The Efficient Practice: Transform and Optimize Your Financial Advisory Practice for Greater Profits

CHAPTER 2

Managing Resources

For the record, an efficient practice is often defined as one that maximizes profit for the given resources at its disposal. Efficacy is defined as the power or capacity to produce a desired result (i.e. effectiveness). Efficacy is neutral on efficiency. That is, it is possible to be effective, while being inefficient. As an example, suppose you provide an outstanding financial plan to your client. The client derives great benefit from the plan, but it took you (and/or your staff) an inordinately large amount of time to complete it. You might consider the delivery of the plan and client's need as more important than the efficiency of delivering the product to the client.

EFFICIENCY VERSUS EFFICACY

It is also possible to be efficient while also being largely ineffective. Simply pumping out products or work without considering the value to one's clients could create such a situation.

Herein lies the paradox of financial advisory practices. Are those practices in place to provide outstanding services at any cost, or are those practices in business to make money? The irony of this paradox is that, though seemingly opposing concepts, efficiency and efficacy can work hand in hand. In other words, you can have your cake and eat it, too. To accomplish this, a financial advisory practice would first need to assess the efficiency level of the office and staff to determine to what extent improvements need to be made. A few questions that a practice might consider ...