Was Otis Redding singing about your advisory practice?

A lazy summer day. Good company and a cold beverage. No agenda, with the mellow sounds of Otis drifting over a light breeze:

“I’m sittin’ on the dock of the bay
Watching the tide roll away
Ooo, I’m just sittin’ on the dock of the bay
Wastin’ time.”

Financial advisor time management

Relaxing, sun-filled days can be a great way to step away from your thriving financial advisory business. Countless hours focused on taking care of clients and growing your funnel add up.

But do those hours stack up the way you thought?

What if I told you some of your time isn’t as productive as you might think? That’s not really earth-shattering news. But when was the last time you actually tracked your activities to evaluate those yielding the strongest return? Is your time driving the revenue it should?

If time is money, then all the hours you put in at the office must mean you have loads of new clients showing up everyday with bags of money and your business bank account is overflowing like a spring river.

No? Watching the tide roll away instead?

Think about how you divide your time at work. Is the majority of your activity tied to revenue-generating client service? Or are there more low-value time vacuums than you would’ve guessed?

For financial advisors, firm performance goes beyond total firm AUM, number of clients on the roster, and client/advisor ratio. These metrics don’t address true results, nor do they take into account the dynamic nature of the business.

Minutes add up, and time is a fixed resource.

Advisors I know don’t simply show up to the office on Monday and leave on Friday having spent 40 solid hours with clients in between.  If you’re like the typical advisor, you’re spending time managing technology (see Are You An Advisor Or IT Specialist?), meeting with staff, drafting marketing materials, reading various news articles, and so on.

While all of these tasks may be somewhat important or even necessary, the fact remains that time is a fixed resource and some of your resources are being diverted to non-revenue generating streams.

It pays to closely, purposefully control the flow of your time.

So how do you become better informed, more cognizant of these time leaks?  Simply adding up the number of tasks performed for clients falls short – that’s still only part of the whole story. You need to know what kind of tasks were performed and the amount of time required to complete them. Processing account withdrawal requests might take a few minutes while preparing a complete college tuition financing scenario might take several hours. The two tasks look identical on a task list, but they’re dramatically different in reality.

Neither can you simply count the number and duration of meetings on your calendar. That doesn’t take into account the time you spend both before and after each meeting working on materials and following up on to-dos.

Capturing and analyzing metrics on time spent servicing clients is critical to the long-term success of your firm. This is the way you determine how much staff time is required to complete a task or process, identify your firm’s capacity for additional service (or lack thereof), and determine ideal client relationships.

Information can help put you back in control of your day.

So how are you monitoring this metric? Do you enter time spent on tasks into your CRM or an Excel spreadsheet? Do you have a program that tracks your computer activity? Do you write hours and minutes down on a sticky note?  Maybe you use time sheets and phone logs.

If you don’t already have a process for tracking your time, try this one:

  1. Record your time using a tool or simple spreadsheet and a timer app for at least two weeks. Discover any black holes or time sucks you didn’t realize were there?
  2. Mark each activity as VA (directly adding value to a client and creating/maintaining revenue), LV (low value or indirect value creating activities), or NV (activities that don’t add any value or revenue opportunities).
  3. At the end of the two week period, add up the hours categorized as VA, LV, or NV. Then systematically remove, reduce, outsource, or restructure/streamline everything tagged as NV and most of the things labeled as LV (all would be best, but let’s be realistic).
  4. Rinse and repeat.

Maybe you’re already doing something like this. If so, I’m anxious to read your views and suggestions in the comments below.  There’s money to be earned doing good work for clients, and I trust you can reclaim more of your day to do just that.

Bill is a CFP® professional and is a technology consultant to financial advisors. He writes the monthly technology column for Morningstar Advisor, provides technology commentary for the Journal of Financial Planning, and blogs at his own website, FPPad.com