In recent years, several upheavals have impacted the world – including South Africa. Inflation, continuing geopolitical instability, and supply chain disruptions pose a growing threat to the global economy and domestic growth, according to the latest “McKinsey Global Survey”, which was conducted in December last year.
These external pressures can negatively impact your business, which raises the question: How can you protect, or even increase, your company’s profitability against global threats that you have no control over?
The answer: effective time management.
Keeping the threats mentioned above in mind, re-examining your business should be a key focus area in 2023. How can you streamline your business? What can be done to ensure that time is spent effectively and efficiently because this will, in turn, give you a competitive edge and increase your profitability.
In addition to these external influences, local factors – such as changing regulatory requirements and spending more time managing client expectations and additional client services – add to the pressure, leading to increased operational expenses and reduced profits. And despite these challenges, you still need to take care of your business by remaining emotionally engaged with your employees and assessing your 2022 business plan and updating it for 2023. Profitability is a key indicator in a business plan, and you need to ask yourself how your business can better use its resources in pursuit of profit. One crucial, but sometimes overlooked, resource is time. How can you and your team manage your time more efficiently? One way to get to grips with how time is spent in your business is to understand how much time you and your employees devote to specific tasks day after day.
Consider the following questions:
- Have you recently looked at where and how you can create efficiencies in your business?
- Are you happy with the current levels of effectiveness in your business?
- Have you made a list of all completed tasks every day, including the amount of time spent on each task? of effectiveness in your business?
- Have you assessed the tasks and identified which are the most efficient and effective and why?
In this newsletter, we share some thoughts on how your business can increase profitability by managing time more effectively. Time management is the ability to use your time at work productively. It plays a crucial role in working efficiently and maximising resources. If you are faster, more efficient and more effective at completing tasks than your competitors, it gives your business an edge, making it stand out from the crowd. This leads to increased competitiveness, as well as client attraction and retention, while still adding value to the business and to clients.
Assessing how time is spent:
Where and how should you start to assess processes and test for efficiency and effectiveness? You could begin with a Financial Advisor’s daily schedule of completed tasks. This can include duties relating to new client acquisitions and prospecting for new clients, servicing existing clients, as well as administrative responsibilities and financial planning. When assessing the duties of a Key Individual, the daily schedule will likely also include operational activities relating to monitoring and overseeing the business.
This newsletter focuses on the tasks conducted by Financial Advisors specifically because it provides the Key Individual with an opportunity to have all Financial Advisors in their employ complete this time management exercise.
That said, time management is relevant to all employees, and everyone in your business could benefit from reviewing their workday or week. The more information your business gains on the overall amount of time spent operationally, and therefore its current and potential efficiency and effectiveness, the more streamlined – and profitable – it will become.
Plus, an added bonus of completing this exercise with all employees is that everyone in the business will gain a deeper understanding of their contribution to the bottom line, which will motivate them to be more productive and even upskill.
For example, research conducted in January 2022 by Business Health (Pty) Ltd Australia for their “Future Ready IX” report found that when employees are aware of specific key drivers, for example profitability as a business driver, profit increases as follows:
It is clear from the information above that profitability is positively impacted if more employees are aware of business goals.
Practical example and exercise
Below is an example of how Financial Advisors might spend their workdays. This is by no means a comprehensive list, but you can use it as a starting point to assess how you (or any mandated Financial Advisors in your business) use your time.
- Starting your day: Devote the first 30–60 minutes setting up for the day and reviewing emails from clients. You’ll be able to work through some emails quickly; others can be more complex and take more time. File your responses in the required folders. Where necessary, forward complex queries to technical specialists. Prioritise urgent or time-sensitive emails.
- Organising your inbox: Spend about 20 minutes assessing which emails should be deleted and which ones should be kept and dealt with later in the day.
- Addressing Product Providers or third-party queries: Use the next 2–3 hours to deal with questions from Product Providers and/or any other third parties. Time spent on this could vary from day to day or week to week and can include meetings with Broker Consultants for various reasons, for example updates on existing products, the launch of a new product or addressing long-outstanding queries.
- Meeting existing clients: Typically, Financial Advisors have a variety of tasks to complete, and most days don’t look the same. However, you should be able to identify specific patterns, for example you prefer client meetings in the mornings, on specific days or spread over a period of time, or you like to cluster face-to-face meetings by area.
- Finding new clients: Time spent prospecting for new clients will depend on the number of existing clients in a practice and whether a Financial Advisor is new to the industry or not. Evaluate the following: How many meetings did you have with prospective clients last year, and how many were converted into new clients? How many prospective clients referred new clients? Do you use social media networks, like LinkedIn, Facebook and Instagram, to market your business and look for prospective clients? How successful is each in contributing to your business goals?
- Reviewing ‘lost’ clients: How many clients were lost – and in which segment – and what was the impact on your persistency? How much income was lost?
- Reviewing client financial planning portfolios: How much time is spent on a client review? This will depend on the client segment, their portfolio, the specific Service Level Agreement in place and other intricacies specific to each client. Typically, these reviews are noted on the CRM and fall into a specific cycle. Does yours? How many meetings did your business have with existing clients last year? Are reviews prescheduled on the CRM system, and are they linked to client segment and Service Level Agreements?
- ‘Open time’: Allow time for the unexpected, for example a potential new client call and/or other types of commitments, like personal appointments, time with employees and time for CPD. Also use this ‘open time’ for operational responsibilities, for instance reviewing business plans, training a new Representative under supervision or managing accounts if you don’t have an accountant who does this on a monthly basis.
- Prepare for Compliance meetings: Depending on the type of FSP, these meetings are either monthly or quarterly and typically last 2–3 hours, depending on the size and complexity of the FSP.
Masthead offers an Implementation Service which helps Key Individuals navigate and implement the various Compliance and Practice Management requirements. Should you require specific assistance with the Time Management exercise, use Masthead’s Time Management Calculator. Please contact your Compliance Officer about the details.
We hope that these tips help you respond positively to the challenges you may be facing.
Economic conditions outlook during turbulent times – https://www.mckinsey.com/capabilities/strategy-and-corporate-finance/our-insights/economic-conditions-outlook-2022
Top Challenges for Financial Advisors – https://www.investopedia.com/articles/financial-advisor/052516/top-challenges-financial-advisors.asp
A Day in the Life of a Financial Advisor – https://www.investopedia.com/articles/active-trading/072815/day-life-financial-advisor.asp
What does a financial advisor do? (day in the life of a financial advisor) – https://saragrillo.com/2022/07/08/day-in-life-financial-advisor/
The Most Efficient Financial Advisor Marketing Strategies And The True Cost To Acquire A Client – https://www.kitces.com/blog/client-acquisition-cost-financial-advisor-marketing-efficiency-lifetime-client-value-lead-generation-satisfaction/
Future Ready IX Report. Insight into the Australian Financial Advice Profession, prepared by Business Health (Pty) Ltd January 2022 sponsored by Midwinter Financial Services (Pty) Ltd – https://www.midwinter.com.au/future-ready-ix/