I’ve always believed that running a financial planning practice is a hugely satisfying career. You see how planning changes lives, you create career opportunities for others and, if you get it right, the financial rewards are attractive too. That said, it’s hard work for financial planners.

During the start-up phase there are times when you will need to roll up your sleeves and get your hands dirty. For example:

• The website needs updating
• Portfolios need rebalancing
• Withdrawals need processing

I’m sure you will recall similar occasions when you got involved with tasks which weren’t the best use of your time, but nevertheless needed doing.

That’s fine for a start-up, but to scale a business it’s vital that the founders recognise when it’s time to start delegating. If they don’t, their business won’t grow. Worse, a founder’s inability to delegate could choke a business’ growth.

Maximise your talent

Someone once said to me only partly in jest: Elton John doesn’t polish his own piano. That’s true – instead, he focuses on what he’s great at: entertaining an audience and putting on a show. He doesn’t even write all his own songs, having brought in the expert lyricist Bernie Taupin to collaborate on that task.

In other words, Elton John recognises where his talent lies and focuses on maximising that, delegating everything else.

That’s exactly what you should do as a financial planner. Understand where you add value, then delegate everything else.

According to a Cerulli Quantative Update, financial advisers spend up to 41% of their time on admin and office management tasks. That’s around 15 hours a week where they are not advising clients and not generating income for the business.

Assuming an hourly rate of £150, that’s more than £2,000 a week of lost income doing tasks which might be better delegated elsewhere.

Consider that, according to PayScale, the average hourly pay rate for a paraplanner in the UK is just £12.20. The average office administrator earns £8.33 per hour. It’s easy to see where there are potentially significant savings to be made in delegating some of your admin workload.

You might decide that your value is in winning new business, developing client relationships and financial planning. Consequently, other functions such as marketing (it’s different from winning business), administration, paraplanning, operations, compliance, and investment management can all be outsourced.

Getting this right will help your business thrive, but it isn’t easy. You will need to empower your team to make decisions, build good habits of your own and develop the discipline to focus on where you add value.

Measuring success

How do you know if you’re making progress?

There are various benchmarks you could use; assets under management, turnover, and profitability immediately spring to mind. However, why not focus on the number of hours you are billing?

This is the method used by our peers in the accountancy and legal professions. It also works irrespective of how you charge. Essentially, you are measuring the amount of time and proportion of your working week which generates revenue or is focused on building the business.

By creating a baseline and then reviewing each week you will understand the progress you’re making.

What next?

Here at Beaufort Financial, we talk about the value of letting go to take control. So, how do financial planners do that?

There are several stages:

1. Understand where you add value

Start monitoring your activity and the time taken on each task for a few weeks. Then, look back at everything you’ve done and create three lists:

List 1: The tasks only you could do, which add genuine value

List 2: The tasks which could have been completed by another member of your team

List 3: The tasks where technology could have saved time and money

The tasks on the first list are those you should focus on. To do that though you will need the right team in place, which might need you to…

2. Consider your mindset

We encourage financial planners to think of their support team as an investment, not a cost.

We’ve all seen firms with planners managing relatively large client banks/assets and wonder how they do it. Invariably the answer lies in the support or back-office team with a high ratio of support staff to planners; both employed and outsourced.

These business owners understand that building a team isn’t a cost, but an investment which allows the planner to maximise the proportion of their time spent generating revenue or building the business.

This is especially important if you’re approaching retirement. With the most recent Heath Report finding that the average age of an adviser is in their mid-50s, you’ll need to build a good internal management team in order to either pass on or sell the business when you retire.

If you’ve got the mindset that your support team is a cost and not an investment, this needs to change.

3. Embrace technology

There are many manual processes which can be completed more efficiently and cost-effectively by technology. We often see planners and their support teams completing tasks which could be done just as effectively by apps or other software.

4. Outsource if necessary

You will, no doubt, be responsible for tasks which don’t generate revenue or help you grow the business and that you don’t have anyone you can easily delegate them to.

Examples of such tasks include:

•  Compliance
• Case reviews
• Training and competence
• Marketing
• Investment management

These tasks are vital to the growth of your business but probably not in your core skill set. They are best outsourced to experts.

That’s where we can help.

At Beaufort Financial we understand that for your business to flourish financial planners need to let go to take control, which is why we provide an outsourced solution for all the above.

Regards

Simon Goldthorpe

Executive Chairman, The Beaufort Group