October 25 – 27 Join us online at the 2021 eMoney Summit from October 25 to 27 as we explore how to provide an authentic planning experience that’s as unique as each of your clients.

Welcome to
Heart of Advice

a new source of expert insights for
financial professionals.

Get Started

Tips specific to the eMoney platform can be found in
the eMoney
application, under Help, eMoney Advisor Blog.

eMoney Logo
Magnifying Glass Icon
Mobile Menu Icon Close Mobile Menu Icon
Arrow Icon

Heart of Advice

Insights and best practices for successful financial planning engagement
Learn more

Back to All Articles

Explore Our Categories

eBook - Deepening Client Engagement Through a Focus on Financial Wellness

READ NOW

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

Connor Sung January 16, 2020

enterprises streamline planning efficiency

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, 87 percent of firms increased business efficiency and 88 percent saw increased AUM 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.

To take a deeper dive into resolving these inefficiencies, as well as a more detailed look at the research behind them, watch our on-demand webinar covering how enterprises can improve efficiency.

 

 

 

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 ROI Survey, Tech Validate, March-April 2019, n=289, * n = 180, 95% confidence level with an +/-8% margin of error
About the Author

Connor Sung, CFP® serves as the Financial Planning Group's Manager of Practice Management at eMoney Advisor. In his current position he provides consultative financial planning support and practice management to clients by helping them incorporate eMoney into their financial planning process. He also serves as a product expert and a resource for internal departments helping Sales, Live Training, Enterprise Relationship Management, Communications, and Development. Connor attended James Madison University, where he received his Bachelor's Degree in Finance in 2013. He earned in his CFP® designation in 2016.

You may also be interested in...

data privacy regulation response meeting

Practical Responses to Privacy Regulation

State privacy regulations are rapidly becoming a prominent legal concern for U.S. businesses. Privacy lawsuits against fintech favorites are settling for… Read More

fee-based planning compliance

9 Compliance Considerations When Switching to Fee-only Financial Planning

The financial planning industry has been steadily moving away from commission-based product sales for decades. Charging clients a fee based… Read More

United States Privacy Laws

United States Privacy Laws: A Legal Evolution

Your name. Your date of birth. Your IP addresses. The video your neighbor took of you winning the hot dog… Read More

CE Webinar - Making Money More Human: The Value of Emotional Intelligence in Financial Planning (1 CFP® CE Credit)

Join eMoney Thursday, October 7 at 2:00 p.m. ET to explore the power of emotional intelligence and the CFP Board's recent change to its principal knowledge topics.

REGISTER NOW

Sign up to have the most popular Heart of Advice posts delivered to your inbox monthly.

Sign up to have the most popular Heart of Advice posts delivered to your inbox monthly.

Heart of Advice by eMoney Advisors

Welcome to
Heart of Advice

a new source of expert insights for
financial professionals.

Get Started

Tips specific to the eMoney platform can be found in
the eMoney
application, under Help, eMoney Advisor Blog.