Nearly one half of a financial advisor’s day is filled with the administration of their practice.¹ That leaves the remaining time for the human side of wealth management. But much of that time is consumed with managing relationships or building the sales funnel, leaving precious little time for actually doing the planning.

For financial professionals who are looking to grow their firms, serve more clients, and create more financial plans, building an effective and efficient team is key. A team-based model offers a number of benefits for financial planning practices, including:

• Increased productivity: Tasks can be delegated to support staff, allowing planners to dedicate more time to crafting detailed financial plans, expanding their client base, and boosting revenue for the firm.
• Expansion of services: Firms can leverage financial professionals with complementary specializations, providing clients with a comprehensive array of services under one roof.
• Facilitation of succession planning: Team collaboration fosters cross-training and succession planning, guaranteeing a smooth transfer of expertise within the firm in the future.

Building the right team for your firm requires careful consideration. Here, we’ll discuss the different types of team structures, the common roles a team may include, and key actions that firms can take to ensure that their team works together effectively.

Types of Team Structures

If you are looking to build an effective financial advisory team, first you need to consider what type of structure works best for your firm’s overall objectives and client needs. There are three types of team structures to consider, each with their own advantages.

Vertical

In a vertical team structure, a senior advisor takes the helm, overseeing and guiding associate advisors along with support staff. With clear leadership at the top, decision-making becomes streamlined, ensuring that strategies align smoothly with the firm’s goals. Delegation of tasks is efficient, as responsibilities cascade down the hierarchy, allowing team members to focus on their specific roles. This structure promotes better coordination among team members, fostering an environment where everyone understands their duties and can contribute effectively.

Horizontal

In a horizontal team structure, financial professionals with unique and complementary skills collaborate, each taking responsibility for specific areas of expertise. For example, a horizontal team might include a financial planner, a tax professional, a legal expert, and an investment specialist. This setup promotes a culture of teamwork and cooperation, where team members can leverage their diverse skills and knowledge to tackle the whole client experience. This collaborative approach fosters innovation, creativity, and a deeper exchange of ideas within the firm, enhancing overall performance and client satisfaction.

Hybrid

This structure combines elements of vertical and horizontal structures. It features a lead advisor with associate advisors heading specialized teams underneath. By blending elements from both vertical and horizontal team structures, a hybrid team structure offers the best of both worlds. The clear leadership and delegation of tasks from vertical structures ensure efficient decision-making, while the collaboration and diverse expertise from horizontal structures foster innovation and problem-solving. This hybrid approach promotes a dynamic environment where team members can excel in their specialized areas while working together seamlessly towards common goals.

Building the Team

Once you have determined the ideal type of structure for your team, consider the roles you need to include in it. Defining clear roles and responsibilities will be key for your team’s success.  Articulating specific duties for each role will help avoid confusion, ensure accountability, and make sure no task falls through the cracks. Aim to structure teams so that members’ skills and responsibilities complement each other without significant overlap.

Depending on the size of your firm and the services you offer, several different roles could fit within your team structure, including:

Advisory Team:

• Lead Advisors or Practicing Partners work directly with clients, develop strategies, and oversee relationships.
• Associate Advisors support lead advisors, handle financial planning tasks, and may meet with clients in a supporting role.
• Service Advisors are primarily responsible for leading their own client relationships.

Support Staff:

• Client Service Associates handle administrative tasks, which may include client inquiries, account opening, and meeting scheduling.
• Operations Staff manage back-office functions, including trading and investment operations and day-to-day portfolio adjustments.

Specialized Roles:

• A Chief Investment Officer leads the investment strategy and oversees portfolio management.
• Portfolio Managers manage and implement investment strategies for clients.
• Investment Analysts conduct research and analysis to support investment decisions.
• Tax professionals address planning issues from an income tax perspective.
• Legal Specialists address planning issues requiring documents and legal agreements, such as wills, trusts, and business transitions.
• Compliance Officers ensure the firm adheres to regulatory requirements and industry standards.

Large, growing firms may add other specialized roles for areas such as dedicated firm management, marketing, and IT.

Key Considerations for an Effective Team

Developing a successful team goes beyond choosing the right structure and the roles to fill it. These key considerations will lay a foundation for a team that collaborates effectively and delivers exceptional value to your clients.

• Implement clear career paths and compensation structures: Defined career paths provide employees with a roadmap for professional growth, and well-structured compensation plans incentivize performance. This will enhance both your recruitment and employee retention efforts.
• Create a service calendar and workflows: Ensure that your team is delivering a consistent experience to all of your clients by structuring your services in a calendar and implementing workflows for specific tasks.
• Foster collaboration: Encourage teamwork between staff to gain a comprehensive understanding of the clients and their issues. A collaborative approach allows team members to leverage their individual strengths and perspectives, resulting in well-rounded solutions tailored to your clients’ unique needs.
• Build team culture: Create an environment where team members feel comfortable working together and offering feedback. Introduce the team to your clients from the get-go to ensure they don’t feel bounced around when they work with the different members.
• Invest in technology: Equip the team with the necessary software to deliver an exceptional client experience, streamline processes, and enhance data-driven decision-making.
• Focus on continuous improvement: Invest in training programs and professional development to keep team members updated on technology and industry trends.

Implementing an effective team model will take time and effort, but it is key for financial advisory firms looking to serve more clients and provide a high-quality, well-rounded client experience. With the right structure and processes, a team will not only streamline operations but lay a solid foundation for growth and success.

Sources:

1. Cerulli Report. “US Advisor Metrics.” Cerulli Associates. December 2024.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

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