3 things many advisors aren’t spending enough time on

By Mark Mersman

USA Financial


Recently, I interviewed Wealthnetic’s CEO, Mike Walters, regarding practice management as it relates to how financial advisors are spending their time. Mike shared the three things many advisors aren’t spending enough time on. More importantly he explained how they can begin to implement these three things to help grow their practices. Following is a transcript of our conversation:

Mersman: Mike, I know one thing that a lot of advisors — I think all of us — face to some extent is time management. And ultimately, we’ve got a certain amount of time in the day and we want to grow our practices.

So, I want you to walk through a few things some advisors struggle with as it relates to time management — what they’re spending their time on versus what they should be spending their time on — and hopefully it will be a little bit of a guide to help people look at their practice a little bit differently in what they’re doing with their time.

Walters: I mean, that’s a huge conversation. So I’ll pivot off of an article in a moment. But one of the things that I tell people when advisors who work with us come in for consulting days and so on, the quick kind of synopsis I always give them is: Everything you do, every job in your practice (whether it’s a role that you play or whether it’s a role that you have a staffer hired to play), everything has to either drive revenue or drive profits. I mean, it doesn’t matter what the role is. When the rubber hits the road, their job is to do one or both of these things.

So if you are there to gather the assets to bring the clients into the firm, you’re primarily driving revenue. If you’re there to manage the expenses, to administer the process and the flows of transactions through the business, then you're there to drive profits rather than revenues. One way or the other, that’s what the game’s about. And so from a starting point, anything you’re doing that falls outside of the realm of those two issues is something you shouldn’t spend your time your time on.

That’s stepping point number one. Stepping point number two is that people just get sideways inside their business. I mean, we run in a complex environment and it’s easy to get side-tracked — the shiny objects, as we say. You see a shiny object and immediately your attention focuses on it rather than what’s driving revenue or driving profits. And the stats that are out there are pretty mind-boggling in terms of where advisors spend their time versus where they know they should spend their time.
There's an article titled, “3 ways to find new clients more efficiently.” But when you get into the article, that’s really not what the article’s about. I think they picked a bad title. It should really be focused on where advisors are spending their time and the stuff they ought to be spending their time on. There are two graphics that are pretty telling. What they found is that with client meetings and acquisition — the stuff that makes a financial practice a practice — advisors are spending approximately 20 percent of their time there, which by definition means 80 percent of their time is being spent elsewhere. So you’re now immediately getting out of the driving revenue category. And maybe you’re still in the driving profit category, but you might be way off base as well.

On marketing of their practice, they’re spending on average of somewhere between 5 percent to 8 percent of their time. And then on compliance-related issues, they’re spending somewhere between 3 percent to 5 percent of their time.

Mersman: I think that you’re hitting on something that, even if you took it a step back, when you look at the big picture, the things that drive the revenue and the things that are the biggest challenge for advisors are getting in front of more folks and ultimately having more meetings. Also, the compliance hurdles in our complex business that we run. Those are the three biggest hurdles. And there you are. I just added that up. That’s representative of 35 percent of the average advisor’s time.

Walters: Right. Probably even less than that. And so the other fact and graph that they have in there goes to the other part of your comment, and that is: Of the things that advisors think are the biggest threats to the future of their business, the number one threat is the pressure to find new clients. The number two threat is government regulation and increased compliance. So, on threat number one, you’re only spending 20 percent of your time, maybe 25 if you want to throw in marketing. And on threat number two, you’re only spending 3 percent to 5 percent of your time. So the two biggest things that are most important in your business are things that aren’t even tallying up to 30, 35 percent of your time. The successful advisors, guys who come in on consulting and we see them and they’re going like gangbusters, it’s because they’re simply doing better time management. They’re spending more time in the areas that deserves it, rather than getting off track with all the shiny objects.

I think you need to reassess your business. I think you need to grab a sheet of paper and write it all down. Where does it fall categorically? Should I be spending time on that? And then grab that article we were just talking about, and take your own stats and facts and levy them against the industry and see where you stand.