At its core, the wealth management business is a relationship business. Finding, building and maintaining relationships takes time. But the one resource universally in short supply is time. Putting aside for a moment technical proficiency and interpersonal skills, time may be the single most important resource needed to succeed in the wealth management business. And the efficient allocation of that limited time towards client facing activities will likely decide the winners and the losers.
Schwab and Moss Adams published a fantastic benchmarking study in 20071 that identifies where advisors spend their time. As the table below illustrates, advisors are spending their time on a considerable amount of non-client facing activities. Most firms spend less than 50% of the time in front of new or existing clients. The best firms spend about 55% of the time with clients.
And while most advisors got into the business to work directly with clients to help them achieve their personal and professional goals, it might be disappointing to realize that only 35% of time is spent with existing clients. The remaining 10-15% is spent trying to find new clients to help – a number that may be too little to make a difference when trying to build a practice that will support you.
Imagine what you could do if 45-55% of your time was reallocated to activities with new and existing clients! This circumstance was traditionally the argument for folding under the umbrella of a larger organization that could offer dedicated resources to non-client facing activities. By freeing the advisor of those responsibilities, the advisor could boost the time allocated to client facing activities.
But independent advisors are independent for a reason! They want the flexibility and control to care for clients the way they think most appropriate. Many have left large organizations that stifled their ability to serve clients. So now imagine the impact of a relationship with a firm like Pinnacle Advisor Solutions, which provides core solutions for investment management, client service operations, technology and compliance to independent RIAs. Now the math changes dramatically.
Assuming there are 2060 hours in a year per the study (52 weeks at ~40 hours per week), that represents an additional 565 hours per year that can be allocated to client relationships, to new business development, or to lifestyle.
Over the years, advisors who work with Pinnacle Advisor Solutions have seen an increase in the time they spend working directly with their clients, focusing on the relationships that first attracted them to the business. Please feel free to contact us to learn more about how our solutions can help you.
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1 Best-Managed Firms: It’s About Time Time Management and Organizational Effectiveness Moss Adams LLP 2007