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