This is the first in a series of blogs in which Edden Kift (as my co-author) and I will unpack and examine some common areas of practice management that financial advisers, who are often also business owners, need to act on as they work to build a leading financial advice practice and provide outstanding service to clients.
If you stand still in any business, the likelihood is you are already moving backwards. Implementing regular, small improvements results in steady, measurable progress towards achieving goals.
One of the most rewarding aspects of working with advisers is being able to assist them to improve how they work, to ultimately extract greater value from their businesses. This applies equally to business owners and advisers operating within a practice. Extracting value comes in different guises, some of which may include:
- a sense that clients trust their adviser because there is a value proposition supported by a process that enhances the customer experience
- having clients who have peace of mind because they understand their financial situations
- the realisation that it’s less about the money and more about people
- having a profitable business that is operationally sound and sustainable and will be attractive to future potential owners, which will afford the business owner the opportunity to exit the business financially sound and with their clients well looked after
Understanding the pain points
Our conversations with advisers often revolve around not only understanding what drives them but also what keeps them awake at night; the pain points they experience. Figuratively, it means holding up a mirror in which they take a good, hard look at themselves and the way they operate.
It may have become an eye-rolling cliché, but “working on a business” is just as crucial as “working in a business”; there is no getting away from it, it can be hard and takes discipline. It is usually not urgent, but it is crucial and the best advice businesses we have seen over the years all fundamentally understand this and deliberately act on it.
Because being an adviser and running a business are two distinctly separate functions, the key is to know and understand which hat you are wearing at any point in time, and then to devote appropriate amounts of time and resources to each.
In 2019, Michael Kitces conducted research into How Do Financial Advisors Actually Spend Their Time And The Limitations Of Productivity? His findings revealed that the typical adviser spends no more than about 50% of their time on direct client activity-related tasks and barely 20% of their time meeting with clients. He goes on to suggest that there is room for a significant increase in adviser efficiency.
How then to set aside time to ‘work on the business’?
Here we consider some approaches to time management that we have observed over our time working within the profession.
- Time Blocking: Cal Newport, author of Deep Work: Rules for Focused Success in a Distracted World, is a big proponent of time blocking.
- Quite simply this is the concept of allocating blocks of time in your work week which are dedicated to different things, ranging from ‘Deep Work’ such as client financial plans, client meetings, practice management and business strategy, to ‘Shallow Work’ such as company administration or processing client applications.
- As an example, you may use Mondays for administration and preparation for the week ahead, Tuesday, Wednesday and Thursday mornings for client meetings and planning work, with afternoons for follow-up tasks and administration, and Fridays kept specifically for business strategy and planning and practice management.
- For more on this, click here
- Meeting Surges: This is a concept espoused by Matthew Jarvis of ‘The Perfect RIA’ podcast and has also been explained in detail on the com blog.
- The meeting surge process can offer advisers more flexibility to balance their client meetings with other aspects of their businesses by systematising and streamlining the client meeting process, freeing up more time throughout the year.
- This will be different for everyone, but as an example, it might mean allocating 10 working days per month in one or two chunks to only client and prospect meetings in order to free up time and headspace the rest of the month for working on client plans, developing business strategy and taking care of administration.
- One adviser partner we work with implemented a version of this approach in their business. They now alternate between a week of meetings and a week of no-meetings and stick rigidly to this, and they have found it revolutionary.
- Learn more by listening to episode 77 of The Perfect RIA podcast or reading this article
- A Day of Two Halves: A final and simpler approach (but arguably less effective) may be to simply say that mornings are allocated to meetings and afternoons are for ‘everything else’, with a specific half-day set aside for practice management and business strategy each week.
Experiment with different approaches and find what works for you and your team. The key to making this work is discipline. Some are able to set aside the time and stick to it, while others will need to be kept accountable, which is where you may consider pulling in external resources such as business coaches and mentors or specific specialist practice management consultants to keep you on track.
If you are interested in participating in a series of calls where we will discuss the topics contained in this blog in more detail, and are willing to share your experiences with peers who are at different stages of their journey as a business, then please register your interest by emailing mark.bradley@portfoliometrix.com.
