Podcast Center
Video Center
Webcasts
Resource Center
Events
May 07, 2008 at 08:00 PM
We’ve all seen the type. The put-together super-achiever working a PDA with one hand while hailing a cab with the other, timed just right to make the next big meeting or client lunch. By the end of the day this marvel of organization still has time to hit the gym, whip up a health-conscious dinner, chat with an old friend online, catch the last quarter of the game and finish up the latest best seller before getting a good night’s sleep. Yes, I’m talking about the super-organized! It’s the person we sometimes love to hate, the person that always makes us feel like we haven’t accomplished anything all day or even all month. So how do they do it? What’s their secret? Well it could be they’ve learned the art of prioritizing. Yes, the super-organized know how to manage their time.
So how can we tie these time-saving habits to the financial world? Well, almost every investment advisor survey seems to indicate that advisors today face a daily challenge–determining the best way to allocate their time and energy. Our research also shows that many advisors are bogged down with mundane business administration tasks. As a result, they don’t spend enough time on client services–the bread and butter of any advisor business. Moreover, when asked what area of their business needs improvement, 60% of advisors said time management.
AdvisorBenchmarking research shows that the way advisors spend their time varies greatly. Some advisors devote a large amount of time to gathering assets and communicating with clients, while others spend more time managing portfolios. Most RIAs spend equal amount of time handling business issues (15%) and client service (16%). Best practice firms spend twice as much time on client service activities (32%) and significantly more time on client meetings and acquisitions (17%).
We compared the average advisory firm to the best practice firms (as defined by growth rate, profitability, and range of services) and found that top firms spend their time much differently than their peers.
How Advisors Spend Their Time (Average vs. Best Practice)
| Function | Average Practice: Time allocation/hrs per day | Best Practice: Time allocation/hrs per day |
| Client Service | 16% | 32% |
| Client Meetings and Acquisition | 10% | 17% |
| Training Employees | 4% | 12% |
| Marketing | 6% | 8% |
| Business Strategy | 3% | 8% |
| Portfolio Management | 12% | 7% |
| Research | 12% | 5% |
| Office Administration | 10% | 4% |
| Self Education | 4% | 4% |
| Business Administration | 15% | 2% |
| Back Office Operations | 8% | 1% |
Do you feel overworked?
Most advisors (43%) work between 50 and 60 hours per week. What’s surprising is that the number of hours worked has no connection at all to profitability. The takeaway here is that simply spending more time on your business doesn’t mean it will be more profitable. It’s how you spend your time that can make a profound difference in your business.
How do you find the time?
Time is a precious commodity. So how can you find more of it? Start by listing 8-20 specific activities that you do on behalf of your clients in running your business. Examples might include meetings with clients, administrative tasks, employee coaching, portfolio management, HR functions and others. Once you list these items, start putting them into the grid shown below. Which items take a lot of time, but don’t add much value? Which ones take just a short amount of time, but add a lot of value? Once your activities are in this grid, it’s easier to see which activities are more important, and which can potentially be delegated.
Outsourcing business related functions
As an entrepreneur and business owner, one of the toughest things you may struggle with is relinquishing control of a business function and admitting that sometimes outsourcing may be the best solution for your business. But that’s exactly what the most successful advisors are doing to run more effective practices.
Because many firms lack the internal expertise needed to implement regulatory changes quickly and efficiently, it’s not surprising that outsourcing has become a popular time-freeing solution. Managing operational functions in-house usually requires more resources and time than outsourcing those functions. The top three functions outsourced are tax filing (47%), bookkeeping (20%) and HR functions.
Delegation responsibilities
Another important tool in better managing your time is through task delegation. Unfortunately for many of us, this is easier said than done. Nearly a third of advisors surveyed don’t delegate meetings, and a quarter don’t delegate the management of client relationships.
