too far and fell into the water. Unable to swim, he drowned.

After his death, the water in the pool turned saline. The gods who drank from the pool were per­plexed. They said to the pool, “Your water was so pure and now we can­not drink it. What hap­pened?“

The pool responded: “When that young man gazed at me, I saw my own beauty reflected in his eyes. I have been mourn­ing the death of Nar­cis­sus and my tears have made my water salty.” The pool did not inter­pret the gaze of Nar­cis­sus as love of self, but as admi­ra­tion of its own beauty.

The best finan­cial advi­sors and entre­pre­neurs love the peo­ple they serve. Those clients see their own great­ness reflected in the eyes of the advi­sor. They become bet­ter and richer through their inter­ac­tion with the advi­sor, and the advi­sor becomes bet­ter and richer as well. There is a sim­ple truth: You have to love some­one before you can change them. Top advi­sors love their clients. As a result, they are “Change Agents” who are able to facil­i­tate the growth and devel­op­ment of the peo­ple they serve. The one com­mon denom­i­na­tor of high per­form­ing advi­sors and entre­pre­neurs is their abil­ity to see the great­ness in oth­ers and inspire their clients to real­ize their poten­tial.

Fol­low The Covenant Group at:

Norm Trainor is the Pres­i­dent & CEO of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit the web­site at www​.covenant​group​.com.

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Tags: Admiration, Amp, Beauty, Best Financial Advisors, Coaching, Common Denominator, Covenant Group, Gaze, Greatness, Growth And Development, Image, Interaction, Love, Norm Trainor, People, Pool, Pool Water, President Ceo, Privilege, Saline, Simple Truth, Story Of Narcissus, Success, Young Man
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Why a Simple Email is Today’s Best Prospecting Strategy

Wednesday, September 7th, 2011

In the Q & A after my talk on refer­rals at a recent con­fer­ence, an advi­sor asked about the best way to inter­act with clients today — and also how to get in front of prospects in the cur­rent environment.

Per­son­al­ized port­fo­lio reviews and one on one con­tact are essen­tial to let clients know how they’re doing and to assure them that their port­fo­lios are hold­ing up — that’s espe­cially true in tur­bu­lent mar­kets like we’ve seen of late.

The chal­lenge in times of stress is that given how many clients want to hear from you, try­ing to reach every­one in per­son can be imprac­ti­cal. And if we’re not care­ful, the focus on exist­ing clients means we miss the oppor­tu­nity to reach out to prospects.

It’s here where vehi­cles that allow you to effi­ciently reach mul­ti­ple clients at the same time can be effec­tive. Some advi­sors invite clients to evening town hall meet­ings, at which they dis­cuss mar­ket devel­op­ments. Oth­ers host con­fer­ence calls for clients, dur­ing which the advi­sor and an out­side money man­ager review where the mar­ket standas .

Town halls and con­fer­ence calls can be effec­tive sup­ple­ments to reg­u­lar con­tact, but dur­ing mar­ket tur­moil even these can fall short of the fre­quency of updates that some clients are seek­ing — and they also have lim­ited impact when it comes to prospects.

That’s the appeal of a strat­egy that one advi­sor employed in the 2008 to reach both exist­ing and prospec­tive clients — an approach he began using again in the past month.

Offer­ing to send arti­cles and videos

Last month, I wrote about some guide­lines for effec­tive client com­mu­ni­ca­tion dur­ing tur­bu­lent peri­ods. As part of that, I men­tioned an advi­sor named Robert who I sat down with in Sep­tem­ber of 2008. A 20-year vet­eran and a multi-million dol­lar pro­ducer, he wanted to talk about ramp­ing up his client contact.

As a result of our con­ver­sa­tion, Robert and two asso­ciates on his team began call­ing clients with this offer: “Given what’s hap­pened to mar­kets, we have ramped up the time we spend each week review­ing a vari­ety of the very best sources for new insights. In light of the cur­rent uncer­tainty, I’d be happy to send you arti­cles or video inter­views I find espe­cially rel­e­vant. Is this some­thing that would be of interest?”

Almost with­out excep­tion, clients expressed strong inter­est in get­ting this infor­ma­tion. Then they asked a fol­low up question:

“And how fre­quently would you like to get an arti­cle or video? I could send these to you once a week, once every two weeks or once a month.”

Most clients responded that they’d like to get these weekly — although some did choose every two weeks or every month. In each case, Robert promised to start send­ing these emails — and asked clients to call or send an email if they had any ques­tions about the infor­ma­tion they received.

Mak­ing weekly emails happen

When I met with Robert, I sug­gested he send out emails on Sat­ur­day morn­ings. There were two rea­sons for send­ing these on Sat­ur­day — first because clients are more likely to be able to focus on the arti­cles on Sat­ur­day, sec­ond because of the mes­sage this sent that Robert and his team were going the extra mile and not treat­ing the cri­sis as busi­ness as usual.

Robert and his team set out a sched­ule to make these emails hap­pen. First, they had to select the weekly item to go to clients by end of the day Wednes­day; Robert’s branch man­ager agreed that if he received the arti­cle or video on Wednes­day, approval would fol­low no later than noon on Friday.

Each week­end, Robert and his team divided up respon­si­bil­ity for review­ing pub­li­ca­tions like Forbes, For­tune, Bloomberg Busi­ness Week, New York Times, the Econ­o­mist and Finan­cial Times. They also looked at Bar­rons and Wall Street Jour­nal, although these were less likely can­di­dates for arti­cles to send clients, since they limit access unless you’re an online subscriber.

Robert and his team also looked for videos they could email clients. They began view­ing the PBS inter­view shows Char­lie Rose and Con­suelo Mack and also divided up respon­si­bil­ity for check­ing the sched­ules on Bloomberg and CNBC for pos­si­ble videos. Finally, Robert asked con­tacts at his head office and whole­salers he dealt with to for­ward arti­cles that could be can­di­dates to send clients.

On Wednes­day morn­ing, Robert and his team sat down to review can­di­dates for the Sat­ur­day email. Their prob­lem was never find­ing some­thing to send; it was choos­ing just one item from among the avail­able options. Once they made their selec­tion, Robert wrote a short note to go along with the arti­cle or video, that he sub­mit­ted for approval at the same time as the item itself.

Finally, all clients were divided into three cat­e­gories for the Sat­ur­day morn­ing emails.

For those who chose the weekly option, the email began: “When we spoke, you indi­cated you’d like to receive an arti­cle or video once a week. If you’d like to get this less often, please let me know.”

For clients who opted for biweekly emails, their email was headed: “When we spoke, you said you’d like to receive an arti­cle or video every two weeks. Please let me know if you’d like to receive this either more often or less often.”

And for clients who picked the monthly alter­na­tive, the email said: “When we spoke, you said you’d like to receive an arti­cle or video every month. Please let me know if you’d like to receive this more frequently.”

Lever­ag­ing client com­mu­ni­ca­tion with prospects

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Tags: Amp, Client Communication, Dollar Producer, Email, Host Conference, Market Developments, Market Turmoil, Money Manager, Portfolio Reviews, Portfolios, Prospective Clients, Prospects, Ra, Referrals, Stress, Town Hall Meetings, Town Halls, Turbulent Markets, Turbulent Periods, Veteran
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What to Tell Clients Today – Ten Tips for Effective Client Communication

Wednesday, August 24th, 2011

Recent events have esca­lated investor con­cerns about their portfolios.

Given the mar­ket tumult, many advi­sors know they should be com­mu­ni­cat­ing with clients, but hes­i­tate because of uncer­tainty about what to say and appre­hen­sion about mak­ing things worse rather than better.

Here are five gen­eral guide­lines for client com­mu­ni­ca­tion in tur­bu­lent mar­kets, and five tips for craft­ing the mes­sage that you send today

Some gen­eral principles:

1. No news is NOT good news

Some advi­sors believe that if you don’t hear from clients, every­thing is fine. While that might be true in some cases, the major­ity of anx­ious clients won’t pick up the phone and call you. Rather, they’ll sit and stew, and be vul­ner­a­ble to the next advi­sor who con­tacts them offer­ing to talk.

A crit­i­cal qual­ity that dri­ves sat­is­fac­tion with advi­sors is clients being con­fi­dent that that they’ll hear from you when there are impor­tant devel­op­ments; that you’ll be proac­tive rather than wait­ing for them to call.

2. Don’t wait for defin­i­tive answers

I’ve had advi­sors tell me “Things are chang­ing too fast to be able to say any­thing con­crete” or “I’ll call when things are clearer.”

Guess what? By the time things are clear, it will be too late. Clients need to hear from you in the heat of the prob­lems, not after the fact.

As for being able to say some­thing defin­i­tive, clients gen­er­ally under­stand that things are chang­ing quickly and aren’t look­ing for cut and dried solu­tions. What’s crit­i­cal is that they know you’re on top of things and can be relied on to keep them up to date. Most clients will be happy if you say: “There’s a great deal of uncer­tainty right now, but here are three things we do know …. ” Then fin­ish by promis­ing to pro­vide updates as new infor­ma­tion becomes available.

3. Be spe­cific rather than general

Dur­ing times like these, the more con­crete and spe­cific you are the bet­ter. So for exam­ple, say­ing “Based on earn­ings, the S&P is cheaper today than at the low in March 2009″ is much more per­sua­sive than say­ing “stocks today look excep­tion­ally cheap.”

And avoid any­thing that could be inter­preted as a sales pitch. That means stay­ing away from charts with fund com­pany logos; since these risk being seen as biased and self-interested. Be care­ful about time­worn charts like “the impact of miss­ing the 20 best days” as a rea­son to stay invested. While they may not say it, many investors’ men­tal response to this chart is “and what hap­pened if I missed the 20 worst days?”

4. Pro­vide a bal­anced perspective

In these kinds of mar­kets, clients are look­ing for objec­tive guid­ance and a bal­anced point of view.

To pro­vide that, con­sider address­ing both sides of the argu­ment. If you think mar­ket fears are overblown, start by out­lin­ing the gen­uine causes for worry before going into the evi­dence that sup­ports your case. By first acknowl­edg­ing the real issues that have fuelled con­cerns, you build your cred­i­bil­ity when point­ing out coun­ter­vail­ing arguments.

5. Don’t media bash

Many advi­sors grind their teeth when they see head­lines about stocks that “plum­met” or “plunge” after a 4% decline. These words sum­mon up images of an ele­va­tor in free fall after its cable has snapped, not mar­kets expe­ri­enc­ing a painful but not abnor­mal drop.

That said, crit­i­ciz­ing the media will only make you appear defen­sive. Since this is an argu­ment you’re unlikely to win, you’re bet­ter to keep your thoughts on the media to your­self and move on to other top­ics of conversation.

Some spe­cific things you might want to include in your mes­sage to clients today:

1. “This is not 2008 all over again … and the United States is not Greece”

Some recent com­men­tary has sug­gested that we’re see­ing a reprise of 2008, or that the US debt rat­ing will fol­low that of Greece.

With­out dis­miss­ing the real debt and unem­ploy­ment chal­lenges faced by the United States, today’s issues are noth­ing like those of 2008, when it truly did appear like the world could fall into a 1930s style depres­sion. To illus­trate the dif­fer­ence, here’s an early 2009 Wall Street Jour­nal col­umn by respected Har­vard econ­o­mist Robert Barro, sug­gest­ing that his­tor­i­cal prece­dent indi­cated a 20% chance of another depression.

http://​online​.wsj​.com/​a​r​t​i​c​l​e​/​S​B​1​2​3​6​1​2​5​7​5​5​2​4​4​2​3​9​6​7​.​h​tml

Along the same lines, remind clients that while deal­ing with deficits and fund­ing Social Secu­rity and Medicare will require some tough deci­sions, the good news is that the U.S. does have options that many other coun­tries lack.

If clients are anx­ious about America’s future, with­out being in any way com­pla­cent, point out that America’s top uni­ver­si­ties and the vital­ity and entre­pre­neur­ial spirit of its pri­vate sec­tor are still the envy of the world. The con­cen­tra­tion of global tech­no­log­i­cal inno­va­tion in Sil­i­con Val­ley is one exam­ple of that. Another is US uni­ver­si­ties remain the des­ti­na­tion of choice for the best and bright­est from around the world; nowhere else comes close.

2. “Here are per­spec­tives from respected experts”

In tough mar­kets, you can bol­ster your case with arti­cles from cred­i­ble sources fea­tur­ing rec­og­nized author­i­ties. A clas­sic exam­ple was War­ren Buffett’s Octo­ber 2008 arti­cle in the New York Times, “Buy Amer­i­can, I am.”

Pub­li­ca­tions like Forbes, For­tune, Bloomberg Busi­ness Week, Bar­rons, the Econ­o­mist, Finan­cial Times and Wall Street Jour­nal can all be sources of com­pelling arti­cles that you can email clients. Note that for Bar­rons and Wall Street Jour­nal, there is lim­ited access unless clients are online sub­scribers; be sure to check this first.

In the fall of 2008, I talked to one advi­sor who made this offer to clients: “My team and I spend many hours each week review­ing a vari­ety of the very best sources for new insights. Given how uncer­tain things are right now, if you like I’d be happy to send you one arti­cle each Fri­day that we’ve found espe­cially use­ful in the past week.”

Most clients jumped at the offer. He wrote a short note with each arti­cle and for a fairly small invest­ment of time had weekly face time with his clients. The response was over­whelm­ingly pos­i­tive and he con­tin­ued to do this right through the spring of 2009. In a con­ver­sa­tion last week, he men­tioned that he’s started doing this again. Although, this time plans to con­tinue it indef­i­nitely for those clients who want to get these articles.

3. “And now you can watch these experts as well as read about them”

While writ­ten com­men­taries from experts can have a pos­i­tive result, includ­ing links to video inter­views in your client com­mu­ni­ca­tion can be even more pow­er­ful. There’s no sub­sti­tute for the emo­tional impact of see­ing a respected expert live and in person.

Find­ing the right video to send can be worth the effort. Here are exam­ples of some recent videos you could send clients:

Bloomberg Bill Gross http://​www​.bloomberg​.com/​v​i​d​e​o​/​7​3​4​2​0​7​18/

CNBC War­ren Buf­fett on the debt ceil­ing http://​video​.cnbc​.com/​g​a​l​l​e​r​y​/​?​v​i​d​e​o​=​3​0​0​0​0​3​1​948

Char­lie Rose Robert Rubin http://​www​.char​lierose​.com/​v​i​e​w​/​i​n​t​e​r​v​i​e​w​/​1​1​825

Con­suelo Mack James Grant http://​www​.wealth​track​.com/​v​i​d​e​o​_​p​l​a​y​e​r​-​0​5​.​h​tml

Niall Fer­gu­son http://​blip​.tv/​w​e​a​l​t​h​t​r​a​c​k​-​A​p​p​l​e​T​V​/​n​i​a​l​l​-​f​e​r​g​u​s​o​n​-​5​4​2​4​907

New York Times Tim Gei­th­ner

http://video.nytimes.com/video/2011/08/08/us/politics/100000000987651/an-interview-with-the-treasury-secretary.html?scp=6&sq=tim%20geithner&st=cse

Wall Street Jour­nal Jeremy Siegel and Robert Shiller on the debt mess http://online.wsj.com/video/shiller–siegel-how-to-clean-up-the-debt– mess/E27C3BC5-6E54-4302-85B7-F92FC23BDEE1.html

Nouriel Roubini http://online.wsj.com/video/roubini-warns-of-global-recession-risk/C036B113-6D5F-4524-A5AF-DF2F3E2F8735.html

4. “Re-evaluate portfolios”

For any clients who are anx­ious, this is a nat­ural time to sit down and revisit their port­fo­lios. If the kinds of ups and downs in mar­kets we’ve seen are too much to live with, the only solu­tion is to reduce the expo­sure to stocks. Given today’s rates on bonds, this will typ­i­cally require reduc­ing expec­ta­tions on long term returns and will mean that core assump­tions in finan­cial plans will need to be revis­ited. These kinds of dis­cus­sions aren’t easy, but are essen­tial for clients to have port­fo­lios they can live with.

5. “Stick to core principles ”

Past down­turns have taught us at least three lessons.

First, use the cur­rent down­turn to help clients under­stand how much they can live with, and design port­fo­lios that oper­ate within those risk para­me­ters. Some­thing that can reduce stress for retirees is to have an ample cash cush­ion at all times, so that liv­ing needs can be funded with­out hav­ing to sell assets at depressed prices.

Sec­ond, remind clients that once you’ve got the right asset mix and appro­pri­ate diver­si­fi­ca­tion, port­fo­lios need to be mon­i­tored to ensure that this asset mix is main­tained. That means reg­u­lar rebal­anc­ing back to the tar­get asset mix and ensur­ing that no one stock sec­tor assumes too much weight.

Finally, warn clients against tak­ing rash actions. Good deci­sions are sel­dom made when emo­tions are at their peak. If they want to make a dras­tic change in response to some­thing they read or see, urge them to take 24 hours before act­ing on that impulse. That “cooling-off period” could end up being one of the bet­ter uses of time in mar­kets like these.

No one approach will work for every advi­sor. As you con­sider your client com­mu­ni­ca­tion in the next while, think about adapt­ing some of these tips to let clients know that you are on top of things and are there for them. In mar­kets like these, know­ing their advi­sor is being proac­tive and mon­i­tor­ing their port­fo­lios is one of the key things that can reduce investor anxiety.

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Tags: Amp, Apprehension, Client Communication, Concrete, Contacts, Critical Quality, Definitive Answers, Earnings, Effective Communication, General Principles, Guess, Investor Concerns, Portfolios, Satisfaction, Tumult, Turbulent Markets, Uncertainty
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How to Delegate Tasks

Tuesday, April 26th, 2011

As a finan­cial advi­sor, your abil­ity to grow is largely depen­dent on the amount of time you are able to spend devel­op­ing rela­tion­ships. The key is to del­e­gate most of the tasks related to an advi­sory prac­tice to oth­ers, so that you are able to devote your time to attract­ing and retain­ing clients.

There are three man­age­ment strate­gies when del­e­gat­ing tasks that allow you max­i­mum your time with clients and poten­tial clients:

1.         Opti­miza­tion ver­sus maximization

2.         Del­e­gate Functions

3.         Assign Tasks by address­ing Con­text, Pur­pose, Quan­tity, Qual­ity, Time and Resources (CP — QQT & R)

In this arti­cle, we will look at the third of these strate­gies: Assign Tasks by address­ing Con­text, Pur­pose, Quan­tity, Qual­ity time and Resources {CP – QQT & R}l.

On any given day, as a finan­cial advi­sor, you can per­form tasks that are worth $20–30/hour, up to $500–1,000/hour. The key to effec­tive­ness is to focus on your high­est value tasks. Del­e­gat­ing lower value tasks cre­ates oper­a­tional lever­age when the finan­cial advi­sor is freed up to focus on client build­ing tasks that enhance con­tri­bu­tion to rev­enue and the value of the business.

When del­e­gat­ing, it is impor­tant that you assign tasks with clear duties and objec­tives, and tasks that your peo­ple are capa­ble of com­plet­ing. For instance, ask­ing your admin­is­tra­tive assis­tant to close a big sale is prob­a­bly not going to get you the results you are look­ing for.

Effec­tive del­e­ga­tion involves a six step process:

Con­text

By def­i­n­i­tion, con­text addresses how every­thing ties together. When you assign a task, you start by describ­ing how it relates to other tasks and fits into your over­all objectives

Pur­pose

You describe why this task is impor­tant and what you want to accomplish.

Quan­tity

The focus of quan­tity is how much, of what and by when.

How many clients are you assign­ing to that per­son? Be clear about your expec­ta­tions as to who and what you are del­e­gat­ing. Remem­ber to con­sider if the per­son has the orga­ni­za­tional capa­bil­i­ties to han­dle the task.

How large an account is it? Review what you want done and how you want it done. Deter­mine if per­son has the exper­tise to pro­vide the level of ser­vice required.

How many dol­lars? Be sure that the per­son to whom you are del­e­gat­ing under­stands what kind of finan­cial impact this will have on your busi­ness. Con­sider if the per­son is com­fort­able deal­ing with large sums.

Qual­ity

While quan­ti­ta­tive stan­dards are objec­tive, qual­i­ta­tive mea­sures are more subjective.

Qual­ity stan­dards—Review and make sure the per­son under­stands what needs to be done and to what stan­dards. Every­one has their own inter­pre­ta­tion of a “good” or “thor­ough” job. Make sure you com­mu­ni­cate what exactly it is that you expect.

Com­pa­ra­bles—To avoid con­fu­sion or mis­in­ter­pre­ta­tion, it is a good idea to give the per­son exam­ples of other work that reflects your expec­ta­tions.  This will act as a guide­line for any new work being done.

Out­comes—Make sure the per­son knows what your expec­ta­tions are. That way, they will have a greater chance of car­ry­ing out the task suc­cess­fully if they know what the desired end result is.

Time

The time you intend it to be done by—If you want a task com­pleted on time, set time­lines! Make sure your per­son knows how long they have to fin­ish the task so they can orga­nize their own time accordingly.

Mon­i­tor­ing time—If you want to peri­od­i­cally check in on the progress of the task, set it out in a time sched­ule. If you want cer­tain mile­stones achieved by cer­tain interim dead­lines, com­mu­ni­cate the time expectation.

Resources

When del­e­gat­ing tasks, make sure you setup peo­ple for suc­cess, not fail­ure, by mak­ing sure they have the resources to com­plete the task:

Bud­get—Do they have enough money to cover any costs that may crop up?

Time—Have you set rea­son­able dead­lines for the com­ple­tion of the task, espe­cially in con­sid­er­a­tion of their other responsibilities?

Equip­ment—Do they have access to the right tech­nol­ogy or office equipment?

The help of oth­ers—Do they have access to other per­son­nel that they can go to for opin­ions or to ask questions?

Sum­mary

Effec­tive del­e­ga­tion of tasks enables your peo­ple to demon­strate their com­pe­tence and work inde­pen­dently. In turn, it allows you to focus on your high­est value tasks.

Norm Trainor is the founder of The Covenant Group, a com­pany spe­cial­iz­ing in prac­tice devel­op­ment for advi­sors. For fur­ther infor­ma­tion, visit his Web site at www​.covenant​group​.com.

Fol­low The Covenant Group at:

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