Choosing the Right Financial Advisor Team Structure

Whether you work for a larger advisory firm or run your own financial planning business, good team management can be critical to your success. A strong financial advisor team structure can increase productivity and allow the business to run more efficiently while ensuring that client needs are being met. There’s more than one way to approach team building, depending on your business objectives and goals.

SmartAsset’s Advisor Marketing Platform offers financial advisors services like client lead generation, automated marketing and more. Learn about SmartAsset AMP today.

Identifying a Team Structure for Your Firm

Building an effective team structure for your advisory firm requires an understanding of the options so you can choose the one that best fits your business model and company culture. The optimal team structure is the one that drives productivity, enables you to scale more effectively and doesn’t create unnecessary friction between your team’s key players.

With that in mind, here are three models your financial advisor team structure may follow.

Vertical Team Structure

A vertical team structure utilizes a top-down approach, with a senior advisor at the top directing other members of the team. In this type of arrangement, the advisor’s primary focus is on meeting client needs and managing assets. Other members of the team, which usually includes associate advisors and administrative staff, provide support to the lead and handle lesser tasks that have been delegated to them.

Horizontal Team Structure

In a horizontal team structure, each advisor brings a specific skill set to the table and is responsible for certain tasks. Advisors work together to complement one another and manage client relationships while delegating lower-priority tasks to support staff. This type of arrangement might rely on client service associates and/or paraplanners to handle certain front-, middle- and back-office tasks.

Hybrid Team Structure

Hybrid teams combine features of vertical and horizontal team structures. So, there may be one advisor who assumes a lead role, with one or more associate advisors heading up teams underneath them. Each of those teams can focus on a different aspect of the client relationship and include one or more supporting staff members. This structure enables each member to focus on their duties, while still maintaining a collaborative work environment.

Each team member’s strengths, the range of services you offer, the clientele you serve and where your firm is in its growth journey can influence the team structure you choose. You’re not locked into just one model; you may find it necessary to adopt a different structure if your firm’s direction shifts.

Client Acquisition Simplified: For RIAs

Ideal for RIAs looking to scale.
Validated referrals to help build your pipeline efficiently.
Save time + optimize your close rate with high-touch, pre-built campaigns.

CFP®, CEO

Joe Anderson

Pure Financial Advisors

We have seen a remarkable return on investment and comparatively low client acquisition costs even as we’ve multiplied our spend over the years.

Pure Financial Advisors reports $1B in new AUM from SmartAsset investor referrals.

Benefits of Having the Proper Financial Advisor Team Structure

Implementing team structures can yield numerous advantages to advisory firms, regardless of size or the number of clients they serve. Here are some of the best reasons to adopt team structures in your firm.

Increased Productivity and Revenue

Working in teams can help boost productivity when team members are able to focus on their strengths and delegate or outsource lower-priority tasks. When an advisor is able to devote a larger share of their day to serving existing clients or new client outreach, not only can they get more done, but their efforts may lead to an uptick in revenue.

Client Retention

Balancing the needs of existing clients with recruiting new prospects can be easier to do when there’s a solid team structure in place. Teams can also ensure that all of a client’s needs are being met in one place so that they’re less tempted to seek financial advice elsewhere. For example, a team that includes a certified financial planner and a certified estate planner may be better equipped to offer comprehensive wealth and legacy planning services. That can help to ensure client retention and potentially lead to more referrals from existing clients.

Employee Retention and Succession Planning

It’s important to take care of your team so that they want to keep producing for you. The right team structure can help make that a reality. They also may be less likely to consider other job opportunities elsewhere if there’s a clear path for moving forward ahead of them. That can also make succession planning easier for the firm’s owners if there are already strong candidates in-house who can take the reins when it’s time for the current leadership to step down.

Once you have the right team structure, you can focus on bringing in clients to grow your firm. Are you looking to expand the marketing of your financial advisor practice? Try SmartAsset AMP, our holistic client prospecting and marketing automation platform. With SmartAsset AMP, advisors can connect with prospective clients and use built-in tools to support follow-up.

Build a Better RIA

Drive growth with automation, not headcount using the all-in-one advisor marketing platform.

Tips for Building a Financial Advisor Team

When selecting a team structure, the most important thing to consider is what will work best for your firm. You may be tempted to choose a particular structure because you’ve seen your main competitor employ it effectively, but that doesn’t mean it’s going to produce the same results for you. Here are some of the most helpful tips to keep in mind.

Consider Your Firm’s Organization

How your company is organized can influence the type of team structure you choose. If you own your own firm, for example, then a top-down approach headed by you as the senior advisor may be a natural choice. On the other hand, if you’re one of several partners in the business, then you may prefer to structure your team horizontally so that you’re on equal ground.

Define Key Roles

Filling in the blanks for your firm’s team structure becomes easier when you understand who is responsible for what. Taking time to articulate the key roles within the firm and the responsibilities that accompany each of them is an important preliminary step for choosing a team structure.

Outline Team Activities

When forming a team, one of the most important questions to ask centers on what it’s meant to do. Those activities should directly relate to your business goals and what you need to do to meet the needs of your clients. Clearly defining the team’s activities can help you determine which skills are most valuable for team members to have.

Choose Team Members

If you know what roles your team will include, the next step is deciding who should hold them. This is where it’s helpful to have a solid understanding of each team member’s strengths and weaknesses so that you’re not assigning them duties that are a mismatch for their skill set.

Build Team Culture

Team culture can dictate how members communicate with one another and it also creates a standard of behavior that everyone is expected to adhere to. A good team culture is one in which team members feel comfortable working together and are encouraged to offer feedback or raise concerns about the way the team operates. Your team culture should also include systems for holding members accountable for tasks that are assigned to them. Otherwise, it may be all too easy for things to slip through the cracks, which can hurt outcomes.

Strengthen the Team

Once you’ve chosen a structure and put your team together, it’s important to invest in training and development. Doing so can help your team members keep pace with industry changes and trends. It’s also a chance for them to learn new skills or better develop the ones they already have, which can lead to a stronger team.

The more you grow, the more time you’ll need to spend growing and improving your team. This may make it difficult to do a lot of activities, such as marketing, on your own. SmartAsset’s Advisor Marketing Platform (AMP) offers financial advisors services like client lead generation, automated marketing and more. Learn about SmartAsset AMP today.

Bottom Line

Incorporating team structures into your advisory business may take some getting used to, but the end result can be well worth the time it takes to set them up. Keep in mind that you may not get it right the first time, but that shouldn’t be a deterrent to using teams. It may take some experimenting to find the right financial advisor team structure for your needs.

Tips for Growing Your Advisory Business

As you spend more time with your team, you may have less time for marketing. SmartAsset AMP (Advisor Marketing Platform) is a holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
Another way to grow your client base is by expanding your radius. Clients are increasingly willing to work with financial advisors remotely. Consider broadening your search and working with high-net-worth investors who are comfortable connecting online, rather than in person.