(Graphic: Michael Kitces) (Graphic: Michael Kitces)

Technology has been touted as the best way for financial advisors to minimize time spent on busy work and maximize time spent with clients. But according to research just released by popular advisor and blogger Michael Kitces, this prediction is not coming true.

Even with the latest technological innovation, most advisors spend less than 20% of their time in client meetings and just 50% on direct client activity. Plus, the average advisor spends roughly the same amount of time trying to add a new client as on meeting with existing clients on a weekly basis.

“Despite the idea that financial advising is primarily about meeting with clients to give them financial advice, our research suggests that most financial advisors are still heavily burdened with the tasks of also running an advisory business, and handling the rest of the behind-the-scenes tasks that an advisor must do to support his/her clients,” according to Kitces, publisher of the Nerd’s Eye View blog, which conducted the Kitces Research study.

In terms of platforms, this technology seems to have room for improvement when it comes to boosting FA productivity and reducing back-office and administrative tasks — which still require up to one-third of the average advisor’s work week. Concerning investment management, though, Kitces Research finds only 11% of advisor time spent on this activity.

What’s eating up advisors’ schedules? Getting the required information and materials ready for client meetings, as well as handling related client service and administrative tasks.

With so much of an advisor’s time not spent directly on client activities and most client-related tasks being “back office” in nature (like client servicing, meeting preparation and analyses), there seems to be “room for a significant increase in advisor efficiency, either through delegation to staff, better technology or both,” Kitces says.

Exactly how do advisors spend their time each week? Close to 9 hours is used for client meetings, about 5.5 hours on preparation work for these meetings, more than 6.5 hours on the related financial planning, investment and other analytical work (such as answering client questions), and 6 hours of follow-up tasks tied to client servicing.

In total, the average advisor spends nearly 27 hours on these direct client activities each week.

The Kitces Research survey of nearly 1,050 FAs also finds sharp differences in advisors’ time use by industry channel. For instance, advisors in commission-based models spend just 10 to 11 hours a year directly working on each client’s accounts versus almost 17 hours for those in fee-oriented models.

“While recent industry debates have focused on the impact of commissions versus fees in potential conflicts of interest in the recommendations made to clients, our research shows that the advisor’s compensation model has a much broader influence on how an advisor spends their time across the business,” Kitces explained.

“Recurring-revenue fee-based models spend nearly 60% more time with each client in a year than commission-based models, in large part due to the time that is freed up by not needing to spend as much time continuously seeking out new clients instead,” he added.

Looking at the impact of hiring associate advisors and paraplanners, the study finds little positive change on client-facing activities. Instead, advisors adding staff generally split time spent on client support and servicing with these employees, which improves their average client capacity by 64% (to 120 clients) and their average net take-home pay by 80%.

— Related on ThinkAdvisor: