Time Management Seen as Essential as Advisory Firms Continue to Grow
SAN FRANCISCO, April 12 /PRNewswire-FirstCall/ -- Across the
independent advisor industry, firms are growing at an increasingly rapid
pace, making time a valuable resource. The best-managed independent
investment advisory firms typically work the same number of hours as their
peers, but are more profitable and more productive because of effective
management of principal and staff time, according to a new report published
by Schwab Institutional. The white paper, Best-Managed Firms: It's About
Time, examines the role that time management plays in the overall success
of a firm and offers effective management techniques from top firms.
Schwab Institutional, in conjunction with Moss Adams LLP, the 12th
largest accounting and consulting firm in the United States, developed the
report, which was compiled from interviews with the principals of 45
"Best-Managed Firms." These firms represent the top 15 percent of
independent, fee-based advisory firms surveyed in the 2006 Moss Adams
Financial Performance Study of Advisory Firms, based on a composite score
of firm profitability, productivity and leverage.
"What we have found in talking with advisors is that the most
successful firms are tenacious about time management in the face of
accelerating growth," said Deborah Doyle McWhinney, president of Schwab
Institutional. "Both principals and staff at the advisory firms included in
the report are not necessarily working harder; they are working smarter."
According to the report, staff time is usually the most significant
cost for an advisory firm, averaging about 70 percent of all expenditures.
The best-managed firms cited in the report have a clear understanding of
their firm and staff capacity, whereas other firms can get caught in the
trap of planning solely based on revenue growth without analyzing the costs
attached to things like customer service and administrative activities. The
growth leaders in the report allocate staff and principal time
appropriately, scale and structure the firm so that it runs efficiently,
institutionalize processes, and plan and measure results.
"Principals of best-managed firms are constantly working on and
reshaping their business, as opposed to just working in their business day
to day," said Dave Welling, vice president of strategic marketing programs
at Schwab Institutional. "The firms that take the time to pause, plan and
prioritize business and time management tend to avoid facing the dilemma of
either working longer hours or sacrificing a high level of client service."
Time is on Your Side
According to Best-Managed Firms: It's About Time, the most successful
firms in the industry recognize that time management is a business
management issue, and deploy their resources accordingly. These firms use
tactics ranging from strategic staffing, technology and outsourcing, to
streamlining internal communication and workflow solutions in order to
achieve maximum profitability. And it generally starts with the firm's
principal. On average, owners of the best-managed firms, spend an
additional 180 hours annually on client-facing activity and 24 percent less
time on operations and portfolio management. The report found several key
time management strategies that were common to principals of best-managed
firms. These firm owners:
* Spend less time on operations and portfolio management and more on
client service and business development
* Measure capacity accurately and use streamlined, efficient processes to
take full advantage of capacity
* Hire more support and managerial staff per professional than do
principals at other firms
* Offer only what clients value
* Standardize their service delivery
* Automate or outsource routine tasks
Overcoming Common Time Management Myths
The report also offers strategies for overcoming common myths regarding
time management. For example, the report identifies the myth that every
problem can be solved by simply working longer hours. In reality, according
to the report's findings, the opposite can be true when employees reach or
exceed their capacity limits and firms see decreasing returns on each
additional hour worked. In addition, the report dispels the myth that every
firm problem can be solved by the principal, explaining that owners should
know when to delegate tasks and issues to their staff in order to make the
best use of their time.
On average, owners who worked 60-hours per week, or 33 percent more
than the industry average of 50-hours per week, only generated an 18
percent greater pretax income per owner. The conclusion: longer-working
owners generated less income on an hourly basis, a median of $83 per hour,
compared to $93 per hour for the others.
"If there is one key takeaway in the report, it is that advisor firms
need to plan ahead and make business and time management a core part of
their routine," notes Welling. "Busy advisors should be relieved to learn
that achieving profitability, productivity and efficiency is not simply a
matter of working longer hours, but without a solid commitment to
consistently reevaluating time allocation as it relates to clearly defined
business goals, it is just too easy to put it on the backburner."
This report is the latest in a series of Schwab Market Knowledge
Tools(TM) (MKT) reports, an ongoing program of industry research reports,
white papers and how-to guides from Schwab Institutional designed to keep
investment advisors on the forefront of trends and competitive challenges
facing the industry. Offered exclusively to Schwab Institutional clients,
the MKT program delivers relevant and timely information for future
business planning. The MKT reports are a part of Schwab Institutional's
GrowthPoint(TM), a program that builds on Schwab's existing practice
management solutions and takes a uniquely tailored, strategic approach to
helping advisors build their businesses. GrowthPoint consists of three
distinct service offerings: Marketing/Business Development, Business
Strategy/Planning and Transition Services.
About Schwab Institutional
Schwab Institutional is a leading provider of custodial, operational
and trading support for independent fee-based investment advisors. This
year marks Schwab Institutional's 20th anniversary serving the independent
investment advisor industry. Since 1987, Schwab Institutional has supported
independent investment advisors by offering support and services to help
grow their businesses and help their clients reach their financial goals.
As of December 31, 2006, client assets custodied with Schwab Institutional
stood at $502 billion. These assets, managed by the approximately 5,000
independent advisor firms Schwab Institutional currently serves, represent
approximately one-third of total client assets custodied with The Charles
Schwab Corporation. Brokerage products offered by Schwab Institutional are
not FDIC insured, are not guaranteed deposits, and are subject to
investment risk, including the possible loss of principle invested. Schwab
Institutional is a division of Charles Schwab & Co., Inc.
About Moss Adams
Moss Adams LLP provides accounting and management consulting services
to advisory firms throughout the US, Canada and Australia. With a
particular expertise in the financial services industry, Moss Adams has
provided consulting services to more than 1,200 investment management
firms, broker-dealers and financial advisors on matters related to
compensation, organizational design, valuation, mergers and acquisitions,
financial management, strategic planning and leadership development. Moss
Adams is the twelfth largest accounting and consulting firm in the U.S.,
with a staff of over 1,800, including more than 225 partners. For more
information on Moss Adams, visit
http://www.mossadams.com/industries/financialservices .
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 300 offices and 6.8 million client
brokerage accounts, more than one million corporate retirement plan
participants, 150,000 banking accounts, and $1.3 trillion in client assets.
Through its operating subsidiaries, the company provides a full range of
securities brokerage, banking, money management and financial advisory
services to individual investors and independent investment advisors. Its
broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,
http://www.sipc.org), and affiliates offer a complete range of investment
services and products including an extensive selection of mutual funds;
financial planning and investment advice; retirement plan and equity
compensation plan services; referrals to independent fee-based investment
advisors; and custodial, operational and trading support for independent,
fee-based investment advisors through its Schwab Institutional division.
The Charles Schwab Bank, N.A. (member FDIC) provides banking and mortgage
services and products. CyberTrader(R), Inc. (member SIPC,
http://www.sipc.org) is an electronic trading technology and brokerage firm
providing services to highly active, online traders. More information is
available at http://www.schwab.com. (0407-0560)
SOURCE Charles Schwab
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Related links:
http://www.schwab.com/
CONTACT:
Michael Cianfrocca of Charles Schwab,
+1-415-667-3252, or michael.cianfrocca@schwab.com
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