A Time-Tracking Exercise for Advisors
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives
There’s no shortage of apps, self-help books and life coaches that swear they can increase our productivity and profitability. But they start in the same place: by assessing your current productivity. Assessing your time usage is remarkably easy, and the essential first step to a more effective workday.
In today’s article, we want to talk about time – specifically, three time related questions:
- How do you want to spend your time?
- How are you actually spending your time?
- How can you spend more time doing what you want?
How do you want to spend your time?
Financial advisors typically spend their days meeting with clients, handling administrative tasks, creating financial plans and, when time allows, finding new clients. If you had to list these tasks out in order of importance to the health and preservation of your firm, what would you say?
Most advisors would probably list them as follows:
- Meeting with clients
- Handling administrative tasks (i.e., everything from rebalancing portfolios to reporting to billing)
- Creating financial plans
- Finding new clients
Every task is of equal importance, right? If you’re not meeting with clients, then your clients aren’t happy. If you’re not managing investments, then client portfolios are getting out of whack (or the SEC is coming after you, or client reports aren’t going out on time, etc.).
And so on.
But just because all these tasks are of equal importance doesn’t mean you enjoy them equally. Advisors reportedly say the most satisfying part of their jobs is meeting with clients.
In contrast, if you asked a roomful of advisors what their least favorite part of the job is, you will get a variety of answers, but most tasks would likely fall under the umbrella of administrative tasks, such as compliance, legal red tape, billing, reporting, etc.
Most advisors would like to spend the majority of their time meeting with and advising clients. And that’s great, because that’s what keeps clients happy.
In a study conducted by the MIT AgeLab, researchers looked at nearly 600 online reviews of financial advisors to determine what clients valued the most. Personalization was the single most frequently cited attribute, while expertise and empathy came in close behind. Your clients want that time with you as much as you want time with them.
Of course, if you’re just starting out and don’t have a full roster of clients, you probably have a little more time to devote to finding new clients through marketing and networking.
How do you actually spend your time?
Where you want to spend your time and where you do spend your time don’t overlap as much as you’d like.
Advisors spend much of their day working on bureaucratic tasks, like compliance reports, updating client records, processing trades and recordkeeping. Manually rebalancing a single client household might take upwards of 20 minutes, which becomes virtually a full-time job once you reach hundreds of client households per quarter. While some advisors pay someone to handle data entry, you still need to closely monitor the process.
According to the FPA’s 2014 Report on Time Management and Advisor Productivity, administrative requirements are one of the largest obstacles to effective time management (second only to “too much work,” which probably has a lot to do with administrative tasks).
How can you spend more time doing what you want?
As I mentioned earlier, any efforts to improve your productivity and job satisfaction need to begin with an honest assessment of how you and your team are spending time.
A time-tracking exercise for advisors
It’s time to take an honest look at your time management over the course of a week. Our firm created a Google Sheet you can use, or if you prefer to use software, there are plenty of time tracking tools out there like Toggl or HoursTracker®. Take a week to record the amount of time you spend accomplishing various tasks.
Free Download: Time Tracking Exercise Worksheet
I’ve found that good old pen and paper is especially helpful when tracking time, so you can download an Excel version of our time tracking worksheet with the link above.
Every task an advisor does falls into one of three categories:
- Administrative– i.e., trading, rebalancing, billing, reporting, compliance, data entry, or other back-office tasks.
- Client Relationship– i.e., meeting with, communicating, or presenting to existing clients.
- Growth– i.e., reaching out to referrals, networking, prospecting, or other marketing efforts geared toward building your book of business.
When you begin a task, write it down on the sheet and mark its category. At the end of the week, add up the amount of time you spent in each category.
Where are you spending your time?
There’s no right or wrong amount of time to spend on different categories of tasks, so I can’t prescribe a particular formula for what results are positive or negative. That’s up to you.
But after you do this task, look at how much of your time you’re spending on keeping clients happy and growing your firm, versus how much time you’re spending managing back-office tasks. Are you happy with the balance?
The bottom line
If you’re like most advisors, you’ll find that you are spending more time than you want to on your back office. If that’s true for you, it’s time to look into solutions.
It’s impossible to outsource client meetings. No one can take client tasks off your plate for you, and you probably wouldn’t want them to anyway. Growth tasks can be marginally outsourced with advances in digital marketing automation.
The category that can be fully outsourced is your administrative tasks, which tend to be the least favorite job of advisors everywhere. Several options are available for outsourcing these jobs, and they come with varying degrees of technology, reliability and professionalism.
Rich Conley is executive vice president of Sawtooth Solutions, a Minnesota-based provider of solutions for investment management, trade execution and online reporting.
