Advisors: Teaming Up Brings Success
October 9, 2015 5:05 PM
How Teams Help Firms Grow
The benefits of working in teams are made abundantly clear in PriceMetrixs new Insights report, "Be Part of Something Bigger: Teams in Retail Wealth Management."
Read more: Why Advisors Should Be Using Teams
Data from more than 40,000 advisors shows that firms that make use of teams grow faster, achieve higher returns on assets and do a better job of retaining clients. Compared with sole practitioners, advisors who work in teams attract more affluent clients, manage more money and produce more revenue, according to the report.
The following slides provide a deeper dive into the PriceMetrix data, providing a more complete look at how teams compare with individual advisors and what combinations of advisors work best as a team.
Read more: Why Advisors Should Be Using Teams
Data from more than 40,000 advisors shows that firms that make use of teams grow faster, achieve higher returns on assets and do a better job of retaining clients. Compared with sole practitioners, advisors who work in teams attract more affluent clients, manage more money and produce more revenue, according to the report.
The following slides provide a deeper dive into the PriceMetrix data, providing a more complete look at how teams compare with individual advisors and what combinations of advisors work best as a team.
Individual Advisors vs. Teams
PriceMetrix compares advisors who work in teams to those who operate independently. Team advisors outperformed sole practitioners in all categories, most notably averaging $20 million more in assets and $120,000 more in revenue per advisor.
The Toronto-based research and practice management software firm also found that the average team in aggregate manages $260 million and generates $1.7 million in revenue across 280 relationships.
The Toronto-based research and practice management software firm also found that the average team in aggregate manages $260 million and generates $1.7 million in revenue across 280 relationships.
What Type of Clients Work with Teams?
Team clients have, on average, $220,000, or 17% more in household assets than clients who work with individual advisors, according to the PriceMetrix report. Teams also have fewer relationships with households that have less than $250,000 in investible assets.
In terms of client age, gender and the number of joint-account holders there was little difference.
In terms of client age, gender and the number of joint-account holders there was little difference.
Team Client Relationships
Clients of teams display a greater willingness to consolidate more of their financial relationships than do clients of sole practitioners. Team clients are also more likely to have both fee and transactional accounts.
These deeper relationships, PriceMetrix notes, suggest that more value may be exchanged between clients and their team-based advisors."
These deeper relationships, PriceMetrix notes, suggest that more value may be exchanged between clients and their team-based advisors."
Team Asset and Revenue Growth
PriceMetrix found that teams achieve 11% faster asset growth than individual advisors and 17% faster revenue growth, and that their growth rates are less variable.
The team structures joint accountability leads to greater discipline, which results in faster growth rates, says Pat Kennedy, PriceMetrix' co-founder and chief customer officer. "It's like having an exercise partner," he explains. "Having one won't cause you to lose weight, but if you work out with someone else, you're more likely to do what you need to do to lose weight."
The team structures joint accountability leads to greater discipline, which results in faster growth rates, says Pat Kennedy, PriceMetrix' co-founder and chief customer officer. "It's like having an exercise partner," he explains. "Having one won't cause you to lose weight, but if you work out with someone else, you're more likely to do what you need to do to lose weight."
Team Composition by Age
Teams with members who are closer in age grow the fastest, the report found.
Team Composition: A Family Affair?
Teams whose members belong to the same family grow more slowly than teams whose members come from different families, the report concluded.
Team Composition by Gender
Teams with both male and female members grow faster than male-only or female-only teams. The report notes that mixed-gender teams form "the most effective partnerships."
