When I started in this business 30 years ago, new advisors were trained, assigned a desk, given a telephone and expected to start building a client base. From that moment on, almost every aspect of the business fell on the shoulders of that individual advisor. Advisors had to be proficient in a myriad of areas including insurance, investments, estate planning and marketing, just to name a few. Those who werent able to juggle these responsibilities typically did not last long.
Our industry has certainly evolved since then. While there are still many advisors who are successful as solo practitioners, the evidence continues to show that there are advantages to forming a team practice. From what I have seen both across the industry, and at Ameriprise Financial, teams are often more productive, acquire more clients and engage more clients in financial planning relationships. We have also seen that team practices grow faster and have better long-term growth.
WHY TEAMING UP PAYS
By becoming a team practice, advisors are diversifying and adding skillsets that are important to clients. Having a team that can handle even the most complex of situations can enhance the relationship with clients and increase their satisfaction with the work you're doing on their behalf.
Think of it this way: When you work with an established law or CPA firm, you may have one contact that you work with, but you also know there is a team behind that contact who is contributing to your wellbeing with their combined expertise. Knowing that team is in place can create a sense of security for you.
When advisors add team members, theyre creating more time for themselves and other team members to better serve existing clients and focus on gaining new ones. We all know that building and maintaining relationships is critical in our business, but to do this consistently well requires valuable time. Advisors with teams tend to have more time to dedicate to nurturing relationships and to focus on other areas that are critical to the practice.
Developing a pipeline of talent can help position your practice for long-term success. Building a team provides an entry point for young advisors to get into the business and have a better chance of success. They may start off just booking appointments, but they can learn skills that can ultimately contribute to their growth and to the growth of the practice.
There are quite a few baby boomers among the ranks of financial advisors. And, like the consumers theyre serving, advisors are starting to retire in greater numbers. But before they retire, advisors want to know their clients will be well served in the future. Building a team practice gives advisors the opportunity to create a seamless client experience through a succession plan.
Should you choose to build a team, or become part of a team, you need to do your homework and take several things into consideration.
Make sure you and your potential teammates are aligned on the goals of the new relationship. Much like the planning you do for your clients, these goals will be the bedrock of your practice.
If you will be working with experienced financial advisors, clearly state each person's role and have a defined structure in place to hold each person accountable. The point of the team is to expand the options available to your clients. If you have three colleagues and all three want to do investments, you aren't really expanding the options, which could limit your growth trajectory.
If your team is going to hire recent college graduates, you need to be comfortable being a leader and mentor. This means you need to provide them with a career path and help them along as they learn the business. Too often advisors expect a recent grad to act like an experienced advisor. This leads to frustration on both sides and eventually a bad experience.
Finally, be picky. You are looking at growing your largest asset and you want to get it right. Ask a lot of questions and make sure you are comfortable moving forward. If you arent, it might not be the right situation.
While being a part of a team isnt for everyone, we have seen firsthand that it can lead to more success. Having a team can give advisors more opportunities to grow their practice, introduce new advisors to the industry and eventually help an advisor build a succession plan. And, most importantly, having a team can give an advisor what they seek every day more time to serve clients.
Bill Williams, executive vice president for Ameriprise Franchise Group, leads the independent advisor business for Ameriprise Financial and is a member of the executive leadership team.
- Teaming Up? How to Form a Better Partnership
- How to Pick the Right Junior Partner
- Do Solo Advisors Have a Future?