Google the phrase “time management” and you’ll get close to 1.2 billion hits. Not bad at a time when Britney Spears results in a paltry 31 million (at least before her MTV-VMA comeback). Time, it seems, is on our minds, if not our side. Time is clearly on the minds of the more than 500 financial advisors who took part in Advisor Impact’s recent study on time management and personal productivity and who put this at the top of their collective wish list for practice support. While the time challenge may be self-evident, the solutions are not.
Many writers on the subject have started with the obvious–everyone is dealt the same 8,736 hours in a year and that isn’t likely to change. So time management isn’t about “finding time.” Rather, it is about finding practical ways to help us do more of the things we need to do to drive our businesses forward. In our industry, we can throw in the added challenge of uncontrollable markets, a changing regulatory environment and increasingly demanding client bases, just to keep it interesting.
For advisors to manage time more effectively, their focus needs to be on improving efficiency, and that begins with the recognition that efficiency has two very distinct parts: structural and personal efficiency
- Structural efficiency is about the foundation of the business, or the underlying business model. It includes, but is certainly not limited to, the structure of your team, your client selection strategy, and the processes that you have implemented to deliver a consistent client experience.
- Personal (or tactical) efficiency is, as the name suggests, more about the individual and how you invest those 168 hours found in every week. It includes the way you plan your time, schedule your meetings, prioritize your activities, or otherwise decide what you do with each day.
The first and most fundamental conclusion from this study is that any advisor who is seeking to improve overall efficiency needs to begin with a look at his underlying business model. If your business is not structurally efficient then it won’t matter how personally efficient you are in managing your time. You might just be putting yourself on the fast track in the wrong direction. From that point, there are a number of things that advisors can do to improve personal productivity to turbo-charge efficiency in their businesses, and we’ll look at those in more detail.
To What End?
During the course of the study, we discovered that applying specific time management techniques can have a substantial and enduring impact on the success of your business. Enter the “Efficient Advisor,” which was uncovered through cluster analysis, a process used to group survey respondents based on like behaviors. Specifically, we discovered a group of advisors who spend more time planning their business and their time, time block activities and apply structure to scheduling their time. They had attracted, on average, double the assets and revenue as their less efficient counterparts in the same time period. And while we can’t assume that was entirely due to time management, the link is evident.
These efficient advisors can be characterized as “business builders.” They invest more in their businesses and accept slightly lower profit margins, in return for substantially larger businesses. For that reason, we’ll start with a look at structural efficiency.
Delegate More, and More Often
Structural efficiency is linked to the extent to which an advisor has sufficient resources, clearly defines roles/responsibilities and delegates effectively. Not all efficient advisors have large teams, but human capital is a critical driver of efficiency. However, efficient advisors treat delegation differently, delegating a much broader range of activities to the team and sharing client management responsibilities.
The data shows a core group of activities that advisors want to delegate, however efficient advisors are more likely to delegate such things as preparing documentation for client meetings, managing workflow, and executing client communications plans.
Not surprisingly, the most successful advisors are more likely to work with a junior or associate advisor and, once again, we find that more efficient advisors leverage the skills of their team differently. For example, efficient advisors are more likely to give their junior full client management responsibility for some client relationships while less efficient advisors are more likely to leave their juniors to provide behind the scenes support.
Focus on Your Ideal Client
Next, the data highlights a link between efficiency and the extent to which an advisor has a clearly defined target client and actively applies that definition as part of the client selection process. Forty-eight percent of efficient advisors have an established minimum, compared to only 31% of less efficient advisors. Those same advisors are also more likely to focus on higher net worth clients.
Standardize Systems and Processes