Opportunity vs. Distraction: Three Steps to a More Successful Firm

It’s a widely accepted rule that human beings can’t do, or recall, more than three things at a time (at least not very well).

This applies to low-stakes situations, like not being able to remember what you need at the grocery store without a list or where your car is in the parking garage, and at more critical times – like trying to juggle everything you need to do to run your RIA successfully.

When you think about the rule of three as it applies to your day-to-day operations, it makes sense. It’s overwhelming to focus on even one thing when you have several other tasks vying for your attention.

And as both a business owner and an advisor, it’s likely your responsibilities far exceed three – preparing for and meeting with clients, recruiting, hiring and training new staff, staying on top of compliance regulations, vetting and maintaining technology, marketing, trading, billing, and payroll – the list quite literally goes on.

While the rule of three is understandable, even logical when you consider the limitations of the human psyche, it can also be frustrating for advisors who feel they have no choice but to juggle a never-ending list of non-negotiable jobs.

So how can you turn this apparent shortcoming into a competitive advantage for your firm?

By learning the art of ruthless prioritization (presented in just three steps, so you don’t forget them):

1. Determine which three tasks are most important and delegate the others.

It’s called ruthless prioritization for a reason – this won’t be easy. Owning your firm practically requires you to feel like you can’t give up control of anything. But while it might feel counterintuitive, letting go of some tasks will actually make you more successful.

The key is distinguishing between opportunities and distractions. Which elements of the work that you do create the most value, either for your clients or your firm?

For example, meeting one-on-one with your clients, building financial plans, and putting out thought leadership content on a weekly basis to attract new business could be your top three value drivers.

That means everything else – reporting, order processing and settlements, billing, etc. – are just distractions for you. They should be offloaded to an administrative employee or an outsourced partner.

2. Re-evaluate priorities every 3 to 6 months.

Just like your clients’ plans, which need to evolve as their goals change, this isn’t a set-it-and-forget-it framework.

As your firm grows and scales, as you expand into new markets or enhance your product offerings, you may need to adjust the priorities you’ve chosen for yourself and the ones you’ve delegated.

Use regular client and employee satisfaction surveys, prospect pipeline metrics, and revenue numbers to check in on whether you made the right choices, or if some priorities need to be shifted. If your clients and employees are happy, your pipeline is full and revenue is increasing, you can probably rest assured you’re on the right track.

3. Be prepared to make adjustments on the fly.

Major market events, business disruptions, and life surprises could de-rail your prioritization framework at any time (look no further than the COVID-19 pandemic for evidence that the entire world can in fact shift seemingly overnight).

But if you bake that understanding into your plan, you’ll be as prepared as you can be for the unexpected.

What does that look like in practice?

• Building out disaster recovery and business continuity plans
• Leaving a few hours open on your calendar each week in case you need to reschedule meetings to deal with emergencies