There are two things that the financial advisors I work with typically want, and your first guesses are probably right: One is more time; the other is more money.
If you want to keep your hours down and your income up, you’re going to have to learn to work a lot smarter, not just harder. Most financial advisors I know are already working 50- to 60-hour weeks. They must learn to be more efficient and more effective. Particularly in today’s difficult market, it’s a great idea to look at ways to make your current business more productive and efficient.
When it comes to managing time, I break it into five key activities.
Golden Time refers to the hours you get paid for. This is time that you spend servicing clients, selling products, or providing financial advice, depending on what your business model is. Golden Hours are the only hours that you actually generate revenue.
A second category is Marketing Time. It includes marketing, public relations, networking, and relationship-building. This is everything you do to generate new clients.
The third kind of time is Management Time. This includes staff meetings, planning, managing subordinates, and administrative work that only you can do.
The fourth type of time is Improvement Time. This is the time you spend working on your business infrastructure, attending workshops and classes, and developing yourself and your business so that you can be more productive. This is an important element if you want to build a business.
Michael Gerber calls this working on your business, as opposed to working in it.
The fifth type of time is one we all work toward: Leisure Time, otherwise known as resting, relaxing, and recharging our batteries.
The only time that you actually get paid for is Golden Time. But you must get the other activities done to keep your business running. To increase your income, you need to spend more of your time generating revenue.
If you are running a fee-based business, there are five ways you can increase your income. They require you to balance the five types of time to maximize your efficiency. If you’re currently building a fee-based business, you can build all these into your business model so you don’t have to change later.
Let’s look at ways to raise your hourly income during Golden Time, the time when you’re actually making money. You’ll see that small improvements in each of these different areas can make a huge impact on your hourly income and your net income for the year. Of course, you could also increase your income by working longer, but that would reduce your Leisure Time.
Raise Your Prices
Although this may appear to be almost impossible in today’s marketplace, in reality, you can achieve it quite simply. One of the easiest ways to do it is to create a menu of Silver, Gold, and Platinum levels of service.
You can offer basic money management services for 100 basis points per year. This would include one face-to-face meeting. For 150 basis points you would include four face-to-face meetings. And for 200 basis points you can create an elite club that includes special entertainment events and personalized services like house-sitting when they travel and washing their car when they come in for quarterly meetings. You must add more value if you want your clients to pay you more.
The best way to determine what your clients are willing to pay for is to ask them. Put together a list of possible value-added services, send it to your clients with a cover letter, and ask them to rate each option on a scale of 1 to 5.
For retired people, these services are typically lifestyle-oriented–annual cruises, Valentine’s parties, golf clinics, or theater parties. For business owners and professionals, value-added services are often based on comprehensive wealth management. This means advising them on all areas of their wealth, including their businesses, personal investments, retirement plans, and liabilities.
The second way you can raise your fees is to raise your break points. If you typically have one fee structure from $100,000 to $250,000, you might raise that break point to $500,000. This raises your average fees without bringing attention to the change. Consider either or both tactics. Remember that any additional fees typically will add directly to your bottom line, but be cautious about raising fees without providing additional services.
Increase Your Average Account Size