Commonwealth recently contracted Cerulli Associates to conduct a survey of how our affiliated financial advisors spend their time and identify factors that drive their productivity.
The study results shed light on some interesting external factors within our community. By separating consultants by revenue management, growth rate and time spent in client meetings, we found that the top 10% of our affiliate advisors spend 37% of their time with clients compared to 24% for their peers .
So, what drives this inherent productivity? Here are five central themes that help these outside consultants operate more efficiently than their peers, along with ideas that can help free you up time to focus on what’s most important. Huh.
- strategic focus
The overall productivity of a firm starts with strategy. In our industry, it’s easy to get distracted by various opportunities because, as a successful business owner, you’re working hard to chase them.
When we spoke with these outside consultants, we realized they were laser-focused on where their businesses were headed. They are intentional about reaching their goals, and they are willing to make trade-offs. In many cases, it’s easy to say “yes” — but when determining your firm’s strategy, it’s equally important to say “no” to avoid distractions and streamline priorities.
- alignment and uniformity
As your firm grows and adds partners, it is important to ensure the alignment of all advisors and employees to build a scalable business. If everyone operates with autonomy, the firm will eventually lose economies of scale. Therefore, alignment needs to occur in both methodologies (eg, investment management and financial planning) as well as core processes (eg, client onboarding and review). Use client experience as a litmus test and ask questions such as, “Does client experience depend on which advisor they work with?”
- human capital investment
We found that outliers in the study operate with a staff-to-advisor ratio of 1.4-to-1.0, compared with their peers’ 1.0-to-1.0, which reflects how their investments in people power their growth. Is. How they get this benefit depends on the type of firm.
In the single model, external consultants have at least one highly skilled, right-handed employee and a strong tendency to delegate, allowing them to focus on client-facing activities. We have found that our affiliate consultants who hire a service consultant to expand their advisory capacity increase top-line revenue by approximately two-thirds. When adjusting for the additional expense of hiring that person, they outperform their single peers in additional revenue by 45‒50%.
Outliers operating in ensemble and enterprise models can benefit from economies of scale and develop specialized roles. As your firm grows in size, deliberately design the organization to reduce your reliance on individual partnerships. Add leadership and management functions, such as the COO and CIO, so you can oversee the day-to-day operations of critical firm functions and focus on strategy and client-facing responsibilities.
- systematization
Efficiency isn’t just one factor – it’s a holistic system designed to be a continuous investment. The outsiders I spoke to were adamant that they manage everything; This means analyzing, simplifying and documenting key processes and then using automated workflows tied to the firm’s CRM system. By creating tools like checklists and email templates, you’ll ensure that you’re not reinventing the wheel when performing repetitive tasks.
Systemization should be a concerted effort and priority of the leadership of the firm. For many firms, procedural responsibility is often delegated to members of the operations team and devolved by consultants in the firm. But the actual execution of a process extends to employees and consultants, which means everyone must prioritize it.
- scalable client model
Optimizing your time with customers doesn’t just mean spending more time with them; that means spending time with Correct Customer. When it comes to outliers, we found that they serve a higher-net-worth customer base than their peers. While these clients may require more time for advanced planning requirements and ongoing support, this additional demand is offset by the additional revenue they generate.
You can also consider using specific strategies to gain efficiency. By working with customers with similar needs and priorities, you can apply the same intellectual capital, processes, and resources to your customer base in a repeatable manner. You can be intentional about your service model to ensure that you are delivering services and resources (specifically, your time) to each customer segment in a profitable manner.
taking charge of your productivity
Increasing productivity and increasing efficiencies so you have more time with your customers doesn’t happen by accident. It takes time and constant investment to create and maintain a model that works for you and your firm. But by setting goals and focusing on the result, you too can run out of productivity. And that, in turn, can lead to greater success.
Kenton Shirk is Vice President, Practice Management Commonwealth Financial Network.
