At this stage in your career, would you be willing to work for minimum wage? My guess, the answer to that question would be no. Yet that is exactly what a number of financial advisors – and very good financial advisors at that – do on an almost daily basis. The reason for this is simple. Most advisors do not track, and therefore can’t determine, the “hourly” rate they are paid by their clients.
This is, of course, not to suggest that you shouldn’t work with those smaller clients that you believe may have the opportunity to grow into larger clients. It is to say, however, that with time as any financial advisor’s most precious commodity, you should make certain that you are spending time with those clients that allow you to yield a sensible return on your time investment.
By way of example, assume you have a fee-based client that generates $200 in net yearly fees. Let’s also assume that you meet with that client for an hour each quarter, as well as field calls from him during the year for an additional four hours. So your total time investment in that client is eight hours – without regard to any other time spent on that same client by any other members of your office – for which you receive $200. That works out to approximately $25 per hour. Not quite minimum wage, but you’re also not exactly knocking the ball out of the park either. If you “annualize” the $25 per hour, that works out to approximately $52,000.
At Summit Brokerage Services, we help our advisors identify these instances by providing enhanced reporting capabilities within our proprietary commission reporting system. Additionally, through our recently introduced DashBoard, advisors have the ability to view all of their pertinent commission information in one single location, thereby eliminating the need to view multiple pages of commission-related information. These initiatives, when combined with Summit Brokerage’s practice development capabilities, allow Summit advisors to maximize the value of their efforts.
For more information on Summit Brokerage Services, visit www.joinsummit.com or contact us at (800) 354-5528.