In the wealth management industry, the concept of teamwork has become a central component for achieving scale and generating business value for advisory practices, according to new research from Cerulli Associates and Osaic.
The study, titled “Top-Performing Teams: Exploring the Benefits and Approaches of Building a Team-Based Advisory,” found that team-based practices achieve better results in key measures, including assets under management (AUM), services offered, and productivity.
According to Cerulli, nearly half of advisors currently work in a team structure. The trend towards teamwork is even more pronounced among larger advisory practices: 94.5% of practices with over $500 million in managed assets operate in a team-based structure, compared to only 5.5% that operate solo.
Teams benefit from optimized resources, processes, and services, and typically operate with higher levels of productivity compared to individual practices.
The research found that team-based practices have an average of $100 million in AUM per advisor, compared to $72 million among individual practices.
“One of the key benefits of multi-advisor teams is the diversity of skills, experience, and complementary knowledge. Combining the expertise of each team member allows practices to leverage their individual strengths and provide specialized services, including lending, estate planning, and tax services,” says Asher Cheses, director at Cerulli Associates.
Teams serve a broader core market, with an average client size of $1.6 million, compared to $1 million for individual practices.
Advisors seeking to move upmarket or enter a new client segment have succeeded by forming teams to expand their service offerings to include more financial planning and high-net-worth (HNW) services.
“Teams can accelerate their growth by better leveraging platform resources, such as financial planning, advisory, and high-net-worth solutions, as well as business development resources and capital solutions,” says Kristen Kimmell, executive vice president of business development at Osaic.
