Grow your wealth management practice through effective teaming

Wealth managers, in our view, need to consider how to develop and grow their practices. Teaming can be an efficient approach that offers benefits in the short and long term. In its basic form, teaming simply means joining together. But to be effective in a wealth management setting, teaming should embrace cooperation and focus complementary skills toward a common goal.

According to Practice Innovation Index data, more than half (52%) of respondents operate in a team-based structure, meaning a peer team or a hierarchy with one or more leaders.¹ This includes the largest and most productive practices. Teaming has helped these practices specialize and scale up their capabilities, better positioning them to grow assets and deepen wallet share. Multi-wealth-manager teams may enjoy a variety of complementary skills, experience, and expertise. Unique combinations may let practices leverage individual strengths to give clients a wider range of services.

Structuring a team

Teaming depends on clearly delineated roles, responsibilities, and structure. Nearly half (47%) of Practice Innovation Index respondents indicate that roles and responsibilities within their practice are well defined and generally seem to grow, while 14% indicate roles and responsibilities are ill-defined.¹ Outlining the organizational structure and communicating responsibilities may lead to less overlap and more efficiency.

Practice leaders should openly discuss expectations with their team and align skillsets with appropriate functions. We believe drawing lines between roles and promoting collaboration across functions helps ensure team members stay focused. These teams may benefit from streamlined resources, processes, and services. They typically operate more efficiently and at a higher level of productivity than solo practices.

Effective teaming opens up opportunities for higher-value activities among senior management. Mentoring, training, and succession planning top the list of projects that may fuel the long-term success and value of a practice.

Looking toward long-term success

A teaming approach may help wealth management firms build succession pathways into their corporate structure. These pathways may reduce or avoid the barriers associated with succession plans at the practice level. As many practices struggle to hire talent, career path opportunities may help attract quality candidates and retain quality financial professionals. A sustainable practice with invested talent may lead to a lasting legacy.

As many wealth managers move toward retirement, more practices are likely looking to join forces. This potentially creates capacity and scale and outlines a succession path that may position a practice for long-term growth. The transition process is sometimes bumpy, with client flight a big concern. But a defined team structure may help ensure continuity and trust between the succeeding wealth manager and the client base.

The chances of a smooth transition may improve if a potential succession partner is integrated early in the process. Key steps include emphasizing the value of a team and introducing potential successors early in the client relationship. Strengthening the clients’ trust and confidence in a successor’s ability to take over may mitigate flight risk once the lead wealth manager eventually retires.

Conclusion

Despite numerous advantages, we have seen that teaming is only effective when there is alignment between the staff and leadership. Successful practices must truly integrate their processes, technology, and resources to achieve synergies. This requires buy-in across the practice and collaborative leadership from senior management.