Build a Powerful Advisor Team

Manager delegate work on another person in team. Managerial concept with delegation.

The migration of solo advisors into advisor teams picked up momentum in the 1990’s when research revealed advisory teams scored higher in key performance metrics than individual practitioners.  Head-to-head comparisons of solo advisors versus advisor teams showed greater efficiencies in client retention, acquisition of new assets and enhanced levels of client service.  Advisor teams elevated the client experience at a time when clients began to demand more from their advisors.

Build the Right Advisory Team

It is estimated that about half of advisors today are engaged in some type of team dynamic; however, only a fraction perform at a high level.  Teaming is not a guarantee of success whether it is structured horizontally (the team reports to two or more equal partners) or vertically (the team reports to a single team leader). What separates the highly productive team from the less productive team is the subject of much industry speculation but some common denominators have been identified that are shared by almost all top advisor teams.

Elements of a Successful Advisory Team

Blending the right personalities together is important but what really makes highly functioning teams highly functional is having a thoughtful business strategy upon which the team executes.  A successful team has accountability where roles and responsibilities are clearly defined and performance is measured.  Regular communication between team members is essential because it allows for brainstorming and the sharing of ideas.  Great teams hire and train well and have highly effective leaders.  They have defined processes in place and last but not least, they have world class offerings.  These elements combine to become the core of their value proposition that favorably differentiates them from other competing teams and solo advisors.

Commitment to Best Practices

There is nothing secretive about why elite teams are highly successful.  Best practices are not simply something to which they aspire, it is what drives their business and their commitment to it is unwavering.  Top professional athletes practice fundamentals of their sports daily and so do elite financial advisor teams.

Another reason more advisors will be forming teams involves the Department of Labor’s new fiduciary rule which is scheduled to take effect in early 2017.  Next month we’ll explore how a team dynamic is the best response to the challenges this new rule presents.

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