The ongoing growth of financial advisory businesses over the past decade, when combined with the shift to ongoing recurring revenue models (from assets under management to monthly subscription fees), has led to more and more advisory firms accumulating a critical mass of clientele that requires them to expand their capacity by shifting from the ‘solopreneur’ advisor model into forming an advisor team. The appeal of the team model is the potential to both improve operational productivity through delegation of tasks, expand service with a broader range of expertise, and train and develop next-generation financial advisors in the business. At least, if the advisor team can actually function effectively… as in practice, it’s not enough to simply form the team, it’s also important to ensure it’s the right kind of team to accomplish the business goals of the firm, and that the team develops the skills necessary for it to function successfully!
Because the good news is that, with the right design and training, an Operational Advisor Team can function to increase revenue productivity, an Expertise Advisor Team can offer a wider range of professional services for clients, and a Development Advisor Team can cultivate a deeper talent pool for the benefit of the firm’s future. However, because those teams require different designs and training for each, it’s first necessary to identify the specific bigger-picture goals that are most important to the firm, to ensure the firm selects, optimizes, and fully leverages the team’s structure and training protocols to suit their purpose more appropriately. In other words, by first considering the benefits and challenges inherent in each type of Advisor Team, firms can optimize their team designs to fulfill their desired purpose.
Operational Advisor Teams function mainly to increase revenue productivity and operational efficiency by establishing work roles (e.g., back-office paperwork, scheduling, financial plan research and preparation) that support advisors, allowing them to maximize their facetime with clients. Yet, an effective Operational Team generally requires team members to work together seamlessly and to rely on the work products of their co-workers. Accordingly, the primary challenges for Operational Advisor Teams are developing trust among all team members, and establishing accountability standards through the development of training protocols that ensure the team knows what and how to do the work that is expected of them. Providing opportunities for autonomy can help team members develop trust with other team members, and even assigning team members themselves to create training protocols can encourage a culture of trust and accountability.
Expertise Advisor Teams provide clients with more of a ‘one-stop-shop’ experience for their financial planning needs, and include multiple advisors across different areas of expertise (e.g., CFPs provide comprehensive financial planning, CPAs run tax analyses, CFAs oversee client portfolio management, and estate attorneys identify estate planning strategies and create appropriate legal documents). The main challenges for these teams revolve around composition and communication. It is critical to identify the specific services to be offered so that the right set of experts are selected for the team. Furthermore, the importance of establishing (and reinforcing!) good communication protocols will be important, especially with a team of experts, to ensure that messages delivered to clients remain professional (e.g., ensuring that team members are courteous and respectful to clients… and to each other, even when they professionally disagree!) and uniform (e.g., getting all team members on the same page with respect to client strategy, despite different expert opinions that may conflict with one another). Thus, developing good communication skills within the team by holding meetings to review client strategies in advance, rehearsing conversations through roleplay exercises, and, when hiring new team members, will ensure that all members of the team understand the reason in order to maintain positive morale.
Development Advisor Teams foster new and rising talent in the firm with a focus on investing for the firm’s future talent pipeline, whether the reason is to support succession planning needs, to offer more vacation time, or to deepen the firm’s next-generation talent pool. For Development Advisor Teams, one of the main challenges lies in establishing training programs, which can be both time- and labor-intensive. Delegating to less experienced team members is another challenge, which can be emotionally difficult for more seasoned team members who may be struggling with the idea of retirement or moving on to different roles, and mentally challenging for those who must remember that tasks which are easy for them (that they have carried out routinely for many years) can be complex and potentially difficult to master for newer team members who need detailed instructions. Yet, in order to develop effective training programs and to delegate the right tasks to the right individuals, it is important to crystallize the specific goals of the company. Accordingly, by setting goals that are SMART (Specific, Measurable, Achievable, Realistic, and Timely), firms can design Development Advisor Teams that meet their specific objectives.
Ultimately, the key point is that there are different types of teams that advisory firms can develop, and choosing the right type of team will depend on what is most important to the firm and what overall goals the company has. But with a clear understanding of the ideal type of team that can fulfill the advisory firm’s goals, it’s possible to tackle the unique challenges that each type of team commonly faces, and advisory firms can target specific solutions to help their teams thrive while meeting organizational goals!