If 'Working On' Your Business Turns You Off...
Why successful advisors must focus on what they do best
by Alex Reffet
Advising is a noble profession, but it can quickly become daunting when the business side of owning your own practice gets in the way. Instead of focusing on your true passion – serving your clients and providing them with solutions that address their needs and concerns – you find yourself buried in the responsibilities of being the “CEO.” But if you can structure your business in a way that alleviates certain tasks from your workflow, you can remain more focused on serving clients.
If they honestly reflect on their weekly time allocation, investment advisors would find they are probably spending around 70-80% of their time managing different aspects of the business and dealing with issues that don’t even involve working directly with clients. Some might do this to fill the time between client phone calls — others might do it out of necessity because they are wearing so many different proverbial ‘hats’.
Be An Advisor First…
And this is all before they’ve had time to study what is happening in the financial markets… or before they evaluate if rebalancing their client’s portfolios is needed to reflect their investment philosophy… or before they’ve updated that one client’s financial plan since they sold their beach house… or before they’ve had the chance to even get on the phone with their client to schedule their annual review. The list goes on.
Giving up control can be difficult, especially for something like running the day-to-day of the business you’ve worked so hard to build. But if you step back, you might realize your business, and your clients will be better off when you allow yourself to relinquish certain responsibilities to someone else equally as capable of managing them.
Let them deal with the “boring stuff.” Did we renew our business license? Have they weeded out all unnecessary solicitations? Do we need to update our website that’s getting a bit stale? Did we complete all our compliance requirements from our broker-dealer? Have we calculated all our clients’ RMDs before the end of the year? All crucially important to the success of the business, but not necessarily something you should be spending your time on.
Focus On What’s Important
Running any business has its challenges and distractions, but investment advisors have a unique position of being responsible for so many different facets of their clients’ financial life (in addition to actually running the business) that they often forget to focus on what’s important. Does processing payroll or researching and ordering a new computer really add value to your client’s financial situation? Does it increase your company’s revenues or create any growth? No and NO.
I challenge my fellow advisors to reconsider their business strategy if they find themselves justifying the need to do any tasks outside the scope of:
Bettering their relationship with clients
Working on tasks that directly benefit a client’s needs
Educating themselves to become better advisors
Growing their business
Keeping An Eye On The Bottom Line
Anything outside of these four tasks is managerial or operational – and if you’re not spending 75%+ of your working hours on these it will ultimately be a disservice to both you and your clients. As many times as I have said this, trust me, I already know the objections and the counter-arguments people make… “If my business isn’t running properly, I won’t have a business to service clients with…” or “I am comfortable with things like they are, and don’t want to add more stress and more clients.”
In my view, these are all driven by looking at the problem incorrectly. It’s not an issue of too little time to do the things that need to be done – the issue is that many have structured their business in a way where they are responsible for things that do not help the bottom line. Sometimes it’s a matter of feeling like they need to control every aspect of the business and have trouble trusting others to help. Other times it’s just an unhealthy routine that has been created – and much like other bad habits, feels unbreakable.
If you want to free yourself of the tedious elements of running a wealth management practice, you must GET HELP. Find a team to partner with that you can share resources with – resources that can eliminate over half of your day-to-day duties. Remember: if the tasks you are doing do not add to your bottom line, they are not a valuable use of your time and ultimately a disservice to your clients.
The biggest misconception advisors have is that there is no ‘middle ground’ between running your own practice as a sole owner-operator, and being part of a large financial institution that controls your day-to-day. There are many independent RIAs, such as ours, that offer advisors the independence to manage their clients flexibly without having to worry about every operational element of running the firm. At the end of the day, what determines the value of your practice is the revenues you generate, so find a partner that helps you increase your value to both your clients AND yourself.