Time Is Money (And Health)
The key to a successful financial advisory practice and, evidently, to good health can be summed up in two words--time management. According to a survey of nearly 300 advisors by the Financial Planning Association and Vestment Advisors, principals at the most profitable practices (which the survey defines as those earning more than $500,000 a year) are good delegators who let others handle much of the nitty-gritty of running an office so they can focus on developing client relationships. The upshot: More of their time is focused on the money-making aspects of the business even as they work fewer hours, which in turn gives them more time to exercise, do their own thing and, presumably, be more healthy.

Advisors who don't delegate as well spend too much time doing office management chores at the expense of meeting with clients. As a result, they spend more time on the job while making less money, which heaps on the stress while leaving less time for exercise or quality time for themselves.

"We find an amazing amount of stress among advisors," says Peter Vessenes, CEO of Vestment Advisors, a financial industry consulting firm in Chanhassen, Minn., that he operates with his wife, Katherine. He recalls working with one 30-year-old advisor a couple of years ago who was about to become a $1 million producer and was taking home $300,000 annually, but was on high blood pressure medicine and sleeping pills. Vestment approached the FPA about doing a study to gauge the health of financial advisors as a whole.

The survey of 297 FPA members was conducted in August, with follow-up questions in mid-October to account for this autumn's market mayhem (or at least the early part of it). Among the findings from the report, 2008 Health of Advisers, 37% of respondents said they were in terrific health. The remaining 63% said lack of time was preventing them from doing required things to improve their health.

The report makes a direct correlation between poor practice management, too much stress, and less-than-ideal health. Of those advisors earning less than $500,000 a year, 79% said paperwork was a cause of stress. That compares with 19% who earn more than $500,000. Among advisors below the $500,000 mark, 71% say that a lack of downtime is creating stress at home. That figure was 9% for those earning more than $500,000, who also were 15% more likely to exercise an hour or more a week than the sub-$500,000 group. And of the 10% of advisors who said they were unhappy with their professional life, none came from the $500,000-plus group.

Regardless of income, last year's severe market downturn impacted advisors across the board. According to the follow-up questions in October, 90% of respondents said market conditions increased their stress levels, and 31% said the market had affected their sleep. Part of that came from increased workloads as advisors spent more time communicating with clients during those difficult times. Before September 1, 14% of advisors spent 15 to 19 hours a week meeting with clients and 9% spent 20 to 24 hours a week. As of mid-October, those numbers increased to 23% and 17%, respectively. And while just 3% of advisors spent more than 25 to 29 hours a week with clients before September 1, that rose to 9% in October.

As of September 1, 34% of advisors said they worked 41 to 50 hours a week, and 31% worked 51 to 60 hours. This includes weekends and working from home. Twelve percent said they worked 61 to 70 hours, and nearly 5% said they worked at least 71 hours a week.

But all in all, advisors appear to be a healthy lot. "We compared our findings with statistics on the overall population from the Centers for Disease Control, and financial planners exercise more, eat healthier and smoke less than the average American," says Rebecca King, the FPA's research business development analyst.

401(k)s Getting KO'd
You'd think 401(k) plans would rank right up there with mom and apple pie, but the nasty downturn that decimated the 401(k) landscape has stoked a backlash from people who claim defined contribution (DC) plans have failed in their role to fund the great American retirement. Critics say DC plans don't get people to save enough, don't prevent people from making bad investment decisions and, in the case of the recent downturn, can ravage portfolios just as people near retirement age.

"I can't think of a worse retirement system than the one we have," says Alicia Munnell, director of the Center for Retirement Research at Boston College. "Even in the best of circumstances I never thought 401(k)s would produce enough retirement income. Even before this financial crisis it was clear we needed a new tier."

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