The last few years have been good for RIAs. Charles Schwab Corp’s 2014 benchmarking survey found that, since 2009, RIAs have seen median compound annual growth of 12.8% in assets under management and 13.6% in revenue. However, for many advisors this exponential growth has been accompanied by increased levels of stress and anxiety. Or, in the words of our CEO and president Michael Stier, “success has its price.”
In a new article published in InvestmentNews, Michael discusses stress in the RIA industry and reveals some tips for reducing stress levels at work and improving quality of life. This is a conversation we should all be having. After all, when Health Magazine includes our profession in its list of 10 careers with the highest rates of depression, we know something is up. For some hard data, check out Adhesion’s most recent Advisor Stress Survey.
- 79% of those surveyed rated the stress level of their job at 7 or higher (out of 10)
- 63% reported that stress had increased over the previous year.
This is not a problem that goes away on its own. If advisors do not proactively address ongoing stress issues they may also run the risk of eventually burning out completely. A skewed work-life balance can suck the fun out of the job and detract from the most important things like time spent with the family. The good news is that many RIAs are aware of the problem and have devised their own solutions for identifying and combating rising stress levels.
Michael points out in the article that while investment solutions have continued to evolve, many RIAs are still run the same way they were 5 years ago. The result is that advisors end up spending too much time on operational and back-office tasks to the detriment of client relationships and growing the business. Here are Michael’s tips for reducing stress in your business:
- Stop being your own assistant. A simple fix here is to hire an assistant if you don’t already have one. If you don’t want to make a new hire, you can delegate non-essential tasks to employees or even a part-time intern.
- Outsource your back office. Michael suggests looking to a turnkey asset management platform if your AUM tops $3 billion. Many platforms offer you access to sophisticated research, reporting, asset allocation, compliance and analytic solutions.
- Outsource investments. Researching and conducting due diligence on potential investments is a huge stress multiplier for many RIAs. An investment outsourcer gives you access to investment research and due diligence on separately managed accounts, alternative investments, mutual funds and ETFs, portfolio management, performance reporting and billing.
- Exercise. Exercise is medically proven to reduce stress and restore energy. Michael proposes setting aside specific time throughout the week to exercise, and treating it as you would a client meeting.
Leave the office at the office. Ultimately, it’s the things that happen away from our desk and outside the office walls that really matter. So follow Michael’s advice and give yourself permission to unplug.