6. Do you have an integrated book of business? When advisors know each other's clients, they can fill in for each other during absences and create consistency. The clients might see multiple advisor names on their monthly statements.
7. Do advisors who have different specializations in your firm work with the same clients? Some organizations that have similar niches have fostered increased specialization among their advisors. One advisor may specialize in risk management, for instance, while another specializes in estate planning. This can also help minimize the potential for conflict.
8. Do all the advisors in your firm manage investments and portfolios in a similar fashion? When investment management, such as fund selection, rebalancing and performance reporting, is consolidated into an investment committee or investment department, it frees up advisors to focus on client relationship management and rainmaking, streamlining the process for the benefit of all advisors in the firm.
9. Are operational processes in your firm shared? To ensure efficient daily operations, all advisors must follow the firm's standardized processes, including the preparation and follow-up for meetings. The more mature the organization, the more processes are standardized.
10. Is business management integrated? In larger firms, numerous business management responsibilities are combined and integrated. The same business plans, budgets, P&L statements and human resource documents are used firmwide, and strategic decisions are shared.
11. Within the firm, are there death or disability buy-sell agreements with other advisors? The more an entity looks like an enterprise, the more likely it is that the advisors have agreed to a buy-sell arrangement when joining. They understand that their clients' business will be redistributed within the firm, as the firm may pay for the purchase of their practice when they join or leave it.
12. Do advisors have defined leadership roles in the business? Or is the responsibility for managing the business delegated? The larger the firm, the more likely it is to have defined business management roles for specific partners. For example, one advisor might oversee human resources, while another oversees technology. In more sophisticated firms, a managing partner may run the show or the organization may hire a chief operations officer, allowing the advisors to use their time exclusively for rainmaking and client management.
13. Are business documents put in writing and followed by all? Written business documents tend to mean greater formality. Whether it is a meeting agenda or a formal review of business goals, larger organizations put more in writing. That includes the documentation of career tracks. Employees in larger firms may have structured expectations and defined development opportunities.
14. Is revenue pooled within the firm? In enterprises especially, at least some revenue is shared to minimize peaks and valleys in individual advisor production. The degree of sharing tests many advisors' interest in and commitment to being part of a larger organization.
15. Is firm equity shared among multiple partners? Larger, more sophisticated organizations have a built-in legacy, where firm equity is formally transferred to advisors when they become partners. The entity's health and well-being do not depend on any single advisor; instead, the firm should be strong enough to survive over time regardless of any particular advisor's arrival or departure.