How to Put Aside Roles that You Really Don’t Want

If this sounds familiar, I’ve compiled a list of three questions to help you decide if now is the time to refocus how you’re running your business and your life.

1. Where does your passion fall and how can support staff help you focus on it?

According to a Financial Planning Association survey, more than half of surveyed advisors feel they cannot control both their time and their businesses. The survey identified the biggest threats to effective time management as:

• trying to do too much in a day (35%); and
• handling administrative requirements (31%).

Do you find yourself efacing this issue? You likely need support and a team to help run your business more efficiently and effectively. Start by making a list of tasks that are part of your routine and then identify which ones you could delegate. This will free up your time while giving others valuable new experience, and helps determine your hiring needs.

A reliable office manager can help you streamline your processes and create efficiencies in your back-office practices. They can hire and manage staff, design and develop work flows, make sure compliance requirements are met, implement technology, manage the budget, among other tasks. Not only will this take some work off of your plate, but will result in an enhanced client experience.

2. How can you outsource tasks to be more cost efficient?

Cerulli Associates recently found that independent advisors spend nearly 25% of their time on administrative operations versus revenue-generating tasks. Ask yourself how much your time is worth. A simple process calculate your average hourly value. Simply divide your total revenue for the year by the number of hours you worked in the year.

For example, if your annual net income is $500,000, and you worked roughly 2,000 hours (50 weeks at 40 hours per week), your average hourly value would be $250 an hour. If your time is worth $250 an hour, do you think its best used chasing down that ACT or updating client email addresses? Most likely, another employee could be handling that.

Fee pressures are another important consideration. What if in the next five years, you will need to manage twice the number of accounts simply to maintain your current revenue flow? That could happen as your annual expenses go up while your average fees go down. If you’re managing 200 client accounts today, how will you be able to manage 400 accounts in five years? The answer is intrinsically tied to how you spend your time.

If building client relationships and focusing on services like financial planning are more your passion, you may want to work with a third-party money manager to outsource your investment management function.

Third-party money managers can take on a variety of investment-related activities from researching investments and determining asset allocation to trading, rebalancing, and reporting. It’s not uncommon to see some investment management functions partially outsourced. For example, if you serve as the chair of an investment committee that sets investment objectives and selects money managers, consider outsourcing the day-to-day responsibilities of portfolio management like investment research and security selection.

3. How can your practice become more productive by leveraging technology?

As you review the administrative functions you’re performing and how these tasks have changed over the years, consider not only what will free up your time, but also may be done better through outsourcing. With the right systems in place, technology can help you make the most of your time and regain control of your business.

Recent innovations in financial technology have provided a variety of tools to handle everything from relationship management to investment modeling and document production. According to a study from RIA in a Box, RIAs using at least two technology systems can achieve faster growth in assets under management without increasing staff. These solutions perform back-office operations like billing and record-keeping, which frees up more time for you to connect with clients and prospects.

Begin by mapping out the operational process of your business in detail and include tasks like client onboarding, account opening, portfolio management, and client meetings. Then, you can determine areas where technology can transform your workflow in ways that will increase efficiency, simplify compliance, and provide a consistent, repeatable process for your staff.

Rekindle your passion

As an independent financial advisor and a business owner, you have the freedom of running your own practice, managing it as you choose and making the decisions. But don’t get trapped in frustrating roles that can be handled more efficiently by someone else. Taking the time to re-organize the roles and responsibilities in your practice can enable you to regain control of your life and rekindle your passion.

Joshua Pace is president of TCA by E*TRADE.

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