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How Enterprise Advisory Firms Can Streamline Financial Planning Efficiency for Greater Growth and Profitability

Connor Sung January 16, 2020

enterprises streamline planning efficiency
Updated on: September 12, 2023

Enterprise advisory firms have a lot to gain from improving efficiency in financial planning. Incremental increases in efficiency at the advisor level, when scaled across the entire organization, can result in much greater profitability in the long term.

Most enterprises have a general understanding of how advisors spend their time. But a close examination of what an advisor’s work week actually looks like reveals some areas where firms can create meaningful gains in efficiency.

How Financial Advisors Spend Their Limited Time for Financial Planning

A recent Kitces survey shows that the average advisor has approximately 53 hours of work every week1. It’s immediately apparent that advisors are pulled in many different directions and the limited time they do have for planning needs to be used wisely.

Breaking down these 53 hours, advisors say they spend about 27 hours per week on activities directly related to clients, including client meetings, preparing for meetings, analyzing plans, and other service tasks. This only works out to about 50 percent of an advisor’s time—the rest is devoted to activities not directly related to clients.

Looking further into these numbers, less than 20 percent of an advisor’s time is dedicated to actually meeting with clients, which is just as much time as they’re taking to look for new clients. Less than 10 percent of their time is spent managing investments. If the average advisor has 96 clients, this only works out to 2.9 hours of investment management per client per year.

Most firms would want their advisors focusing on revenue-generating activities, like building long-term relationships with clients or managing portfolios. But the truth is that several things are pulling advisors away from their core responsibilities.

Common Sources of Planning Inefficiency at Enterprise Firms

While every enterprise is unique, there are several common sources of inefficiency in the planning process that plague the industry.

Technology Integration

A lot of enterprise firms suffer from a lack of tech integration. This is because over the years, as AUM and headcount have grown, technology solutions were purchased as they were needed. In the long term, this leads to a disrupted and confusing flow of data because integration was never a top priority in the selection process.

When this is the case, advisors have to spend excessive amounts of time managing data instead of analyzing it, and clients often have to input their financial information multiple times, creating a tedious and tiresome experience for everyone involved. Overall, financial planning process is slower, limiting a firm’s ability to grow.

Data Gathering and Onboarding

Onboarding new clients and gathering all their data is one of the most time-consuming aspects of the planning process. Typically, clients have assets held in a wide range of places. Collecting all of this information in a way that can be analyzed is laborious and inefficient.

When this process is manual, advisors won’t always end up with the information they need to see a client’s full financial picture. From the very start of the relationship, this limits an advisor’s ability to provide valuable, comprehensive planning. Clients dislike onboarding and data gathering as it is slow and tedious for them too—further straining the relationship right from the start. Not to mention, it’s one of the biggest barriers to adopting financial planning in the first place. The difficulty of gathering client data prevents advisors from having planning conversations, as well as integrating planning in an efficient way into their practice.

Administrative Work

An advisor’s work week can quickly get bogged down with administrative tasks. Things like sending balance sheets, transferring money between accounts, or opening new accounts can require significant time investments.

Administrative work may come from many different sources within an enterprise and could often be completed by other, less specialized personnel. While there will always be some level of back office work that must be completed, it can quickly start pulling advisors away from their core responsibilities, giving them less time for planning and other revenue-generating activities.

Each of the common inefficiencies that enterprise firms face can be solved with a tech-driven solution, and in some instances, the results are truly profound.

Resolving Enterprise Inefficiencies for Firm-wide Growth

Enterprise advisory firms wishing to improve the efficiency of their planning process need to take a careful look at their tech stack and understand the way in which data flows to architect a streamlined solution. They need a powerful aggregation engine to more quickly onboard clients, as well as some form of a client portal to keep clients engaged. Firms will need a robust, scalable financial planning software solution to accommodate different client segments while providing varying levels of access to employees.

Technology is at the heart of increasing enterprise efficiency. In one instance, an eMoney client reduced their planning time by six hours per plan after properly addressing their data flow. Another client tripled their planning fees after being able to better engage clients from the very beginning of their relationship.

Overall, according to an eMoney client survey, 82 percent of firms increased business efficiency and 70 percent saw increased AUM within 12 months after deploying financial planning software2.

In the end, enterprise firms that address these pain points with the right technology will begin to create an efficient, trackable advisor experience. With better oversight into the planning process, firms can continue to build upon these efficiencies for long-term growth.

There’s not a one-size-fits-all solution to improve efficiency at every firm, but most firms experience similar pain points and can deploy financial planning technology to solve them.

 

Sources:

  • 1. Kitces, Michael. “How Do Financial Advisors Actually Spend Their Time And The Limitations Of Productivity?” 2019. https://www.kitces.com/blog/how-do-financial-advisors-spend-time-research-study-productivity-capacity-efficiency/.
  • 2. eMoney survey, The ROI of eMoney, March-April 2021, n=238
Image of Connor Sung
About the Author

As Director of eMoney’s Financial Planning Group, Connor helps clients build more successful practices and deepen client relationships. He leads an exceptional team of financial professionals who help clients transform their technology platform and financial planning processes to increase efficiency, drive growth, and create planning-led user experiences. He oversees eMoney's financial wellness strategy, as well as internal and external financial education programs, aimed at providing financial peace of mind for all. Joining eMoney in 2013, Connor has over 10 years of technology, practice management, and planning experience. He earned a Bachelor's degree from James Madison University, and earned his CFP® designation in 2016. Connor loves spending time with his family and friends in Philadelphia, and enjoys staying active by golfing, snowboarding, playing hockey, and playing with his goldendoodle, Nala.

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