An advisory team’s best days are usually those spent in front of their clients.
As most people join the advice industry to help others lead better financial lives, the time spent in client discussions, resolving issues, identifying forward steps, and creating greater confidence for their future, are the good times.
The best days for some advisers are spent in front of their screens analysing trends, portfolios, project plans and other crucial advice elements. However, the success of advice firms will have a greater dependency on the quality of time in front of their clients.
In fact, I believe it will have everything to do with it.
The measurement of “Face Time” is, I believe, an advisory team’s most insightful indicator of their productivity.
The industry is hurtling into a new era as quality advice separates from product advice.
Productivity management will either make or break teams in the emerging era of advice regardless of a firm’s past achievements or reputation. Unfortunately, the industry is not ready or well equipped to traverse the inclining productivity road ahead.
For instance, many advisory teams confuse productivity with performance measures such as the number of appointments or hours worked directly with clients.
Face Time is a more powerful gauge than most product-based activity measures as it is a percentage of an advisory team’s total available time. To grow, attract and retain clients and team members, performance has to be aligned on the quality of work performed rather than the quantity of work undertaken.
I learned the importance of Face Time when I ran workshops with the Financial Management Research Centre at the University of New England. The consistently profitable accountants, lawyers, engineering and similar service firms were recording and managing their teams using Face Time.
When I started benchmarking financial advice firms in the early 1990s, I found similar trends among advisory teams, and it has become a standard performance measure for the firms I coach.
What is Face Time?
It is simply a measure of the approximate time advisory team members spend in front (live or virtually) of clients, prospects, networks, centres-of-influence and alliances as a percentage of their total working time.
For instance, an advisory team member that spends approximately eight hours of their average forty-hour working week performing Face Time tasks outlined above, their Face Time is approximately 20%.
The average adviser face time is between approximately 20-25%. That is, advisory team members spending approximately a quarter of their week in front of their prospects, clients, networks, alliances, and centres-of-influence.
Importantly, Face Time is a trend indicator.
Face Time for a particular week is less important than the trend over weeks, months, quarters and years.
Ideally, Face Time is either increasing or remaining steady, provided other vital indicators are improving.
I mentioned a couple of these other indicators here.
Unmanaged, Face Time follows a predictable path, particularly for the firms’ founders.
The founders of firms in their start-up stage tend to have high Face Times.
They can’t afford to wait for the leads. So their early days are busy seeking opportunities, meeting purchased or finding clients, forging networks, and creating the necessary awareness of their offerings. Therefore their Face Times are high (usually over 30%).
As client engagements grow, the founder’s Face Time drop as inevitable administration loads increase. A natural phase but an unsustainable stage long-term for founders seeking to grow.
As advisory teams grow, Face Time nudges upwards as founders delegate administration tasks.
However, Face Times inevitably peak at the same time as the growing list of responsibilities of managing growing teams are heaped atop a founder’s client dependencies. This causes Face Times of founders to plummet as their working hours increase.
High workloads and lowering relative Face Times ensure growth doesn’t feel right. Face Times become entrenched in low self-inflicted ruts created by the habits which started the firm, but are now hindering further growth.
My management consultant idol – Ichak Adizes – refers to this stage as a firm’s ‘Founders Trap’.
The only escape is better and different priorities.
In recent years, founders have had little time or concern for their Founder’s Traps. Face Times for all firms were smashed by the dual storms of ridiculous regulatory reforms and Covid-19, throwing every team into a forced re-build of their fundamental administration procedures.
Face Time helps to plot the path not only out of the Founders Trap but all key personnel and administrative traps.
Mindset is the main hurdle for advisory teams implementing a Face Time led recovery.
The industry’s systemic alignment to product distribution has deeply entrenched productivity management based upon uncontrollable factors such as client wealth, assets or income rather than controllable factors such as the advisory team’s time spent in front of clients.
Productivity for decades has been driven by the quantity of assets held by clients rather than the quality of advice provided by advice teams.
The industry’s decades-long love affair with high-net-worth clients is thanks to the bond between adviser productivity and client wealth. Simply put, the wealthiest clients have been the most productive due to their wealth, not the quality of advice provided.
Many firms believe the coming $7T milestone of superannuation funds will keep the high and middle-net-worth markets ripe for the picking and retain a productivity model based on the size of client products managed. I believe firms concerned about their team members’ careers beyond the next five years must implement new (or at least parallel) productivity measures such as Face Time.
Markets will inevitably become increasingly crowded, clients will become better educated, and most importantly, technology will become unbelievably more ‘advice-capable’. This will result in a lower margin marketplace for advice providers still aligning productivity on their client’s wealth.
Implementation of Face Time is relatively easy.
Managing Face Time is tougher.
Face Time needs consistency more than timesheets divided into six-minute units to produce useful analysis. Timesheets serve a purpose for an advisory team’s profit-checking, but I’ve never found them useful for the billing of quality advice or Face Time calculation.
My own approach is illustrative.
At the beginning of each month, I review my past month’s paper-based desk calendar, which I use daily for my notes, meetings and reminders.
I estimate my Face Time for each month based on Face Time activities and approximate total working time. I also note a rough estimate for time per coaching client for profit tracking. This takes twenty minutes a month, and yes, I am often late and need reminders from my team for my ‘numbers’.
The method of measurement is less important than the consistency of measurement. This is important because, like my regular PSA scores, the measure for a particular month is not as significant as the trends over time.
What is ‘best practice’ Face Time?
I reckon 60%.
What is a reality for good firms?
I reckon approximately 40-50%.
Higher Face Times above 60% are often dangerous zones creating significant adviser dependency and creation of firms within firms with multiple propositions, brands, fees and internal ‘us’ versus ‘them’ cultures.
Lower Face Times, less than 20%, create huge and frustrating workloads for experienced advisers forced to constantly jump between high-end advice work and low-end administration tasks. That’s like driving a car only using 1st and 4th gears, which creates massive and systemic stress for all working parts.
However, worse is a combination of reducing Face Times and stagnating Average Revenue per Active Client.
This is a common and steep stairwell down into a Founders Trap groundhog daze with high toil and disappointing returns as founders vainly attempt to meet their team and client expectations. No one else hears the founder’s frustrating screams from these chaotic workplaces of self-creation.
There has never been a better time to realign advice with the first principles that drove advisers to become advisers – showing up to help others.
It will be impossible to manage the growth of firms if it is not correctly measured.
Aligning productivity with a controllable measure, such as Face Time, provides more sustainable growth paths than measures aligned to uncontrollable factors, such as client wealth.
Great times to be building great advisory firms.
What do you reckon?
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ABOUT JIM STACKPOOL
For over 30 years, Jim has influenced, coached, and consulted advisory firms across Australia. His consulting firm, Certainty Advice Group coaches, trains and builds advisory firms delivering comprehensive, unconflicted advice, with fees priced purely on value. He is growing a strong and collaborative community of advisory firms aligned on Australia’s only Certification Mark advice standard for comprehensive, unconflicted advice – Certainty Advice. He has authored four books regarding financial advice with his latest – What Price Value – available now since release in March 2022.