© tim voorhees, jd, mba, 1996-2005 1 best practices session h updated december 15, 2004

© Tim Voorhees, JD, MBA, 1996-2005

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Best Practices Session HUpdated December 15, 2004


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Delegating Administrative

Work to a Relationship

Manager


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Delegate Administrative Work!

a. Pursue your calling, develop your unique talents, and move from success to significance by delegating tedious “administrivia” to competent support people!

b. Review ideas developed with input from some of the most highly-regarded Relationship Managers in the insurance industry.

c. Hire a Relationship Manager at a low cost and pay his or her salary with commissions from business that the adviser would not otherwise have time to develop.


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What Does a “Relationship Manager” Do?

• Frees up the planner to focus on his/her unique abilities

• Focuses on maintaining planners existing book of business

• Looks for new planning and product sale opportunities

• Is the point person for each case planned through Family Office Services


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Who Is a “Relationship Manager”

• A bright junior financial planner• A paraplanner• An account executive with a Family Office• A “virtual robot” that coordinates web-

tracking– www.AdviserSquare.com– www.eMoneyAdvisor.com– www.FamilyOffice.com– www.VFOS.com (Virtual Family Office Services)

http://www.advisersquare.com/

http://www.emoneyadvisor.com/

http://www.familyoffice.com/

http://www.vfos.com/


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Relationship Manager Frees Up the Wealth Adviser to Focus on

Unique Ability

• Wealth Adviser does not have to be the main point of contact

• Wealth Adviser meets with the client upfront and positions Relationship Manager as the main point of contact

• Wealth Adviser remains involved in the case through contact with the Relationship Manager (memos, voicemails)

• Wealth Adviser meets with client at end of process

• Conference calls/meetings with clients during the planning process and beyond are scheduled when appropriate


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Relationship Manager Leverages the Wealth Adviser

• Wealth Adviser oversee development of plan

• Wealth Adviser oversees implementation of the most profitable products

• RM facilitates implementation of the rest of the plan


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The RM Focuses on Building Relationships

• Keys to establishing strong relationships with clients– visiting the client’s home and/or office– building relationships with family members

and other advisers– establishing mutual trust

• Strong relationships are essential to the success of the business – in the present – keeping existing business– in the future – client referrals and

references from existing clients


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Duties of the Relationship Manager

• Counselor• Analyst• Planner• Adviser Coordinator• Book Publisher• Licensed Implementer• Evaluator/Educator

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™™SEVEN LEVELS OF SERVICE PROVIDED BY A CAPABLE SEVEN LEVELS OF SERVICE PROVIDED BY A CAPABLE

PLANNING TEAMPLANNING TEAM7 Roles7 Roles 7 Deliverables7 Deliverables7 Levels7 Levels

LICENSED IMPLEMENTER

BINDER PUBLISHER

ADVISER COORDINATOR

ANALYST

PLANNER

COUNSELOR

Annual Updates

Legal Documents

Family Wealth Statement

Financial Checkup and/or

Value Proposition Letter

Tactical Plan

and/or

Comprehensive Plan

EVALUATOR/EDUCATOR

C

A

PABLE


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Counselor• Try to do FWS with every client; approx. 75%

of clients proceed• RM helps the planner record interviews• RM organizes Client Meetings

- Family retreats -- invite families from same region- Spend about 4 hours; seldom for more than one day

• RM prepares the Family Wealth Statement– RM develops the draft FWS for the client– RM helps sort out the incongruities – RM spends about about 1 day preparing

final FWS



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Analyst• Analyze the plan from 8 angles: income taxes,

investments, insurance, estate taxes, wealth transfer, business succession, compensation, and debt financing.

• Prepare net worth statement with footnotes with recommendations about each asset.

• Develop a Retirement Capital spreadsheet.• Review legal documents; e.g., living trusts, FLPs.



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Planner• Set up first phone call with prospect• Participate in all meetings and strategy

sessions• Coordinate signing of engagement agreement

and collection of planning fee (upfront retainer)

• Gather client data; copy and disseminate to planning team members (CPA’s, attorneys, casewriters, etc.)

• Return calls and follow through on promises made

• Deliver plan to client with planner



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Adviser Coordinator• RM may coordinate with the clients existing

lawyer and CPA.• RM oversees systems to involve other advisers

in the planning process.• RM monitors Case Tracker spreadsheet to

document action steps and email regular reports to all advisers involved with each case.



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Binder Publisher• Planner can save money and

maximize control by equipping the RM to develop and publish plans

• RMs can also work with the Family Office Services fulfillment center



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Licensed Implementer• Coordinates implementation of plan

– Asset management (opening new accounts, etc.)

– Insurance (premium payments, etc.)– Trust (coordinating distributions, etc.)

• Prepares “transition” letter and collects final portion of fee



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Evaluation/Education• Serving as clients’ main point of contact -

“weaning” clients off of daily contact with the planner is essential

• Call every client on a quarterly basis – Send out quarterly reports: Reports in Access on

asset allocation, portfolio appraisals, ROI since inception

– Calls of 5 minutes to 30 minutes each quarter– Sometimes get stock manager on the phone– Hold the meetings where the client wanted to meet

• Annual reviews where the client wants to meet to review plan, insurance, asset management, and new planning and product opportunities– Deliver reports: updated net worth statement and

footnotes– Charge 10% of the first year fee for the annual review

• Offer continuing education for client’s family



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Other• Manage day-to-day operations of the

practice• Maintain client files• Monitor database of action items• Return calls and follow through on

promises made• Working with planner to develop new

relationships



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Hiring the Relationship Manager

• What qualifications?– Kolbe: high follow through– CFP or equivalent– Bright and diligent according

to references

• Where to look?– Local business college– CFP study groups – FPA newsletters– retrain a former staff person– referrals from other advisers


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Job Description

• RM does what the planner did on a daily basis– Case tracking– Administration– Anything else that keeps the planner from

focusing on her/his unique ability

• RM needs ability to document and follow-up• RM needs basic understanding of

everything on the CFP exam: • RM needs an understanding of finance

– Prepare net worth statement with footnotes and recommendations about each asset

– Develop income statement or budget– Develop a Retirement Capital spreadsheet– Review legal documents; e.g., living trusts, FLPs


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Compensation • Base relatively low: $3,000 to $4,000

per month (MBA or CFP)• Incentive (via revenue sharing)

– $100,000+ possible with CFP training, licenses, outstanding communication skills, and excellent client presence

• Proper licensing makes it easier to offer incentive compensation (insurance, securities, etc.)


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What Is a Typical Commission Split Between the RM and the Producer?

• Work old book of business – RM receives 20% of the gross – Planner nets 68% because of the 12%

to the BD – The planner has the insurance and

liability• If RM works without assistance from

Planner – RM receives 25% of the gross


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Training the Relationship Manager

• Administrative/organizational skills• Family Office Services training

– Best Practices Workshop– Best Tools Workshop

• Basic understanding of CFP materials: – Estate and retirement planning– Taxation– Insurance and benefits – Asset management

• Extensive securities knowledge preferred– Series 7, 24, 63, 65– Insurance license


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Forms and Systems• Standard documents:

Engagement Kit Welcome letter Request for information Client release for collecting information from

CPA/attorney Memos to file Transition letters (when preliminary and final

plans delivered-- collect final portion of fee-- outline services available during

implementation that are not covered in original fee

• Accountability systems- checklist of client names and outstanding action items are reviewed weekly

• Emails and web links to keep all parties informed


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How Many Clients Can the RM Support?

• 100 to 200, but depends on the net worth of the clients

• Clientele of one very successful RM– 80 clients with a 10MM or great net

worth– 200 with less than 10MM net worth

• If doing comprehensive money management or insurance business, then maybe handle only 30-40 clients very well


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How Does the RM Assist With Money Management?

• Do internal asset allocation with 30 to 40 funds for a wrap fee

• Create Investment Policy Statement • Oversee in-house stock managers• Custodialize stocks• Explain money management

products, such as private equity and hedge funds


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Problems That Can Limit the Relationship Manager’s

Effectiveness• Not knowing about communications

between planner and client• Getting mired in administrivia that

should be delegated to a secretary or intern

• Failure to properly document conversations with clients

• Failure to maintain communication with clients (follow-up letters, phone calls)

• Confusion regarding wrap fees


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Best Practices CD - Session H Resources

174 Job Description - Executive Assistant


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Best Practices Training

Session AAdapting to Planning Trends and Presenting Valuable Deliverables to Clients

Session B Charging Fees and Using Appropriate Engagement Letters

Session CDelegating Technical Work to a Virtual Back Office and Advanced Sales Department

Session DDeveloping the Value Proposition Letter after a Discovery Session, and Preparing the Family Wealth Statement During/After a Client Retreat

Session EDeveloping Relationships With CPAs, Bankers, Lawyers, Charitable Development Officers, and Other Referral Sources

Session FPresenting Your Materials During Client Seminars, Training Workshops, and One-On-One Presentations

Session GComplying with IRS, SEC, NASD, AICPA, ABA, FPA, and Other Relevant Guidelines

Session HFocusing on Your Unique Talents by Delegating “Administrivia” to a Relationship Manager

Session IConducting a Strategy Session to Integrate Tools Needed to Achieve All of Your Clients' Wealth Optimization Goals

Session JTracking cases and portfolios with web-based project management and CRM systems


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Phone: 800-447-7090 (949-453-2900 in CA)

Fax: 866-447-7090Voicemail: 877-447-7090Email: [email protected]

Family Office Services