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Is Your Team Making Money or Weighing You Down?

February 13, 2014

Many advisors are switching to team-based wealth management lately, and the incentive is clear: Our internal research shows that advisors who work from a team structure manage, on average, 97% more assets per team member than those who do not.

However, many team leaders fail to reap the full benefits of building a team, because they don’t fully utilize their team members. In fact, they often end up creating more work for themselves by essentially running a more complex version of their solo practice. This happens not only in teams with a single leader but also in those where two or three advisors share leadership responsibilities. In either case, the lead advisors need to clearly define their own roles and their team members’ contributions.

The following are signs that team leaders aren’t collaborating enough with team members:

  • Team leaders spend more time at their desks than with clients and centers of influence. Lead advisors are limited in their ability to engage with current and prospective clients if they’re pushing paper and answering e-mails. Team leaders should pass such responsibilities to a trusted staff member who will consult them only when the situation requires a certain level of expertise or authority. Team leaders should identify these employees and work with them to create a process for every type of communication and document likely to cross their desks.
  • Team members take a reactive rather than a proactive approach to work. If team members are sitting around waiting for someone to tell them what to do or approve finished assignments, they may be draining time and resources from the practice. Lead advisors should make sure all team members are intimately involved in defining the team’s goals and the processes intended to achieve them. Leaders should identify team members’ strengths and potential areas of leadership, then jointly craft a process for delegating responsibilities. This will increase the group’s overall confidence as well as its efficiency.
  • When the phone rings, the team leader is expected to answer it. Senior advisors can’t be tied to the phone when client prospecting is a more pressing priority. Team leaders must have flexible schedules so they can respond to business opportunities. Trusting team members to take the lead advisor’s calls and handle similar responsibilities can accomplish two objectives. First, it relieves the leader of having to put out every fire. Second, it gives clients an opportunity to build relationships with team members. In the same vein, leaders can bring less experienced team members to prospecting and client meetings. This will help strengthen relationships across the board, while allowing younger advisors to watch more experienced colleagues work.
  • Your practice isn’t sustainable and scalable. If the team leader runs an operation where processes and outcomes aren’t easily replicated, the team will waste time adjusting to a constantly changing business. Ultimately, the team needs to create a business model that can support sustainable growth. Team leaders should determine the day-to-day, week-to-week and month-to-month tasks their colleagues regularly engage in. They should work closely with staff to standardize processes that nurture the business model they have chosen.
  • You’re missing opportunities to engage with younger clients. An important part of a sustainable practice is letting clients know that advisors can relate to their heirs. If team members don’t build relationships with the next generation, the business risks losing potential clients when wealth transfer occurs and the industry’s focus shifts from baby boomers to Gen X and millennial investors. Team leaders should train at least one young advisor on the team in relationship skills and client-acquisition tactics. A young advisor may have credibility with next-generation prospects that an older advisor — even the team leader — does not.

Building a team can more than make up for the investment in creating one. However, team leaders must be able to “let go” enough to develop rising talent who will advance the firm’s goals.