How RIAs Can Free Up Time to Evaluate Operational Upgrades

Jun 2, 2023 | Guides

One of the toughest parts of running a financial advisory practice is time management. Managing a book of business requires many moving parts. 

According to a research study conducted by the Kitces team, financial advisors work an average of 43 hours per week, spending no more than  50% of their time on tasks focused on clients and 20% of time meeting with clients. The rest of their time is spent prospecting for new clients and working on backoffice activities.

Days get even busier when we factor in our human lives, beyond our work lives. In addition to working for a living, financial advisors are also human beings with families and other life responsibilities.

“Financial advice, like so many forms of advice, is a uniquely human endeavor,” articulates Kitces.

As with many human endeavors, it’s common for financial advisors to adopt routines and regular practices for running efficient businesses. Facing external pressures; however, it’s common for people to get stuck in routines. That’s where the staying “stuck in a rut” comes into play. 

The same routines that help keep us level can also help stall our progress. As a result, we fail to make critical upgrades to our businesses because we are too focused on the status quo.

So how can advisors strike the right balance of running a steady ship (without getting stuck in a rut) while continuing to make critical operational investments?

Here’s a simple process to follow.

1. Focus on one attainable, reasonable goal at a time

The most talented RIAs are masterful in helping investors establish and attain goals. 

Being focused on client service; however, it can be a challenge to step back to take the time to focus on our own goal attainment.

Especially for RIAs who are running an independent practice, the thought of introducing new technology, changing a process, or transforming a core operation may feel overwhelming and daunting.

The key to overcoming this bottleneck is to establish clear operational milestones. Some examples include:

  • Simplifying client billing processes
  • Implementing a communication portal
  • Reducing existing software costs
  • Putting in place a new integration-driven workflow

If there’s a lack of clarity around a goal, a meaningful first step is to assess existing pain points. For instance, Dani Mutz at Cross State Financial, before implementing CircleBlack, recognized that her firm’s team of contractors was struggling with the interface of the software that they were using at the time. 

Similarly, Martin A. Smith, owner at Wealthcare Financial Group, is continually evaluating his technology stack for opportunities to streamline expenses. He shared with the CircleBlack team in an interview:

“Every six months, I scrutinize the software that I use,” says Martin. “I ask myself what’s working and what’s potentially a waste of money. I also evaluate whether technology is too expensive, in addition to meeting its highest and best use for my practice.”

Focus is key to taking meaningful steps forward.

2. Think like an engineer — break down the challenge into smaller decisions

RIAs are well-aware that goals require meaningful steps forward to be attainable. But taking our own medicine, especially when it comes to building our own businesses, can be a challenge.

This is a solvable problem.

One technique to implement, to help make goal-setting easier, is to break down big-picture problems into smaller components. This deconstruction process is common among technical professionals such as software developers and engineers.

Consider the case of Diversified Capital Group, an independent RIA that consists of a father son duo, Paul and Cole Laughton.

Prior to joining Diversified Capital Group as a partner and co-owner, Cole was working full time as an IT project management consultant for the oil and gas sector, where he was responsible for advising on software implementation decisions.

One of Cole’s first responsibilities when joining Paul at  Diversified Capital was to offer clients a seamless client portal. To achieve this goal, he spent several months evaluating solutions in alignment with this technical experience and values. Cole’s process involved the following steps:

  • Identifying the qualities of an optimal user experience
  • Determining the attributes of the right software to use
  • Conducting a search for a solution
  • Participating in demos with a variety of solutions providers
  • Narrowing down potential technology solutions to a group of top contenders
  • Discussing tradeoffs with his teammate Paul
  • Signing on with CircleBlack
  • Developing a rollout plan to introduce the technology to Diversified Capital’s customer base
  • Establishing customer segments within their firm, to efficiently prioritize the deployment of CircleBlack 
  • Ensuring that Diversified Capital’s investors have the right level of support required to seamlessly utilize the new technology 

The power of these incremental steps is that they don’t necessarily need to be sequential or follow a precise order of operations. Firms can tackle specific tasks in alignment with a workflow and pace that is right for them. 

3. Implement a timeline

When evaluating operational upgrades, once specific tasks are established, it’s helpful to visualize milestones on a timeline or workback plan. 

The key here is to get set up for business success. That means moving as quickly and slowly as necessary.

Yes, a faster implementation of a solution means that investors start actualizing benefits sooner. But a short-sighted decision has the potential to result in business disruptions.

That’s why it’s helpful, when developing a realistic timeline, to visualize it. Here are a few methods to try:

  • Use a digital project management solution like Asana or Trello
  • Created a shared digital shared calendar for your team to easily access
  • Set up a whiteboard in a shared office space

A visualized timeline can help simplify the process of getting teammates on the same page, addressing bottlenecks, and course-correcting as needed. It’s about creating a shared system of collaboration and accountability.

Last but not least

As the saying goes, we don’t know what we don’t know.

Sometimes, the process of making an operational upgrade will involve bringing on trusted partners or consultants to provide recommendations and direction. These professionals can help with implementing systems based on their own personal experience, trial, and error.

It’s important that RIA firms work at a sustainable pace. But don’t underestimate the power of an expedient decision.

About CircleBlack

CircleBlack is an all-in-one technology platform for relationship-focused financial advisors. To learn how our software can help you build, manage, and grow your RIA practice, get in touch to request a demo.

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