Among other things, building your team helps form a natural bridge to succession planning. Your clients will know they’re in good hands, and your colleagues will have developed the wherewithal to see the firm through thick and thin. Ultimately, a team-based approach demonstrates both to your staff and your clients that your firm is here to stay.
All Shapes And Sizes
No matter the size of your team, small or large, you may want to consider alternative ways of leveraging this concept—for example, outsourcing investment management to external money managers. One study showed advisors who outsourced added double the assets under management in a year compared to those that didn’t. (Perhaps that’s why 41% of advisors outsource more than 75% of their client assets.) That said, you should carefully weigh the pros and cons of outsourcing, as it can be costly and require additional oversight.
Some advisors go as far as to redefine their core business model from “investment management” to “client management.” This means outsourcing all investment-related activities so you can dedicate human capital to client-focused services like gathering assets, providing advice, and prospecting. On average, client-focused advisors spend 45% more time meeting with clients, and research has shown they can increase their annual revenues by 60% compared to traditional investment advisors.
Outsourcing isn’t the only way to expand your team, though. Explore opportunities for creative collaborations with professionals—such as CPAs, estate attorneys, realtors, or mortgage lenders—who can provide access to products or services you don’t offer in-house. These professionals can provide additional support and free up your human capital for more strategic work.
People Are Power
Tap into the power of human capital and team dynamics wherever you can: For the independent-minded, this can require a real shift in thinking, but a focus on human capital can provide tangible benefits for your firm, including making it more resilient in the face of future disruption.
But remember, human capital isn’t an infinite resource. Think creatively about how to leverage your support systems so your people can focus their time and energy on the work that is most important for your firm.
Gabriel Garcia serves as the managing director, advisor client experience for E*TRADE Advisor Services.