Coping With COVID
The pandemic created a nightmarish environment for advisors, who must cope with the human and financial toll on their clients. But a few farsighted practitioners are seizing the changes forced upon them to improve the way they serve their clients and manage their teams.
Everybody has their own story to tell. I’ve been collecting the accounts of advisors and firms as they cope with the pandemic, reporting some of the more interesting or informative ones in the form of impromptu columns for my Inside Information audience.
There was, for example, the evening trivia contest scheduled for 60 of Redtail’s staff members, all of them on Zoom. They used the Kahoot app for online testing to post the questions and record everybody’s answers and response times. The goal was to keep everybody in touch socially at a time when there could be no water cooler conversations.
Or Mark Newfield’s letter to clients, comparing the pandemic, economically, to the ecological benefits of a forest fire.
Facet Wealth is scheduling virtual happy hours for staff in Zoom groups of six, with the invitations randomly generated.
Rick Kahler has developed a psychological Jujutsu conversation for panicking clients who want to retreat to cash during market downturns, which pulls them instantly out of a lizard-brain shut-down to a more cognitive response. Many advisors are becoming acquainted not only with video conferencing but also video recordings, and their geographic radius for clients has expanded from 50 miles in any direction to (face-to-screen) on any continent on the planet (except, maybe, Antarctica). Some advisors have found a way to generate more referrals and new clients, more easily, than they ever have before.
Recently, I was able to hear a story that encompasses the broad spectrum of challenges that large and mid-sized firms are facing, when I talked with Brian Martin, managing director of operations and wealth management at Accredited Investors Wealth Management in Edina, MN. “We’ve been reading in the industry publications where some people are saying there is nothing to the transition,” he says, “and others are saying that this is a five-alarm fire and there aren’t enough hours in the day. In our case, getting our staff to be functional at home was relatively easy. That was almost like table stakes.”
In that regard, Accredited was foresighted enough to already have every staff member working off of a laptop that connected with one or two monitors, handling chores via software in the cloud. On March 18, after the Minnesota state governor issued a stay-at-home order, everybody simply carried their laptop – and in some cases also their monitors – out to the car and set up on a convenient table at home.
Being as functional at home as they were at the office was, of course, not nearly enough. “As the environment intensified,” says Martin, “we had to respond to more phone calls, more transactions we were processing, time-sensitive planning related to what was going on in the market, PPP with the CARES Act, rebalancing opportunities, Roth conversions and opportunistic wealth transfers. Those demands,” he adds, “have been higher than I’ve ever seen it, even if we took the pandemic part out of it.”
In the first partial week of working remotely, the firm’s 25 planners scheduled 260 Zoom meetings covering over 8,000 minutes.
Meanwhile, the firm had the additional burden of re-imagining some of its core processes – and, at the same time, training clients on how to handle certain routine activities differently from what they were accustomed to. Ironically, the firm’s traditional culture of high-touch service made these adaptations more challenging.
“We’re used to handling everything for the client,” says Martin. “But now, with everybody working remotely and no clients coming into the office, we had to get all our clients on e-signature through Schwab. That meant figuring out our internal procedure for opening these accounts electronically and then training our clients on what they needed to do on their end.”
Some processes use Schwab’s e-authorization, while others are handled through DocuSign, and there are different workflows for each. “We had to get the team understanding which category this or that is in, depending on what we need to get signed,” Martin explains. “And then we had to put together a ‘how-to’ that our advisors could give to clients, explaining in detail what they needed to do.”
For instance, with Schwab Advisor Services as the custodian, clients would need to enroll in Schwab Alliance before they could e-authorize a wire transfer. That means they had to be shown how to set up their own login and learn what to click as they navigated the site. “We have a huge number of clients who have never had to do those things,” says Martin. “They see us as the face of their financial accounts, and rely on our services, so they never before had to worry about setting up their own login at the custodian.”
Eventually, Martin expects this added work burden to benefit the firm. “To be honest, handling everything for our clients by hand probably wasn’t the best strategy,” he admits. “We stayed manual on too many client-facing processes because we wanted to be white-glove.” It is also possible that clients, in better circumstances, might have resisted – or resented – having to do some of these things on their own. But now they recognize the necessity of being trained to take some of the burdens off of the firm’s back office. “They’re experiencing this everywhere in their lives in this environment we’re in,” says Martin, “so these changes are probably more tolerated now.”
Indeed, some of the changes were actually embraced, causing Martin to wonder why they weren’t changed long ago. “We were still delivering a fair amount of our quarterly reports via paper,” Martin explains. “But as we all started working remotely, we sent out a notice to clients telling them that, for this next quarter, we were going to be delivering everything electronically to their vault.”
Then Martin and his team cringed, waiting for a pushback that never came. “There was zero negative response,” he says. “Literally zero. The only replies we got were things like: Wow! This is great! If you guys can, it would be awesome if you never sent me anything on paper again. Some of these changes,” Martin adds ruefully, “are things that clients wanted maybe a bit more than we appreciated. They were tolerating our manual processes rather than loving them.”
The firm has also been forced to create a more efficient monthly billing process. “We were having a lot of people touch it, and we had some internal tools that did some of the calculations, but the whole process took a while,” says Martin.
But with everybody working remotely, it was harder to pass this process around for different people to review. “We were forced to automate it internally,” Martin explains. “Coming out of this, we will have, by many factors, reduced the amount of man-hours invested in the monthly billing process.”
At the same time, the firm engaged a bill-paying service – on the theory that manually cutting checks and having them signed would be awkward if there was nobody in the office to operate the check machine or pen a signature. “We now route everything through a service called bill.com," says Martin. “That cuts a handful of hours from our accounting office each month.”
Is anybody working in the office these days? The Accredited building is accessible with a key card, and the firm shut off access for all but company co-founder Ross Levin, who still works alone in his office, and a rotating administrative staff member who is mostly there to pick up UPS drop-offs.
Interestingly, these challenges (including keeping up with who has key-card access) take up a small fraction of Martin’s mindshare these days. “The biggest thing we are trying to do is give our remote workers permission to manage their lives,” he says.
Meaning? Many staffers have young children at home who are now being home-schooled, so working nine-to-five is not a realistic option. “We’re giving people permission to do things like block their calendars during certain times of the day when they just have to go take care of their kids,” says Martin. “Or they can put on their calendar: I can only handle this number of meetings on Mondays, or this many throughout the week, because I’m so stretched.”
The firm has assigned a couple of administrative personnel to handle scheduling duties, so that when clients want to have an updated financial checkup, they look at the advisors’ calendars to see who’s available – and who’s not. This was especially complicated during the first couple of weeks of the pandemic. “When we shut down, we already had meetings with clients scheduled through the end of April,” says Martin. “Then we had a lot of clients who were not scheduled for meetings quite understandably reaching out and saying, hey, I need to talk with my team.”
During that hectic two-week period when scheduled and unscheduled meetings threatened to get out of control, Martin and his team made the decision to tell clients that the firm would no longer be proactively scheduling regular client meetings, in order to reserve calendar time for the clients who needed to get in touch with their advisors quickly. “We’re getting in touch with clients more than ever,” says Martin. “But it is much more ad hoc, with 30-minute calls or 30-minute Zoom conversations, rather than, hey, we have a meeting on the calendar; we’re going to prep into it and meet at a certain time.”
The advisory staff is working fewer hours per day and week, right? “Actually, I would tell you that most of them are probably working more hours,” says Martin. “They’re doing their Zoom meetings, internal or external, during the day, and building their kids’ schedule around that, so when they aren’t on a meeting, they’re taking care of kids or the house. And then they’re taking care of everything else in the off hours, catching up on emails, preparing for future client meetings, things like that. We’re seeing a lot more 10:00 PM emails,” Martin adds, “than we ever saw before.”
Martin is concerned that this work schedule is not sustainable, and as the pandemic shutdown rolls into its third month, he is becoming increasingly concerned that key staff members will reach their limit. “I may have to start saying, hey, you have to cancel some things on your calendar,” he says. “You have to take care of your family. Step away for a little while; we’ll figure out how to cover things.”
To lighten the load, Accredited’s management team has been scaling back initiatives that would otherwise occupy the staff’s time internally. “The biggest initiative that got pushed aside is, every May we do all of our internal performance reviews,” says Martin. “That is something we put quite a bit of effort into each year, and we consider it to be culturally, and from a business standpoint, very valuable. Everyone has a performance review each year, and that consists of feedback from a pretty large number of their colleagues.”
These reviews are now on indefinite hold. “Mostly because of the huge amount of work it entails, that we don’t want to ask the management team to invest in,” Martin says. “That’s something we’ll pick back up later this summer.”
Another initiative on hold? “We had been working through what our services should look like for generation two of our clients – our clients’ kids,” says Martin. “How do we offer services that are often coordinated with their parents’ services, and how are they different? That is a pretty important initiative, but it was soaking up a lot of bandwidth from our staff,” Martin adds. “It’s on hold due to staff capacity issues.”
What’s the bigger picture here, from a management standpoint? What is Martin’s overarching goal as the firm fights its way through the challenges of a global pandemic, lockdown, new tax and government stimulus initiatives, opportunities to rebalance, Roth funding, estate planning opportunities, and calming the fears of clients who have endured a sickening 30% drop in the markets? He starts, unsurprisingly, with having the staff be there for clients, but says that this is less complicated than you might imagine, because the staff has lived, for years, in a culture where the clients’ needs come first.
What’s new is how the firm needs to take care of the staff that is taking care of the clients. When everybody was in the office, that was largely handled by a benevolent set of policies and some internal coaching and personal development processes. Now, it’s more of a person-by-person check-in, and helping the self-isolated members of the Accredited team realize not only that it’s okay to look after their own needs, but that the firm wants them to do so.
“Culturally, we ask our staff to lean in pretty hard to their job,” says Martin. “When clients need it, we ask staff to show up, and we push them pretty hard. So we consider it our obligation to also lean into their lives when they need it,” he adds. “Times like this are an opportunity, as a firm, to say: What can we do to help improve the lives of our staff? Can we be more flexible and understanding at a time when they need us to be? Can we assure them that they won’t take pay cuts because of what’s going on in the market?”
Martin says that the firm’s obligation during the crisis is to keep asking: How can we help right now? And he has found that little things count as much as big ones. The firm has reimbursed people when they ordered meals from a local restaurant, and it has accelerated its annual charitable-matching gift.
There is a self-interested element to all this, which might not be immediately obvious. “Strategically, I think as we look ahead, there is a battle for talent in this industry,” says Martin. “The way your staff is treated through this time period will be a story that gets told in the recruiting process. What is your staff experience, and how was your life affected by working for Accredited during this time period? That question will either be a powerful recruiting tool, or not, for firms going forward in the next wave of talent wars.”
Finally, how is he holding up? The question clearly catches Martin off-guard.
“I have a split life,” he admits. “I handle operations, but I am also an advisor. I work with clients as well.”
On the operations side, Martin says that this pandemic era could become one of the crowning achievements of his career, if he continues to handle it effectively. “I should be glowing about it,” he says. “But on the other side, it is a really challenging time to be working with clients, and dealing with so much stress in their lives. And so it’s hard to feel good about what is going on in this business, regardless of how well the firm is sustaining through this.”
He confesses that he has a two-year-old running around the house, who does not respect the boundaries of a nine-to-five schedule, who is apt to sit in his lap in the middle of a Zoom call. “I think in the future, we’re going to see a lot more acceptance of kids on Zoom calls, and kid interruptions,” he says. “It will become more culturally-accepted to have kid conflicts.”
Meanwhile, his wife will be having their second child in less than a week from our conversation. “Life,” says Martin, “will get even more complicated.”
Bob Veres' Inside Information service is the best practice management, marketing, client service resource for financial services professionals. Check out his blog at: www.bobveres.com.