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Quality Over Speed: How Firms Measure Up

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When you’re measuring the performance of the advisors at your firm, there are numerous and clear metrics to track, including the number of clients they’re responsible for, client satisfaction and the new business they’re attracting.

But few advisors have comparable metrics when it comes to measuring the performance of their operations staff. When Sarah completes a trade order faster than Fred or is unusually efficient at completing insurance forms or cash requests, does anybody notice? Is measuring such work even relevant?

If you can’t measure the performance of the people who drive your back office, you can’t reward excellence or foster improvement on that side of your firm. Bonuses and promotions are at stake.

So for several weeks I asked my Inside Information newsletter readers how they measure their operations staff’s performance.

One of the more interesting responses came from Greg Friedman, founder and president of Private Ocean in San Rafael, Calif., who’s also president of Junxure. Junxure creates and sells CRM and practice management software (and is one of the exhibitors at my annual conference, Insider’s Forum). Friedman has unusual familiarity with some of the tools advisors use to stay on top of operations performance.

Friedman starts his performance measurement by assigning to all new clients a lead advisor, a support advisor and one of the client service associates on Private Ocean’s operations staff.  “We tell them that any client service person can do any of the tasks for any client, but that this person is directly responsible to you,” Friedman says.

Theoretically, these ops people should all be responsible for the same number of clients. But after a flurry of new business came in, Friedman ran a report and discovered that one of his back office staff members was working with 120 clients, another with 124, another with 128, while a fourth was responsible for just 66 clients. “He was having trouble with 66, while the others with more than 120 were sailing along,” Friedman says.


To make sure he was being fair, Friedman reviewed the makeup of those particular clients on the theory that someone handling a high percentage of Private Ocean’s platinum-level clients could not manage as many as someone working with the less wealthy (and complicated) gold-level and silver-level clients.

He discovered that the employee with 128 clients had a heavy concentration of more complex clients, while the employee who had been struggling the most was working primarily with silver-level clients. Moreover, that employee had incurred more customer complaints over the past year than the three other employees put together. Friedman eventually fired this less productive employee and is seeking a replacement.

Junxure and other CRM programs can determine how long certain actions take from the time they’re assigned through completion, but Friedman gives that data only a passing glance. If tasks are being done in a reasonable time frame, he isn’t concerned that one person takes seconds while another takes minutes. If they aren’t, he looks to see if it’s the result of factors outside of the ops staff’s control. Paperwork may have been flagged by the custodian, held up by the client or a procedure may need fixing.

Friedman’s evaluation focuses on more subjective issues. One is the ability and willingness to identify ways to improve the company’s processes and automate rote work. “I’m most appreciative of the people who are willing to make a commitment to constant, never-ending improvement,” Friedman says.

He also looks for a low number of mistakes. “The best operations people have a high degree of attention to detail just built into their DNA,” Friedman says. “And they’re smart enough to learn from their mistakes. I am super tolerant of mistakes,” he adds, “because they’re a learning opportunity and a chance for us to get better. But if you’re constantly leaving out fields or the numbers aren’t right the first and second time, you’re probably in the wrong job.”

The most important characteristic Friedman seeks in his operations staff is “a true service approach to life. … I want them thinking: ‘I want to help,’ ” he says. “Whether it’s a client, or internally with each other, or the lady crossing the street who can’t see, I want them to be an instinctive helper. I want somebody who cares and wants to help you.”


That quality makes several other measurements less relevant. It doesn’t matter nearly as much if a staff member is faster if clients are experiencing rude behavior on the phone. “When you think about it, when you call your cable company or the phone company for tech support, your typical experience is not great,” Friedman says. “Those support centers track the phone operator’s time down to the second, and that person you’ve called can hardly wait to get you off the phone.” 

When you call Private Ocean, Friedman wants you to have a very different experience. “We want to go above and beyond, and leave people with a wow experience,” he says. “It’s in the tone of voice, in the attitude, so the staff person comes across as clearly wanting to help you.”


Other advisors I’ve talked with have sophisticated tracking mechanisms and have broken down the list of client-related back office tasks to a much finer gauge than what you typically find. Some firms track time, while others track overall throughput of sequences of tasks to identify bottlenecks. Some firms simply measure how effectively the operations team frees up the time of lead and associate advisors. 

Friedman’s experience suggests it’s possible to pay attention to the wrong things when you try to identify and reward extraordinary performance on the operations side of your business. Seconds count, but so does the client experience and so does the ability and willingness to constantly innovate, change and adapt to new technologies and drive rote work back into the hands of the computers, where it belongs.

“These kinds of things are not metric-driven,” Friedman says. “I think I have access to as much data as anybody,” referring the fact that Junxure software evolves through his own work as a practitioner. “But there are times when the qualitative trumps the quantitative.”                                                         

Bob Veres, a Financial Planning columnist in San Diego, is publisher of Inside Information, an information service for financial advisors. Follow him on Twitter at @BobVeres.

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