Exemplary time management separates the "have" firms from the "also-rans". Independent advisory firms that squeeze more out of their working hours are more profitable as a direct result.

"The most successful firms are tenacious about time management in the face of accelerating growth," says Deborah Doyle McWhinney, president of Schwab Institutional, which has published a white paper called Best-Managed Firms: It's About Time "Principals and staff at the advisory firms included in the report are not necessarily working harder, they are working smarter."

Tick

The white paper examines myths about time management, identifies some best practices and suggests how managing time wisely can fatten an advisory firm's bottom line. The report is based on responses from the top 15% of independent, fee-based advisories in the 2006 Moss Adams Financial Performance Study of Advisory Firms.

Staff time is an advisory's biggest expenditure, accounting for as much as 70% of its total costs. The top firms understand that the relationship between staff capacity and productivity as a key to business growth; the less successful ones focus solely on revenue growth.

"Principals of best-managed firms are constantly working on and reshaping their business, as opposed to just working in their business day to day," says Dave Welling, v.p. of strategic marketing programs at Schwab Institutional. "The firms that take the time to pause, plan and prioritize business and time management tend to avoid facing the dilemma of either working longer hours or sacrificing a high level of client service."

Successful firms employ methods like strategic staffing, technology and outsourcing to increase the efficiency of internal communication and workflow. By trimming the amount of time they spend on operations and portfolio management, the owners and principals of top advisories spend up to 180 hours more each year interacting with their clients. In terms of a nine-to-five, five-day work week, they're squeezing another month out of the year.

Tock

Other strategies included accurate capacity management, retaining more support and managerial staff per professional, standardizing service delivery, and offering only those services that clients derive value from.

Among the myths that Schwab's report puts into question is the idea that anything problem can be solved simply if you spend enough time on it. In fact, employees hit capacity limits, and spending additional hours worked end earning decreasing returns.

"Busy advisors should be relieved to learn that achieving profitability, productivity and efficiency is not simply a matter of working longer hours," says Welling. "But without a solid commitment to consistently reevaluating time allocation as it relates to clearly defined business goals, it is just too easy to put it on the backburner."

Schwab Institutional, a division of San Francisco-based Schwab, provides custodial, operational and trading support to about 5,000 independent advisor firms. -FWR

.