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Financial Planning > Behavioral Finance

Are Your ‘Time Saving Techniques’ Just Pushing Work Back to Clients?

By Michael E. Kitces

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Once upon a time, virtually all financial planners were actually life insurance agents or investment brokers who were compensated by selling products and perhaps gave a little financial advice on the side.

Over the past several decades, financial planning has been pushing toward becoming a recognized profession, and its practitioners as recognized professionals. At the same time, the business itself has become more complex, challenging and time-intensive, a natural by-product of shifting from the sale of products to the delivery of advice. The net result of all these trends is greater pressure than ever for financial planners to maintain high productivity levels.

In response, financial planners have sought out ways to make themselves and their firms more efficient in terms of their time—and their staff’s—and cost, such as requiring clients to come meet at the advisor’s office, or to dictate that clients must gather all their data up front and bring it fully assembled to the planner. The reality, however, is that such strategies don’t actually eliminate the work to make the planner more efficient; rather, they simply delegate the work to the clients and make it their problem instead!

While such an approach may be necessary for some business models, it’s less than ideal for many, especially firms that pride themselves on the quality of service they provide their high-net-worth clients! So what’s the alternative? Instead of just delegating work to clients, reimagine how to turn these challenge points into true value-adds for the client, or better yet use some of the emerging technology in today’s digital age to eliminate the problem entirely.

Outsourcing Travel to Clients

As financial planners have become increasingly professional, and increasingly time-constrained, traveling to client meetings becomes difficult to manage. As a result, a more and more common refrain of planners has been: “I’m a professional. I shouldn’t have to go to the homes and offices of my clients. My clients should have to come to see me, just as they do their doctors and lawyers!”

Without a doubt, the benefit of this approach is a great deal of time savings by no longer needing to travel from one client meeting to the next. But the reality is that the need for travel hasn’t been eliminated, it’s just been transferred from the planner to the client. Or viewed another way, you’ve effectively outsourced the “work” of travel to your clients.

Why does this matter? Because you haven’t really eliminated the work, you’ve just transferred it. You’ve made it your client’s problem. Yes, the good news is that you won’t have to sit in traffic, getting increasingly frustrated, on the verge of a bout of road rage by the time you get to your meeting. The bad news: instead, you’ll just put your client in that negative state of mind instead, making them sit in traffic, get increasingly frustrated, and arrive at your office on the verge of a bout of road range! And then ask them to sit in your office and try to be focused on what you’re saying while you ask them to make crucial financial life decisions! Assuming, of course, that you can get them to take the meeting with you in the first place; how many client meetings are delayed, cancelled, or rescheduled because the client simply didn’t want to do the “work” of driving to your office in the first place?

Outsourcing Data Gathering to Clients

In a similar manner, in financial planning we also have a tendency to outsource the data gathering process to clients, in an effort to make ourselves more efficient. Just as with the process of outsourcing travel, we have our justifications, like “if the client doesn’t want to put in the time to gather data together and give it to me, the client couldn’t have been that serious about financial planning, anyway”—even though the reality is that for some clients, helping them to progress through the stages of change to take their financial challenges more seriously is part of the key value proposition for being a good financial planner in the first place!

And unfortunately, just as with outsourcing travel to clients, outsourcing data gathering leads to similar dysfunctions in the planning relationship. Again, the reality is that the work isn’t eliminated when we tell clients they have to gather all their data details up front and give them to us. We just make it the client’s problem instead! And what happens as a result? Clients delay their financial planning meetings and getting through the process because they don’t feel they have the time to do the “homework” we’ve given them up front, for which we often blame the client as though it’s their fault!

In the second part of our post, we’ll look into whether all of this is good efficiency or just really bad service. We’ll also look into alternatives to client outsourcing.

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