By Lisa Brignoni, CFA

What is the one thing, besides clients, that financial advisors want more of? As one advisor from Wexford, PA put it, “Of course, who doesn’t want more time?” As the heptathletes of the wealth management industry, advisors, who often come from various educational backgrounds, have to excel at a wide variety of skill sets in this multi-disciplined profession. Switching hats from financial analyst to business manager to client counselor can be a challenge even for the most seasoned and organized advisor. Implementing a strategy to prioritize time in a way that unleashes the most value is a critical factor for success in a financial advisor’s practice.

Clearnomics is the Market Insights Platform for financial advisors, planners, and wealth managers. Click here to learn more:

Don’t Just Manage Your Time – Prioritize It

So why is time prioritization so important to advisors and not just another soft skill that can wait until another day to be addressed? Well, in this case, time really is money.

1. The wealth management industry is changing fast. Advisors need to be prepared to adjust with it. Whether it’s due to the looming deadline of the DOL Fiduciary Rule1 or disruption from automated investment guidance, the traditional advisor business model will not be sufficient to address the changing needs of consumers. The DOL Rule and market entry of roboadvisors are shining a new light on fees paid to manage investments and clients are questioning the value they get from their current advisors. With this increased scrutiny from clients, advisors need to communicate their value by highlighting their greatest advantage over the robo-advisors – their personal connection. In addition to a smart strategy for navigating client conversations with expert ease, advisors of course need to dedicate more time to these conversations.

2. There are still many who need expert financial guidance. According to a 2015 CFP® survey,2 40% of consumers used a financial advisor citing a need for financial guidance. This still leaves a substantial pool of potential clients that are in need of guidance and a large opportunity for the advisors that are positioned rapidly bring on new clients. Specifically, Gen X and Y investors are expected to accumulate $46 trillion3 in assets over the coming decades. Being able to meet this demand means competing with robo-advisors and starting with a scalable, efficient operation is critical to success.

3. Transitions from retiring advisors are ramping up. The average age of a financial advisor is over 50 and many have succession planning on the mind. Whether this means selling a book to a larger firm or internally expanding the practice, the opportunity is there for younger advisors who have the capacity to take on more clients.

4. Work-life balance. Finally, let’s not the discount the spillover benefits of professional time prioritization into one’s personal life. Conquering the world in six hours instead of eight leaves you well rested to repeat that success day after day.

A Time Prioritization Framework

Now that we’ve laid out the reasons why time prioritization is critical for a financial advisor’s practice, the next question is: how do advisors prioritize time in a way that addresses these challenges. We always say we need to prioritize, but with the lack of a practical framework, it’s difficult to make this a maintainable and working solution. The first step is to categorize all of your tasks as an advisor into buckets that employ common skillsets and serve distinct purposes: practice management, portfolio management, client servicing and client acquisition.

Practice Management

Practice management broadly contains all of the tasks that keep the operation of the business running smoothly – compliance, paying the bills, hiring and training staff and managing technology amongst other things. For advisors, these tasks are more a fact of life rather than the reason they decided to pursue this profession.

When determining the appropriate amount of time to dedicate to this part of the job, it’s helpful to consider your career stage as an advisor. At the beginning, practice management should be your sole focus – setting up the business model that will work best for you and ensuring all of the tools and resources are in place so that they require minimal attention directly from you as you progress in your career. Towards the end of your career, practice management once again takes center stage in the form of succession planning.4 An easy way to visualize this would be an inverted bell curve.


Source: Clearnomics

Portfolio Management

For better or worse, the investment side of this profession tends to be the most glamorous side and as such, gets the lion’s share of the attention from clients. Naturally, it’s what many of them want to discuss with their advisors. But as many advisors already know, the time, resources and expertise needed to properly manage a client’s investments requires the involvement of additional experienced individuals.

If you’re part of a larger advisor team, you likely have access to an investment strategist or team of strategists dedicated to managing client portfolios. Your portfolio management duties should be trimmed down to staying abreast of market outlooks and long-term investing trends in anticipation of client questions.
If you’re a solo advisor, it’s critical to invest time upfront to determine your strategies and what resources will be needed to run them in a way that’s scalable. Reviewing your business model to determine what kind of clients you want to target can guide you through these decisions. For example, if you envision servicing a small number of high net worth clients, you’ll likely require additional investment-focused personnel and advanced resources. If you’re envisioning a mass market audience, being able to handle higher trading volumes becomes a priority.

Subscribe to the Clearnomics Newsletter Now!

Client Servicing and Acquisition

Last and certainly not least, client servicing and acquisition. If you have the official title of financial advisor you know, relative to practice and portfolio management, that these are the two areas where you should be dedicating the majority of your time and expertise. But how do you prioritize between acquiring new clients and servicing existing ones? According to a Natixis survey,5 78 percent of advisors believed they would need to acquire new clients to grow AUM. 77 percent also believed they would need to gain a larger share of wallet from their existing clients to grow AUM. Clearly, the level of importance between these two competing tasks is equally important for financial advisors so it comes down to each individual’s strengths.

To determine a sustainable work balance between the two areas, we go back to the economic principle of comparative advantages. Your trading partners in this case being other professionals you can hire and technology you can implement to optimize your time. So start with where you can provide the greatest value to your growing practice with your particular set of skills (take it from Liam6, it’s important to focus on this). Is it forecasting cash flows for different life scenarios, discussing market trends with clients, or connecting with potential leads at networking events? This is the area where you want to be clocking the majority of your time. In the areas where you’re less engaged, focus on alternative solutions. If you don’t enjoy cash flow forecasting, upgrade to an intuitive and comprehensive financial planning software. Networking not your strong suit, hire someone to implement an inbound marketing strategy. Thanks to the explosive growth in fintech, a lot of attention is being paid to creating solutions for financial advisors.

How do you stack up?

Recognizing the importance of time prioritization and knowing what areas you should be prioritizing are the easiest parts. But just as you’ve probably told clients, making a budget but not sticking to it, will not help them achieve their goals. You need a way to measure your actions. In the case of managing time, the majority of tools and resources focus on increasing productivity7 for day-to-day tasks rather than actually measuring time spent on those tasks. You can track your time in a spreadsheet or opt for a free app:

  • RescueTime8 works in the background to track what programs and apps you’re using and provides detailed reports on activity. The advantage of this program is that it tracks your activity in the background. The biggest drawback though is that it cannot track time spent offline meeting with clients or attending events.
  • 30/309 is a task manager that allows you to assign and complete tasks within 30 minutes and then take a break. This allows you to track and measure your tasks by the four categories mentioned above and proactively choose how you’re going to spend your day.

Once you have a baseline for how you’re actually spending your time, you’ll be able to see where you need to make adjustments either by upgrading your technology solutions, outsourcing tasks or blocking distractions. For example, a time distribution that skews more toward portfolio management than client acquisition may require your attention to redirect your focus. Or an overweight to client servicing when your greatest strength is prospecting may mean you need to upgrade your software or hire a financial planner.

One thing is certain: as a financial advisor, you have to be and provide a lot of things to your clients. You have to provide personalized plans and be scalable and efficient. You have to be a market expert and provide goals-based planning. You have to creatively market your practice and optimize your operations. Thankfully, in the quickly evolving world of fintech, the time and resources are there to help you.

Additional Resources

1. http://www.dolfiduciaryrule.com
2. http://www.cfp.net/docs/default-source/news-events—research-facts-figures/2015-consumer-opinion-survey.pdf
3. http://www.ey.com/Publication/vwLUAssets/EY-the-next-generation-of-financial-advisors/$FILE/EY-the-next-generation-of-financial-advisors.pdf
4. https://finaeo.com/2016/07/22/the-financial-advisors-ultimate-cheat-sheet-to-succession-planning
5. http://durableportfolios.com/docs/304/306/2016%20Global%20Survey%20of%20Financial%20Advisors_whitepaper_Final.pdf
6. http://www.esquire.com/entertainment/movies/a31775/taken-speech/ – humor link
7. http://www.yesware.com/blog/time-management-apps – time management
8. https://www.rescuetime.com
9. http://3030.binaryhammer.com

References to any specific products, services, or companies is for the information and convenience of our readers, and does not constitute an endorsement or recommendation by Clearnomics.