I figure it is never too late to start treating your practice like a business. Just focusing on a few key activities can produce huge returns.
Struggling advisors tend to go with the flow and not have a structure to their most important asset: their time with clients. The multimillion-dollar advisor knows being in front of clients is the top indicator of annual production. Successful advisors have a systematic, structured activity plan and stick to the plan.
Time is our inventory—our most important asset.
Just the way an auto manufacturer knows the more efficient its process, the more profitable it will be—the same applies to us. We think of our business as very high-touch, high-service manufacturing. My time, and the team’s time, is our inventory and our most important asset. It must be managed effectively to make the business more efficient and profitable. The team clearly understands that the more time I spend in front of clients, the more profitable the business will be and the larger their bonuses.
When it comes to putting numbers to this concept, we keep it simple. The issue for us is how many first meetings do we have with targeted “A” prospects/clients per month? I know if we meet with three of them per month, we will meet our annual goals.
I don’t bother to track second, third and fourth meetings because when you treat this like manufacturing, the most important thing is what is coming into the pipeline. If you have enough raw materials going in at the front of the pipeline, you will get cars, or in our case, happy, satisfied clients coming out the other end.
Right now, I am the only advisor who can meet alone with clients. This will change over the next year as we have three advisors in training. I am the only one whose primary tasks are prospecting, meeting with clients and securing the relationship. Everything else in the business is delegated to our ace team.
I am spending about 75–85% of my time face to face with clients. Our COO came to me recently and said: How do we get you up to 95%? He clearly understood if I could spend 10% more time with clients, the revenue would be up 10% and everyone’s bonus would also be up.
Here are some of the metrics, or Key Performance Indicators (KPIs), we track to insure my activities effectively manage our inventory and meet our goals:
First meetings, A and B. How many first meetings with prospects, As or Bs, do we have on the calendar per month?
Our goal is three per month. If we meet this goal, we will make our revenue and bonus goals. Everyone on the team knows this goal and they are all tasked with helping to get these meetings on the books.
We color code these meetings on the book, so at a glance I can see how many we have on the calendar.
First meetings, C. How many new C first meetings do we hold per month?
My goal is to limit these to two per month. We could do more, but neither the staff nor I have the time for them at this stage. As I am writing this, we are not yet halfway through the year, and we already have picked up 105% of our goal for C clients this year.
Time per meeting. How long does a first meeting take?
For an A or B client, I usually allow two hours, but sometimes it can take an hour and a half. In a perfect world, I get 15 minutes between clients to do my dictation and debrief with a client service manager.
For C clients, we allow an hour and a half, but usually finish in an hour.
Meetings per day. How many meetings do we have most days?
I divide these into two categories: on-boarding new clients and maintaining existing happy relationships. On-boarding takes much more prep for me and the team. As a result, we try to limit these to an average of four per day. Maintaining existing clients through review meetings takes less time. We can do up to two of these per day, if we have four on-boarding meetings. Otherwise we can do up to six per day. Any more than this and both the team and I are toast.
What percentage of your time spent is in front of clients? I have seen many advisors only spend about 35% of their time in front of clients. Some even less. My question to them was simple: How would you like to double your income? Then try to spend 70% of your time in face-to-face meetings!
What I Don’t Do
When it comes to managing our most precious resource, time face-to-face with clients, what I don’t do is as important as what I do. Here are nine time wasters I avoid:
I don’t go to industry meetings unless I am a speaker or need CE credits. I have heard about 80% of this before and it is not a good or profitable use of my time at this stage. (Note, if I were just starting out and didn’t have my date book filled up, I would be attending meetings.)
I still answer my own email, which is not prospecting, meeting and securing. However I have spent the last three months unsubscribing myself from various vendors and publications and that has reduced the amount of time I need to spend in that category. Side note: One of the biggest problems with spam in my in-box is my broker-dealer selling our name to vendors. This was yet another reason why I left broker-dealer world.
I rarely go out to lunch. I usually bring my lunch. This saves calories, money and time.
All of my phone calls at the office go to a client service manager. I don’t answer my own phone, because 95 times out of a 100, someone on the team can handle the problem; if not, then I personally get back to the client.
I don’t send meeting follow-up emails to clients. I let our client service managers do that. They also send out meeting reminders.
I don’t keep re-evaluating intermediaries, such as our broker’s general agent for our life insurance business. I tested out five different firms in this category. Four of them were a complete bust, so I found one I love, and I am will be with them until they fire me or they carry me out feet first. Ditto with investment managers and other providers. We find good ones and stick with them.
I don’t read industry publications. Yes, this is embarrassing, but once again, I know a lot of this information, particularly how to run a successful practice, and the latest technical ideas I pick up during CE training.
I don’t evaluate new technology. Our COO is really good at this. I let him do the advance research and then tee me up to make the final decision.
I don’t spend much time with strategic partners. Most of these have not worked out for us—we tend to send them a lot of business and they either don’t appreciate it or do not see fit to send business back to us. We evaluate these relationships periodically to make sure we are spending our time on what is working.
Think about your time as your inventory. If you start managing it the way manufacturers manage their inventory, you will create a bigger, more profitable practice.