Canadian advisors who learn to manage their time efficiently have a lot to gain, according to a new Advisor Impact Inc. study on practice management.

“We found a group of advisors who were spending more time planning and focusing and who had more rigid time-blocking,” says Julie Littlechild, president of Toronto-based Advisor Impact, a financial services industry consultancy. “We looked at the size of their businesses and, in Canada, we found that they were about 30% larger.”

That statistic is among the most striking findings in the study, which was conducted during this past spring and summer among 2,000 advisors at both investment and mutual fund dealers in Canada, North America and Britain. It aimed to define how time management contributes to profitability among advisors.

Assuming advisors started their businesses in the same year, the most efficient advisors’ books had reached $32 million and generated $275,000 in gross revenue, compared with books of $25 million and $225,000 in gross revenue for those who do not apply various time-management strategies in their businesses. The median advisor in the survey had $26 million under management, $247,000 in gross revenue and clients in 215 households. The most efficient advisors reached 229 households.

A critical part of the study is that it compares similar businesses operating for the same amount of time, says Littlechild: “The advisors have just made different choices. The data are fairly compelling when you see the impact of just doing things differently.”

According to Advisor Impact, which annually asks advisors about the challenges of running their practices, this topic is increasingly important to advisors’ businesses. “In the past couple of years, I’ve noticed that time management and balancing work and family life has started to creep into the top challenges,” Littlechild says.

Indeed, this year, the two concerns were ranked as Nos. 2 and 3, behind attracting new clients.

The study concentrated on Canadian advisors; more than 1,000 from bank-owned brokerages and mutual fund dealers were surveyed. Another 800 advisors responded from the U.S. and Britain. The “efficient” and “inefficient” advisor categories were defined when Advisor Impact conducted a “cluster analysis” of the respondents. All advisors surveyed fell into either group, although the results don’t describe an equal distribution on either end of the “profitability” scale.

The study, sponsored by Manulife Financial Corp. and Univeris Corp. , both of Toronto, was designed to be more actionable than previous profitability studies, which have simply singled out the largest producers and described their good habits. “The problem is that it’s not very helpful,” Littlechild says. “We did it the other way around. We said, ‘Let’s look at what people are doing and the impact it has on their books’.”

Advisor Impact identified strategic, structural and personal efficiencies that should be in place in order achieve greater profitability. Applying strategic and structural efficiencies requires an effort, clarity and an investment of time that can make the process hard to achieve. A quick fix, such as simply applying block-timing to your day timer, Littlechild says, doesn’t work.

“The big challenge is that to get this whole approach right, you need to have the strategic and structural efficiencies in place — and that’s a lot harder,” she says. “You can’t just take the personal efficiency tactics and have no structural model, and think it’s going to work.”

For example, limiting e-mail checks to three times a day is a good idea. But if you have no strategic business plans in place, it’s not likely that you’ll answer them in a priority that supports an efficient organization.

In the strategic category, among the most efficient advisors, 48% had written personal, time-based goals and 68% had set clear business goals, while less efficient advisors did so only 19% and 42% of the time, respectively. Furthermore, when efficient advisors were asked “Have you ever gone through a time-tracking process to determine exactly how you spend your time?” 45% of the efficient advisors said “Yes”; only 2% of the least efficient did so. The average was 28%.

Advisors will have heard of many of the structural strategies Littlechild advocates. But, she maintains, many advisors still haven’t used them effectively in their practices, choosing instead to focus on personal tactical changes. Reams of paper have been filled with the value of efficient personal habits like “touching each piece of paper only once,” notes Littlechild, but they can be pointless unless they have an aim.

@page_break@Advisor Impact’s definition of structural efficiencies include clear delegation of substantial activities to team members; processes to deal with client interaction, including an understanding of client profitability; and technology such as client relationship management software.

Here, Littlechild differentiates between having a team and using a team approach. This category is not about delegating the answering of phone calls — although that can help to some extent.

“It’s not that more efficient advisors delegate more often; it’s that they delegate more important things,” says Littlechild. “They really involve the team in some things that other advisors try to hold on to. That is what is creating real efficiencies in the business and increasing client satisfaction.”

Most efficient advisors have also created a blueprint for interacting with a client “rather than recreating the wheel every time,” says Littlechild. An operations manual might detail how to open an account for a client; how to thank a client; how to update a plan.

On Advisor Impact’s structural checklist are client segmentation and a profitability analysis. Although Littlechild says all advi-sors know that imposing an asset minimum is crucial, less than half of Canadian advisors do so, the study shows. “Unless you’re very lucky, it’s hard to have a profitable business without having set a minimum price,” she says, “which is what this process effectively does.”

Littlechild concedes that a sense of fairness and equity may interfere with making these decisions. But, ultimately, advisors must understand that if a client doesn’t fit into their model, the client will be better served elsewhere.

“Maybe because you get into the industry, fight for every client you get, then you get to the notion of not working with someone — it’s anathema to these folks,” she says.

Part of any study on time management invokes a visceral response, notes Littlechild. For example, one survey question asked: “How often do you work at home?” The responses indicate clearly that the most efficient advisors have a better life/work balance, especially when U.S. numbers are introduced. About 36% of the time, the most efficient American advisors said they never work at home, compared with 25% of efficient Canadians.

“What we’re inferring is that the Americans, for a variety of structural reasons, have been more successful at building infrastructure in their businesses and in creating structurally sound models,” says Littlechild. “They see themselves more as business owners and they have made that choice … that the business can run without them —which is a goal for everyone.”

In fact, while the difference between the efficient and inefficient advisors in Canada was clear, it was the U.S. numbers that actually inspired Littlechild’s domestic analysis; the most efficient advisors in the U.S. had 60% more assets and 60% greater revenue than the least efficient among U.S. advisors.

Littlechild says that more U.S. advisors are in positions that impose stricter business regimens on them and force them to scrutinize their business practices. Registered independent advisors that clear through Charles Schwab & Co. Inc. or Fidelity Investments Co., for example, will have complete control of their costs and revenue, without the support of (or interference from) a head office. IE