College physics taught us that power is the quantity of work being done over time. The formula can be written like this:

Power = Work / Time

Engineers know that you can increase power by raising the amount of work done in a given time, or by reducing the time required to produce a quantity of work. If you can do both, it is like a super power!

As financial planning practitioners, our work is not measured in watts or joules but in clients helped, good decisions made and client self-sabotage avoided. This happens when knowledgeable professionals are engaged meaningfully in clients’ lives through meetings, calls, and written letters and e-mail communication. For shorthand let’s call this advice. So, to revisit the formula, power = advice divided by time. Most advisors are far less powerful than they could be because their time is not dedicated to advice, but in fact is swallowed up in a myriad of other tasks, chores and minutiae that is anything other than advice. While every advisor has 168 hours per week, and something like 40 or 50 hours at “work,” the amount of time dedicated to actual advice is a small fraction of 40 hours. Therefore the limited amount of advice is divided by 40 or 50 hours resulting in low power output.

Power Plunderers

None of this is meant as a judgment of financial planners. And low power output is not because advisors are lazy or have bad intentions. Instead, there are forces arrayed against advisors’ power production. To switch super power metaphors, these forces are like kryptonite for Superman. Financial advisors’ kryptonite includes all kinds of things that masquerade as important activities but don’t actually help clients make good decisions or navigate their most important financial decisions. Here are some of the power thieves that I have experienced and observed:

• Meeting with wholesalers

• Negotiating copier leases

• Shoveling snow or mowing grass at the office

• Updating beneficiary forms

• Entering trades

• Changing client address in the CRM and back office systems

• Processing redemption requests

• Selecting software vendors

• Analyzing investments

• Paying bills and managing payroll

• Picking mutual funds

• Setting up paperless statement delivery or online account access

• Opening new accounts

• Calling home office or the custodian

• Entering data into financial planning software

I can already hear the protests: “But helping clients select beneficiaries is a critical part of the planning process” or “Financial planning data has to be accurate or the advice will be compromised.” Agreed. And I will stipulate that most of the activities listed above must happen for the business to run and for the clients to get their money and mail, and not slip and fall when they come to the lobby. But the point of this article is to identify how advisors can produce more advice per work week. Not one of the items in the list must be done by an advisor. Forms, addresses, redemptions and database updates can be done by paraplanners and receptionists. Investment selection can (and probably should) be made by investment professionals whose sole focus is thinking about investments and watching their Bloomberg terminals. Several of the tasks are functions of running a business and have nothing to do with clients at all: paying bills, managing payroll and negotiating leases with vendors can be done by an accounts payable or finance expert (who is probably better at getting government forms filed on time anyway).

Leverage Ensemble To The Rescue

Advisors who maximize their advice and therefore their power have learned to rely on an organizational structure called a leveraged ensemble. (According to the 2017 Investment News Staffing and Compensation Study, advisors in super ensembles generated the greatest amount of revenue per professional.) Ensemble means that a whole team of people serves the clients. Of course there is a lead advisor to be the trusted point of contact and to deliver advice. In addition there is an investment team, operational staff, support and service advisors, human resources and accounts payable and finance departments, as well as technology and legal support to help the business run well. And the leveraged part of the term means that as more and more non-advice tasks are removed from lead advisors, they get to spend more and more of their time delivering advice to clients. Remembering back to the power formula, more advice divided by the hours in a work week means more power. And that makes a leveraged ensemble a financial advisor’s super power! Philip Palaveev’s Ensemble Practice group guided the Staffing and Compensation Study. Many of the observations in the study are also examined and explained in his excellent book, The Ensemble Practice (Bloomberg Books, 2012). In the book, Palaveev describes how an ensemble wealth management practice works, and provides many of the steps needed to create a team-based wealth management firm. From my experience, there is a pretty big gap between knowing what to do and actually doing it. For advisors and wealth managers interested in boosting their power and ability to help more people more effectively, they can read the book and studies. Then spend years experimenting and hundreds of thousands of dollars to put the systems, infrastructure and technology in place to transform their business. Or, they can find a firm that has already done the hard work of building an ensemble. Since power is a function of work divided by time, there might be a serious case to be made for joining an ensemble and saving the years needed to build it from scratch. Your super power might already be waiting for you in an existing leveraged ensemble!

John Knowlton is managing director of corporate development for Credent Wealth Management, a $750 Million hybrid RIA with locations in Michigan, Indiana and Texas.