Advisers' time spent on back-office tasks

Increasing regulation and compliance requirements are reducing advisers' contact time with clients to less than a quarter of a typical day.

Friday, March 29th 2019, 6:00AM

A survey of 1000 advisers by Kitces.com, run by Pinnacle Advisory Group director Michael Kitces, found United States advisers were spending less than 20% of their time in client meetings. New Zealand advisers say their client contact time is at least as limited here.

Kitces said it was common for advisers to see clients once or twice a year, which made it hard to retain clients.

Meeting with existing clients took 8.8 hours of the average adviser's 43 working hours per week. Another 5.3 hours was spent on preparing for the meetings and 6.6 hours on the supporting financial planning and six hours of "follow-through client servicing tasks". Getting new clients took nine hours a week, of which four was spent with people. Five-and-a-half hours went on investment management tasks, 4.2 on admin, 3.2 on professional development and 4.7 on business management.

Graeme LIndsay, of Strategy Financial Services, said he would spend between eight and 20 hours on the process of preparing a statement of advice. "Face-to-face with a client would be two hours at that stage."

Tim Fairbrother, of Rival Wealth, said about 30% of time was spent on talking to clients in person, by video message or phone. "The other 70% Is a lot of client advice that they don’t see which is the important part to get the details right for Kiwis."

But Gavin Austin, of compliance firm ABC, said face-to-face was only one method of client contact and it was possible to maintain relationships even if direct contact time reduced.

He said, even if less than 20% of an adviser's time was in meetings, another 20% or 30% of time could be spent on the phone, or sending emails.

"This could mean somewhere between 5 to 10 other contacts for each client every year, based on 300 to 400 clients.

"So, in my opinion all that is only part of the relationship that adds value. There is also portfolio reporting, rebalancing and other behind-the-sceneS operations that add value to the client. One of the most important is using that telephone time to proactively contact clients when markets go down to reassure them not to panic. Selling out and realising paper losses is the primary reason that client returns are only about 85% to 90% of what the market returns are."

The survey showed advisers who delegated to support staff could generate more revenue - but that was accomplished by providing more time and services to clients overall, which allowed the business to attract more affluent clients.

Software was not creating time savings but was allowing advisers to do deeper planning work.

Tags: business management