Time has always been the scarcest resource for successful financial advisors. But given all the demands today, it's essential that advisors make maximum use of their workday.

Three Common traps

There are three common traps for advisors when it comes to how they spend their day.

Trap one: Being reactive

The first big trap is not being proactive in managing time. For many advisors, rather than managing their day, their day manages them - as a result advisors are spending most of their time reacting to events.

Trap two: How you use your time

Second is failing to focus on the highest and best uses of time.

Quite simply, too many advisors get bogged down in stuff that is low value and don't spend enough time on their highest value activities.

Those high value activities will vary with the advisor.

Typically, advisors need to spend some time on team management and                             communication, on portfolio research, on dealing with admin and client                             service issues and on continuing education.

But generally, these aren't the activities driving the success of a business.

Rather the things that make advisors excel typically fall into two categories - first, communicating with existing clients and second, either talking to prospective clients or doing things that will facilitate talking to prospective clients.

Trap three: No consistent routine

The third trap is not having a consistent routine for each day. Without a consistent routine, it's all too easy to get sidetracked and to have your day get away from you.        

How advisors are spending their time now

Cerulli Associates is a leading firm based in Boston specializing in research for the financial industry.

Late last year, they published a survey on how advisors spent their time in 2009.

What Cerulli found was that the average advisor spent 27% of their day dealing with existing clients and 16% with prospective clients.

So that was just over 40% spent on these highest value activities, which of course left almost 60% spent on lower value activities.

These lower value activities included 11% of advisors' time on client service issues and then between 7 and 10% of their day in five other areas, including research and due diligence, trading and asset management, office administration, training and professional development and compliance.

I was struck by two things in particular.

First, the time spent on research and due diligence and trading and asset management averaged about 17% - for some advisors it was much more, for others much less.

Advisors have to take a very hard look at their value proposition and where they bring unique value to clients - and if it's not related to the investment selection process, then take a very hard look at how much time they're spending in this area.

Second, I was also surprised by the 11% of the average advisor's week spent on client service related issue - that's four hours a week, almost 200 a year.

In some cases, advisors have no choice but to get involved but as much as possible you need to delegate lower value activities, even if it initially takes a bit of extra time to explain something.

Putting a value on your time

Let's suppose you buy into the notion that you need to delegate everything you can outside of high value activities.

As part of that, you should put a value on your time, say $40  or $50 an hour or  perhaps more - and using that as a guideline for deciding whether to do something yourself or to hire someone to do it.

If I can hire someone for $12 or $15 an hour to do filing, even it takes them twice as long as it does me, if my hourly rate is $40 or $50, it still makes sense to do this.

Improving the return on your day

A good place to start is by getting a handle on where you spend your time currently.

For one week, track how you're spending your time in 15 or 30 minute increments, putting that time block into common categories.

Here's one possible list of common activities to assign each time block to:

         Clients

                  Preparation for meetings or calls

                  Meetings (including travel)

                  Phone calls        

                  Client service issues

                  Preparing for and conducting client seminars and workshops

                  Other client activity

         Prospects

                  Preparation for meetings or calls

                  Meetings with prospects

                  Phone calls with prospects

                  Preparing and conducting prospect seminars and workshops

                  Profile building activity

                  Volunteer activity

                  Other prospect activity

         Office  and admin

                  Planning weekly and daily schedule

                  Formal team meetings

                  Informal team communication

                  Office admin        

                  Head office calls and meetings

                  Other office activity

         Compliance

                  Research and professional development

                  Daily reading

                  Attending manager presentations / roadshows        

                  Education sessions

                  Other reading and prof development

         Other

Once you've done that, you need to summarize the results and ask if this is consistent with focusing on the highest and best uses of your time.

If not, consider blocking out time in your calendar for high priority activities, whether it be calling clients you haven't spoken with for awhile or contacting a prospect that you're overdue to talk with.

Quite simply, if you block out time for them in your calendar, these activities are much more likely to happen.    

In the process, you'll see a dramatic increase in the return from the time you spend on your business.