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Most US Advisors Work In Teams As Shared Decision Making Equals More AuM

Robbie Lawther, Reporter, December 12, 2017


The report was created by the Investments & Wealth Institute and James Henderson Investors.

More than 60 per cent of US advisors work in a team, while only one-third collaborates in their decision-making processes. Shared decision-making could be a lost opportunity for some practices, with teams sharing the decision-making process overseeing more assets under management, according to a report by the Investments & Wealth Institute and James Henderson Investors.

The research study, conducted by Cerulli Associates, analyzed 2,800 practices operating across both solo and team-based models to examine the advantages of working in a team. Study participants included advisors operating in branch networks (wirehouse and national/regional broker dealers) and independent channels (independent broker dealers, RIAs, and hybrid RIAs). Teams were ranked by AuM per producing advisor, AuM per total headcount and average client size, and were then segmented into quartiles based on overall performance.

The report found that the industry’s largest advisors with $100 million or more in individual AuM are more likely to operate in a multi-advisor team.

Over 60 per cent of advisors with $100 million to $250 million in AuM operate as a team, as do 77 per cent of advisors with $250 million to $500 million in AuM, and 90 per cent of advisors with $500 million or more in AuM.

When analyzing top-performing teams, the report found top-quartile teams offer an average of 3.8 high net worth services compared to 3.2 for peers, and over half (52 per cent) of top-performing teams hire specialized staff roles, compared to 37 per cent of peer teams.

Face-to-face interaction
The report also found that client service and communication were components that set successful advisor teams apart. Nearly half (48 per cent) of top-performing teams hold quarterly in-person review meetings with clients compared to only 29 per cent of peers.

Outreach methods were also at the forefront for successful advising teams. Responses showed that these high-achieving teams are more likely to leverage proactive marketing and personal relationships help them to find new clients.

“Extraordinary teamwork is crucial for delivery of a remarkable client experience and to the success of an advisor practice in today’s dynamic wealth management industry,” said John Evans, executive director of Janus Henderson Labs. “These research findings reinforce the critical value of advisor teams in driving stronger trust, management responsibility and growth.”

Sean Walters, chief executive of the Investments & Wealth Institute, said: “At the Investments and Wealth Institute, we believe professional development is key to advisors’ success. The results of this study further demonstrate the real connection between advanced knowledge and practice outcomes. High performing teams that continuously invested in the technical depth of their advisors broadened their service delivery and won new clients because they were better equipped to address their clients’ complex needs and objectives.”

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