Breaking Bottlenecks to Scalability - Administration
The data gathering and administration aspect of financial planning is unavoidable for any practice, yet it is often the most neglected part of the process. Most existing services and IT solutions offer little in this regard and instead focus on the more interesting aspects like investment analysis and cash flow reporting.
With few established ways to ease the administrative burden, many view a slow and laborious admin process as a pill that they just have to swallow, despite administration being an essential part of a firm's daily workflow. However, in our experience at PowerPlanner, there's quite a lot of scope for optimising your administration.
This post shares PowerPlanner's top 4 tips for breaking the bottleneck in your admin process.
Standardise Information Requests
Few things are more annoying in financial administration than when you wait weeks for a provider to get back to you, only to find that you're still missing information or that they've sent you something irrelevant. Worse still is when they reject the LOA because of missing or outdated details, meaning you not only have to re-request the plan information but have the hassle of going back to the client as well!
Use Approved Templates
One part of the solution to this is to ensure you ask the right questions of the provider. This is where standardising information requests helps.
By establishing a comprehensive set of data gathering questions and sending it with every LOA, you minimise the risk of missing important details. It can also help in file reviews, as it demonstrates to compliance auditors that you're always asking the right questions in every case.
It's a good idea to have different question sets depending on the type of plan. We find that, as a minimum, one set for DC pensions, one for DB pensions and one for investments works well, as it's easy to select the right one for a plan but isn't too many to manage.
Perform Validation
Issues like this should be largely avoided by ensuring your data is spot on from the outset. Having standard letters of authority that display all relevant client and adviser details should ensure your client servicing requests are always acceptable to scheme administrators.
It's a good idea to validate information as well. If something on the LOA doesn't match the fact find or doesn't ring true based on some plan information the client's handed over in the meeting then query it with the client up front. That quick, 5-minute phone call can save weeks of delays later on, and furthermore demonstrates your diligence to the client which gives him/her an increased confidence in your services.
Batch Processing
The default approach to gathering information is, of course, a sequential one. As each LOA comes in from a client, it gets recorded and sent straight to the relevant provider along with a request for plan information.
This is fine for the odd case, but what if you have a lot of LOAs coming in for members of one particular pension scheme? You may find it's easier to file them together and then set aside a block of time to process them in bulk. You may be surprised at how much time can be saved when scanning a large batch at once, and with the documents all going to the same address the post is made easier too.
Many providers will also accept faxed or emailed requests for information with an electronic copy of an LOA, so this can be an efficient way of getting plan details and cracking on with a case. Be sure, however, to bear in mind security when emailing sensitive documents like LOAs.
Also, if you know which providers are more efficient than others, you can take advantage of this when scheduling your requests. It's not uncommon for the managers of old occupational DB/DC schemes to take 2-3 months to provide information, whereas firms like Aviva or Scottish Widows often respond in under a fortnight.
With this is mind, it's clear that the LOAs for large pension schemes need processing first to minimise delays, whereas those going to more efficient providers can be buffered up and requested in bulk later on. This ultimately saves time in terms of administrative work but results in no delays from the client's perspective, as the overall process is only ever as fast as the slowest provider.
It may seem counter-intuitive to wait sometimes and not process every LOA immediately, but while the proverbial ball is in your firm's court this really can help you optimise your admin.
Schedule Chases
It would be marvellous if gathering information was just a matter of sending off a single message and waiting for a response containing clear and comprehensive plan details. However, the world of financial planning administration just hasn't reached that high a standard of information exchange yet.
It's almost inevitable that n-day response times will be missed, questions won't be answered or some documents won't arrive. At some point you're going to need to phone a provider to chase up an outstanding request or get a progress update.
The process of chasing providers becomes hard to manage once you have more than a couple of plans in the pipeline. It's therefore good practice to schedule calls to providers at the point when you send information requests. Around a week is generally a good idea, as this gives the provider time to receive the LOA and begin processing it, by which time they should be able to give you an estimated due date. Making the phone call also gives you verification that your request has been properly received.
How do you schedule chases?
There's plenty of choice here. Online tools like Calendly can help, or if you want something a bit more in-depth to manage the whole administration process then Trello is pretty good. For those comfortable with Microsoft Office 365, even the Outlook calendar can be used to schedule chase reminders.
Another tip is to allocate a specific block of time in which to make the calls. As noted above regarding batch processing, allocating time for one specific task often leads to greater productivity as opposed to flitting between several disparate duties in a short time period. If you can set aside an hour of a particular day to chase providers and schedule everything within this time slot then you'll find the process becomes much more efficient and easier to manage.
Record Information
It's only by keeping records and measuring things that you're able to see what's working for you and identify where further improvements need to be made.
Most firms record basic contact details for providers, of course, but by going further and also logging things like provider turnaround times and quality of information it can really help boost efficiency.
Once you've dealt with a provider or scheme administrator, take the time to log what you've learned. Note things like whether they accept emailed LOAs, their standard turnaround times, whether they've kept to their standard turnaround times, helpfulness, how long you're on hold etc. It may sound excessive but if you're doing a lot of administration and data gathering then this kind of knowledge can help drive a lean, optimised process.
For instance, if you know a certain pension scheme administration company is always going to take 6 weeks to get back to you, then this kind of knowledge means you don't have to waste your time chasing them on a standard fortnightly basis. Similarly, if a provider is notorious for keeping you on hold for 20 minutes, it may be worth calling only when you have 2 or 3 plans scheduled for chasing, so that once you do eventually get through you can make the most of your time on the phone.
These may sound like pretty obvious things, but they're only possible to do if you have the data in which to observe these trends and thus the knowledge to plan accordingly.
Summary
Hopefully this gives you some useful ideas about how small tweaks can be effective at loosening that administrative bottleneck. Just a few minor improvements here or there can add up to make a big difference in overall productivity!