Succeeding in the financial advising industry requires a unique combination of skills. You have to be analytical, rational and unflappable to develop and maintain investment strategies, but you also have to be warm, understanding and personable to manage your clients. You need the mind of a financier and the charisma of a salesman.
Successful advisors often eventually start their own firms when they feel time is right. While that’s great in theory, it also means you have to add a few more skills to your character sheet. You need to be able to build a team, manage people, train new hires, run an office, handle disputes and assume a hundred other responsibilities on top of your already-heavy workload.
After a while, you’ll ideally have a staff you can trust to take over a lot of those responsibilities so you can spend more time doing what you do best. It can be tempting to leave everything else on autopilot while you continue to build your book, especially after your firm’s hectic first years. But managing the business is important—and only you can do it.
How Much Time Advisors Spend on Business Management
In spite of the ostensibly heavy burden of business management, a survey by Kitces Research found that business management activities actually take up a relatively small amount of the typical financial advisor’s time. The surveyed advisors reported spending about 20% of their working hours engaged in business development, roughly equivalent to the amount of time they spent in client meetings. Another 30% of time went to meeting prep and follow-up. Only 11% of the advisors’ time went toward investment management, with the remaining hours split between things like operations, professional development and administrative duties.
As the new generation enters the workforce and older advisors retire or scale back their hours, owners of financial advisory firms may want to reconsider the way they spend their time. Ensuring your firm survives in the long run may require a shift in focus toward hiring, training and cultivating younger talent.
Your Priorities Can (and Should) Change as Your Firm Grows
Delegating back-office operations, administration and research tasks to trusted employees frees up a considerable amount of time that can be reallocated to employee training, client acquisition and client servicing.
An Advisorpedia piece suggests increasing time spent training employees to 12% of your total work hours. That may sound arduous, but it could be the difference between building a resilient practice and one that crumbles as soon as you step down. You don’t necessarily need to teach the sessions yourself to keep your employees learning and engaged, but it’s important for you to be present. For one, you may learn something new—on top of that you want to make sure the training itself is up to snuff to realize the associated benefits to employee satisfaction and engagement.
An emphasis on effective training has measurable impacts on employee satisfaction, so you don’t need to add a pool table or a karaoke machine to your break room to revitalize your firm’s spirit. Providing a variety of learning experiences like guest speakers, self-driven learning, employee-led workshops and one-on-one learning sessions with the boss (you) can have a huge impact.
Delegate or Die
It’s tempting to let business management—particularly training employees—fall through the cracks while there’s so much else to do. But with just a little less time spent on tasks that could be delegated and a little more focus on training, you can keep your firm staffed with engaged go-getters for long after you vacate your office.
Matt Reiner is CEO and co-founder of Benjamin; Partner at Wela Strategies LLC and Capital Investment Advisors.