Time Management: The Key to Boosting Revenue

Just eyeballing these, you can see that the larger the asset base the more time spent with clients.

I did a bit of mathematics on this table. I assumed a 40-hour work week. I converted the Cerulli percentages to hours. Then I calculated some subtotals.

As you move past $100M to the $250M-$500M category, time spent with clients and prospects increases about 50%. But gross revenue, based on a percentage of AUM, would go up anywhere from 100% to 250%. It’s called leverage. The principle of the $1,000 hour is true. It just grows exponentially.

My primary conclusion was and is: Gross revenue is increased by spending more time meeting with more and better clients and prospects. Time is the critical variable.

The conclusion I draw from the Cerulli Associates study is most certainly not that as your business grows you have to spend more time with clients and prospects.

It is precisely the opposite: You get there from here by spending more time.

The $500M to $1B Anomaly

I’m fascinated with the numbers for the $500M to $1B category. My guess is that as a financial advisor grows from $500M toward $1B, the entire structure of the organization has to change. By the time the practice moves past $500M, there should undoubtedly be several relationship managers. So the primary FA spends less time with clients. But they’re spending more time in preparation. As the practice moves on to $1B, time spent in “client meeting and plan preparation” drops. That’s probably because team members have been added for meeting preparation.

Time Allocation

The Cerulli study provides some tremendously interesting insight on how one’s “model day” might evolve. Let’s assume you have less than $100M in assets. Using the “Model Day Worksheet,” I would try to configure my model day as if I had $100M.  Build the model day for your next level. This is all based upon that profound philosophical principle, “build it and they will come.”

I first got an inkling of the idea that you have to “build it first” when a client of mine — Keith Vanderveen, then with Merrill Lynch, now a regional president with Wells Fargo, was on an incredible roll in the early 1990s. He sailed past $1M in gross revenue and immediately built the team that would support $2M.

But the team is only one of the many drivers that will take you from one level to the next. It is clear from the Cerulli Associates study that time allocation changes one level to the next. As part of your planning for 2012, my very strongest recommendation is: Figure out how to make your model day match that of your next level.

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Bill Good is chairman of Bill Good Marketing. His Gorilla CRM^® System helps advisors double their production or work half as much; visit www.billgood.com. His seminar program, “No More Pies! ^®,” helps advisors manage ETF portfolios using technical analysis; see www.nomorepies.net. And his blog, financialadvisorsmarketing.net, has lots of useful information for advisors who need to beef up marketing. To preview Bill as a speaker, see his YouTube channel here: bit.ly/billgoodspeaker.