Let us examine law firms.
The practice of billable hours (hour-based billing) is one of many yardsticks used “to measure the relative productivity of a law firm, which is calculated by dividing a lawyer’s billable hours by the total hours worked”, according to the Law Gazette. In essence, it is the hourly rate billed directly to a client for time spent on that client’s case.
Smokeball.com emphasises how billable hours are to be “treated like a precious resource and tracked and scheduled accordingly”.
SAME SAME, BUT DIFFERENT?
Tell me, in what way are Financial Advisors any different?
Here is a rough breakdown of the whole process, inclusive of the hours spent working on the client’s case.
First Fact-Find Appointment (2 hours).
Case Preparation (2 hours).
Second Appointment (2 hours).
Closing (2 hours).
Servicing (2 hours).
Simply put, for a total of 10 hours dedicated to a client, based only on the full commission, exclusive of overriding, you would earn a ballpark figure of RM5K.
Since a lawyer’s billable hours are derived from dividing by the total hours worked on the case, in a similar fashion, one could apply the same principles on the workings of an Advisor.
Hence, a sum of RM5K over 10 professional hours, work out to be RM500 per hour.
Now, this, is how much you are worth as a Financial Advisor.