What’s the secret to improved client relationships and retention? A recent study finds the key to greater success is to take a team approach
What’s the secret to improved client relationships and retention? A recent study finds the key to greater success is to take a team approach.
The Teams in Retail Wealth Management report by analytics software firm PriceMetrix found that multiple advisors working together outperformed lone wolf practitioners – in nearly every area.
“It was difficult for us to find any area, statistically speaking, where teams underperform sole practitioners,” says Chief Customer Officer Patrick Kennedy. “In just about everything we looked at, they were superior.
“It comes down to accountability. Teams don’t just do better because they’re a team. Advisors who work together in a practice are more likely to hold one another accountable when running a good, successful business.”
To measure the effectiveness of teams, PriceMetrix looked at client retention as a definitive factor. Kennedy says that not only did clients work with teams for longer periods of time, but that accounts often included multiple engaged investors.
“One of the unique characteristics of teams is they are more likely to do business with joint accounts and husbands and wives - increasingly the advisor-client relationship is not a one-on-one relationship,” he says.
“There were more situations where multiple active members of the household are interacting with the advisor and the fact that our data suggested that couples are more likely to work with a team was interesting as well - it speaks to the fact that people communicate in different ways and if you’re part of a team, there are more ways to interact with that client.”
He adds that clients with a greater amount of assets invested tended to seek out advisor teams who could provide greater specialized expertise for a more complicated portfolio.
“They’re going to be more concerned about the stability of their advisor and teams are an enticing way to address those concerns,” he says.
Kennedy says that while there are benefits for firms of any asset level to team up, they tend to do so most when their books hit the $150-million mark. However, he adds, there’s no reason for advisors to wait for that growth before taking the plunge.
“The best time to plant a tree is 20 years ago – advisors shouldn’t be waiting to grow to a certain size before teaming up, it’s something that can provide benefits at any asset size,” he says, adding that it’s often fear that prevents sole practitioners from going into business with others.
“In my experience in working with advisors, it usually comes down to fear of the unknown and the risk involved with marrying your practice with someone else’s. A lot of people see that as easy to enter into and difficult to get out of and that’s a fair perception.”
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The Teams in Retail Wealth Management report by analytics software firm PriceMetrix found that multiple advisors working together outperformed lone wolf practitioners – in nearly every area.
“It was difficult for us to find any area, statistically speaking, where teams underperform sole practitioners,” says Chief Customer Officer Patrick Kennedy. “In just about everything we looked at, they were superior.
“It comes down to accountability. Teams don’t just do better because they’re a team. Advisors who work together in a practice are more likely to hold one another accountable when running a good, successful business.”
To measure the effectiveness of teams, PriceMetrix looked at client retention as a definitive factor. Kennedy says that not only did clients work with teams for longer periods of time, but that accounts often included multiple engaged investors.
“One of the unique characteristics of teams is they are more likely to do business with joint accounts and husbands and wives - increasingly the advisor-client relationship is not a one-on-one relationship,” he says.
“There were more situations where multiple active members of the household are interacting with the advisor and the fact that our data suggested that couples are more likely to work with a team was interesting as well - it speaks to the fact that people communicate in different ways and if you’re part of a team, there are more ways to interact with that client.”
He adds that clients with a greater amount of assets invested tended to seek out advisor teams who could provide greater specialized expertise for a more complicated portfolio.
“They’re going to be more concerned about the stability of their advisor and teams are an enticing way to address those concerns,” he says.
Kennedy says that while there are benefits for firms of any asset level to team up, they tend to do so most when their books hit the $150-million mark. However, he adds, there’s no reason for advisors to wait for that growth before taking the plunge.
“The best time to plant a tree is 20 years ago – advisors shouldn’t be waiting to grow to a certain size before teaming up, it’s something that can provide benefits at any asset size,” he says, adding that it’s often fear that prevents sole practitioners from going into business with others.
“In my experience in working with advisors, it usually comes down to fear of the unknown and the risk involved with marrying your practice with someone else’s. A lot of people see that as easy to enter into and difficult to get out of and that’s a fair perception.”
Related stories:
Advisors come clean on compensation
Advisors are all baby-boomer’d out
