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The most important factors in retaining clients and building loyalty are the quality of relationships you build and the service level you provide – not the investment performance you deliver.
That should not be a surprise. While clients are more demanding than ever before, they are also more confused than ever by the complexity of today’s capital markets. They are looking for a trusted Advisor - someone to guide them, reassure them and help them attain their most important goals. To become that trusted Advisor requires spending as much time as possible in client-facing activities.
Unfortunately, studies show that fewer than one in ten Advisors spends more than 60% of their time meeting with clients and prospects. Most spend between 30% and 60% of their time in front of clients - while 28.1% spend less than 30% of their time with clients.
Research shows it is time well spent, with Advisors spending at least 60% of their time on client facing and business development activities earning as much as three times the average annual income of their peers – and six times the income of those who spend the least amount of time with clients.
Clearly, clients want your time - and giving it to them is what will make you a success. Top Advisors recognize that most of their efforts should be focused on their core competencies of financial problem solving, client relationship management and business development. Almost any activity outside those areas can - and perhaps should - be outsourced. Commonly outsourced tasks include:
- Technology systems
- Compliance/legal
- Administrative support
- Investments
- Portfolio monitoring/rebalancing
- Client reporting
Take a look at your own practice: Is your time focused where it should - on your clients, who will make you more profitable? Or are you spending too much time dealing with non-core competencies that do little to add value to your firm?
One of the most time consuming components to be outsourced is investment management. The table below shows how other advisors have been able to focus more attention on clients and prospects once they outsource investment management:
| Allocation of Time After Outsourcing Investment Management |
|
Current |
After Outsourcing |
Client Service |
34 % |
36 % |
Business Development |
11 % |
37 % |
Business Management |
15 % |
15 % |
Portfolio Management |
22 % |
0 % |
Operations |
13 % |
7 % |
Other |
5 % |
5 % |
Total |
100% |
100% |
Source – 2006 Moss Adams Financial Performance Study of Advisory Firms |
A commitment to outsourcing frees time to build relationships, build trust and drives more referrals. Examine you business and determine how you can create more capacity by outsourcing non-client facing activities. The time you save today may become the money you earn tomorrow.
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