Happy Friday.

Hopefully, your week after the long holiday was smooth, and your teams are cruising through quarter-end.

I’m concluding our second week in Wisconsin. I'm thankful to spend this time in cooler air with family and friends.

Here’s this week’s Connected Advisor:

1. What In-N-Out Teaches Advisory Firms About Managing Exceptions

2. 🎧 A People-Centric Approach to Wealth Management with Lisa Crafford

3. Next Level: The Power of Nitrogen’s Integration Suite

4. Envestnet has a New Owner; Who Benefits?

5. Milemarker On the Road ✈️

Here we go. ▶️

What In-N-Out Teaches Advisory Firms About Managing Exceptions

Everyone loves preferential treatment.

Surprisingly, this also includes advisors. 🙂 

The first time I saw this in an extreme form, was when I met a firm who allowed every advisor to set up their own unique fee structure for every client.

Everyone was special, and everything was complicated.

In turn, everyone was on edge about every possible nuance.

The amount of work it took to nail every detail to onboard them in the company I worked for was 10x any other firm we were bringing on board. There was no way to scale the work. We had to manually check everything.

Just One More Thing

While that was a unique circumstance, most firms have at least some advisors with nuanced history, continuity requirements, and expectations about keeping some clients ‘special.’

At the C-Level, leaders were often battling with how to preserve their advisor’s culture of white-glove behaviors without wrecking the ability of the operations teams to work efficiently. They wanted more uniformity and scalability, while still providing the experience of preferential treatment to their advisors and clients.

So, how do we cross the chasm on all the exceptions that likely exist in our businesses?

Here are a few ideas.

Crossing the Chasm on Operational Exception Management

1. Embrace Your Pareto 
   If you can get to a place where 80% of your business runs uniformly, you will run a far more scalable business.
   
   To be clear, 80/20 is a goal, and if you are radically off this mark today, you’re likely struggling on either side - with not enough high end clients who need specific assistance or too many exceptions that keep operations from following best practices. It might be hard to embrace never having completely scalable business practices, but the 20% side of the Pareto is generally the most financially significant segment of an advisory firm.
   
   As you go through your regular monthly or quarter-end audits, start analyzing what percentage of your book is standardized and then find a pathway to move the exceptions into the standard over time. Similarly, analyze how you are serving your 20% through special service offerings and look for opportunities to increase your value to them.

2. Productize Your Process 
   Many firms really don’t have workflows that they are proud of. It’s very easy to have fragmented processes if you’ve never documented how the work should ideally get done. In that scenario, advisors have no choice but to forge their own path based on what they already know.
   
   First, document all of your preferred workflows. Then, capture the exceptions to the general request. Hopefully you will begin to find that progress can still happen with ease, guarantee that all necessary information is captured and you can use the exception volume to influence how you evolve your processes over time.
   
   Your processes can then be treated as a product within your firm, analyzed and iterated upon regularly — all while monitoring the volume they process.

3. Exception Like In N Out
   In-N-Out has a minimalist menu that I happen to love.
   
   As someone who would take In-N-Out over most other burger options, I never feel like the menu's limit limits my enjoyment. In fact, In N Out's menu offers a fair amount of diversity if you understand how to access the optionality.
   
   Here’s how I think about it: At the center of In-N-Out is the Double Double. Like Payton Manning, you can step up to the line and call all sorts of audibles once you utter the words “I’ll have a Double Double with ______________”
   
   This is where you can drop your exceptions.

   
   Animal Style, Flying Dutchman, Onion Bun, Protein Style, Road Kill Fries, the list goes on.
   
   Are these exceptions and do they hurt scale? Probably. At least a little bit.
   

   Do they make or break the brand experience? I think so.
   
   You can offer ways to enhance the experience without breaking your model. It just takes a spirit of creativity, a willingness to serve, and a strong dedication to experience - both for your client, your advisors, and your team.
   
   Check out your menu once a year and trim what isn’t working every time you are asked to add something new while still offering just the right number of specialty items to keep your customers happy.

4. Always Improve Your Workflows
   There is a lot of power in having workflows that you can continue to improve. If you are stuck or held captive by your workflows today, I’d love to hear how and see if we can help.
   

Let me know
What’s your go-to order at In-N-Out, or go-to burger alternative?

On the Pod -  A People-Centric Approach to Wealth Management with Lisa Crafford

In this insightful episode, Kyle sits down with Lisa Crafford, Managing Director & Head of Advisory at Constellation Wealth Capital. With a rich career spanning small family businesses to Fortune 500 companies in both Australia and the U.S., Lisa brings a wealth of experience to her role, leading the advisory team at Constellation Wealth Capital.

Lisa emphasizes the importance of people in the wealth management industry, highlighting the crucial role of client relationships and firm-wide engagement. She discusses the significant value of internships and the need for firms to invest in their employees to drive growth and innovation. The conversation also covers the impact of technology and data on the future of financial services and the trend toward professionalization within the industry.

Key Takeaways:

1. People-Centric Focus: Success in wealth management hinges on strong client relationships and a dedicated, well-supported team across all roles.

2. Constellation’s Unique Approach: Emphasizes tailored capital solutions for large, fast-growing advisory firms, prioritizing simplicity and effectiveness.

3. Effective Technology Use: Beyond having the latest tools, utilizing technology to enhance firm growth and client experiences is crucial.

4. Comprehensive Financial Planning: Extends beyond retirement, addressing clients’ overall well-being and legacy creation.

5. Internship Programs: Investing in internship programs is essential for fostering the next generation of financial advisors.

Memorable Quotes:

“Our work makes a difference in people’s lives… It’s really about helping people understand their wealth, share and create a legacy with their wealth, and make the world a better place.” - Lisa Crafford

“Having the data and technology is really important. But what are you actually doing with that data? How are you using it to give your clients a better experience?” - Lisa Crafford

“If the employees of your firm feel connected to the mission and feel like they can contribute to that, that’s a game changer in culture and morale.” - Lisa Crafford

Tune in to learn more about the people-centric approach in wealth management and how firms can thrive by investing in their teams and leveraging technology effectively.

The episode is available now on your favorite podcast platform:

• Apple Podcasts

• Spotify

• YouTube
  
  While there, please don’t forget to Download, Like, and Subscribe.

Next Level Live: Nitrogen

We are excited to debut our first Next Level Live Session with our friends at Nitrogen.

Join us for an exclusive session of Next Level Live where we’ll dive deep into The Power of Nitrogen’s Integration Suite.

Event Highlights:

🔹 Deep Dive into Integration Features: Master the art of leveraging Nitrogen’s integration capabilities to streamline workflows and boost efficiency.

🔹 Expert Insights: Gain practical tips and best practices from industry experts.

🔹 Interactive Q&A Session: Get your questions answered in real time by our panel of specialists.

🔹 Case Studies: Learn from real-world examples of businesses that have taken their operations to the next level with Nitrogen’s integration suite.

Why Attend?

💡 Maximize Efficiency: Discover how to optimize your operations by integrating Nitrogen with your existing systems.

💡 Stay Ahead of the Curve: Keep up with the latest trends and innovations in integration technology.

📅 Date: July 31, 2024

🕒 Time: 1pm ET

🌐 Location: Linkedin Live

Bain Changes to Locks at Envestnet

A number of friends started sending me texts about rumors of Envestnet’s pending sale to Bain.

It's not a secret that Envestnet hasn’t had the most favorable run over the past several years. It's also no secret that most RIAs and asset managers struggle to stay public for a long time.

The early talk around this has consultants hoping that Bain may spin out many of Envestnet's parts (Yodlee, MoneyGuide, Tamarac, etc.) back as independent brands. Right now, of course, it’s all just speculation.

What I found most interesting, is the inclusion of Fidelity and Reverence on the cap table.

All in all, I wish everyone the best. Envestnet's work is important to our space, and the improvements they can make have the power to make all of us better.

Milemarker on the Road

Catch our team on the road at the following events or cities:

1. July 15-18 - Denver, CO

2. July 24-26 - Atlanta, GA

3. August 5-6 - New York, NY

If you’re in any of those cities and want to arrange a meeting time, reply to this email, and we’ll get something on the calendar.

Jud Mackrill