DENVER--(BUSINESS WIRE)--The Investments & Wealth InstituteTM, in collaboration with Janus Henderson Investors, announced research findings from their “High-Performing Advisor Teams” study today, which explores the advantages of working in a team and the distinguishing factors of the most productive teams.
The research study, conducted by Cerulli Associates, analyzed 2,800 practices operating across both solo and team-based models. Study participants included advisors operating in branch networks (wirehouse and national/regional broker dealers) and independent channels (independent broker dealers, RIAs, and hybrid RIAs). Teams were ranked by assets under management (AUM) per producing advisor, AUM per total headcount and average client size, and were then segmented into quartiles based on overall performance. These factors were crucial representations of an advisor’s ability to attract and retain clients, as well as the team’s overall efficiency, ability to scale its practice and success attracting high-net-worth (HNW) investors.
Key findings from the study include:
- More than 60 percent of advisors work in a team, while only one-third collaborate in their decision-making processes. Shared decision-making could be a lost opportunity for some practices, with teams sharing in the decision-making process overseeing more AUM.
- The top-quartile teams have a broader mix of advanced credentials and are 1.5 times more likely to hold a CIMA or CPWA compared to peer firms.
- The industry’s largest advisors with $100 million or more in individual AUM are more likely to operate in a multi-advisor team.
- Over 60 percent of advisors with $100 million to $250 million in AUM operate as a team, as do 77 percent of advisors with $250 million to $500 million in AUM, and 90 percent of advisors with $500 million or more in AUM.
- High-performing top quartile teams substantially outperform other quartile teams, managing 4.2 times the AUM per advisor compared to their peers, excluding junior advisors.
- Nearly two-thirds of clients in top-quartile teams have $2 million or more in assets.
- The average advisor in a top-quartile team manages $280.4 million in AUM compared to $67.3 million for peer teams.
“Extraordinary teamwork is crucial for delivery of a remarkable client experience and to the success of an advisor practice in today’s dynamic wealth management industry,” says John L Evans Jr, Ed.D., Executive Director of Janus Henderson Labs. “These research findings reinforce the critical value of advisor teams in driving stronger trust, management responsibility and growth.”
Specialization and deeper expertise characterize top performing teams
When analyzing top-performing teams, several distinguishing factors emerged in regards to specialization and advanced education:
- Top-quartile teams offer an average of 3.8 HNW services compared to 3.2 for peers.
- Over half (52 percent) of top-performing teams hire specialized staff roles, compared to 37 percent of peer teams.
“At the Investments and Wealth Institute, we believe professional development is key to advisors’ success,” said Sean Walters, CAE, chief executive officer, Investments & Wealth Institute. “The results of this study further demonstrate the real connection between advanced knowledge and practice outcomes. High performing teams that continuously invested in the technical depth of their advisors broadened their service delivery and won new clients because they were better equipped to address their clients’ complex needs and objectives.”
Top-performing teams prioritize outreach and face-to-face interaction
Client service and communication were also components that set successful advisor teams apart. Nearly half (48 percent) of top-performing teams hold quarterly in-person review meetings with clients, compared to only 29 percent of peers.
Outreach methods also played at the forefront for successful advising teams. Responses showed that these successful, high-achieving teams are more likely to leverage proactive marketing and personal relationships help them to find new clients.
Teams place greater emphasis on developing the next generation
Top quartile teams value education beyond their own. Their members consist of a range of ranks, demonstrating the value placed on training the advisors and industry leaders of tomorrow. The study showed that half (53 percent) of top-quartile teams employ at least one producing junior advisor, compared to 39 percent of peer teams, and nearly half (44 percent) of top-quartile teams employ at least one nonproducing junior advisor, compared to 28 percent of peers. Additionally, in peer teams, only 27 percent of advisors nearing retirement are uncertain about their succession, and in hierarchy-based teams with multiple leaders, only 16 percent of advisors are uncertain about their succession.
Advisors interested in reading a summary of this research may do so here.
For additional information, please contact Greta Gloven, director of communications, Investments & Wealth Institute, ggloven@i-w.org or 303-850-3079, or Taylor Smith, Janus Henderson Investors, Taylor.smith@janushenderson.com or 303-336-5031.
About the Investments & Wealth Institute
Established in 1985, the Investments & Wealth Institute, formerly known as IMCA, is a professional association, advanced education provider, and standards body for financial advisors, investment consultants, and wealth managers who embrace excellence and ethics. Through its publications, events, assessment-based certificate programs, and advanced certifications, the Institute delivers premier-quality, practical education to advanced practitioners in more than 38 countries.
The Certified Investment Management Analyst® (CIMA®) certification is the peak international, technical portfolio construction program for investment consultants, analysts, financial advisors and wealth management professionals. The CIMA program is distinctive as one of only a few global certifications in financial services to meet international accreditation and quality standards (ANSI/ISO 17024) for personnel certification programs. The Certified Private Wealth Advisor® (CPWA®) certification is an advanced professional certification for advisors who serve high-net-worth clients. It’s designed for seasoned professionals who seek the latest, most advanced knowledge and techniques to address the sophisticated needs of clients with a minimum net worth of $5 million. Unlike credentials that focus specifically on investing or financial planning, the CPWA program takes a holistic and multidisciplinary approach.
The Investments & Wealth InstituteTM, IMCA®, Investment Management Consultants Association®, CIMA®, Certified Investment Management Analyst®, CIMC®, Certified Investment Management ConsultantSM, CPWA®, Certified Private Wealth Advisor®, RMASM, and Retirement Management AdvisorSM are trademarks of Investment Management Consultants Association Inc. doing business as The Investments & Wealth Institute. The Investments & Wealth Institute does not discriminate in educational opportunities or any other characteristic protected by law.
About Janus Henderson Labs
Janus Henderson Labs offers high-impact business and life-enhancing programs and specialists to help financial professionals build, grow and succeed. With time-saving solutions and expert information, financial professionals can not only survive, but thrive, by taking full advantage of the incredible opportunities the changing investment advice landscape creates.
Janus Henderson is a leading global active asset manager dedicated to helping investors achieve long-term financial goals through a broad range of investment solutions, including equities, quantitative equities, fixed income, multi-asset and alternative asset class strategies.
As at 30 September 2017, Janus Henderson had approximately US$361 billion in assets under management, more than 2,000 employees and offices in 27 cities worldwide. Headquartered in London, the company is listed on the New York Stock Exchange (NYSE) and the Australian Securities Exchange (ASX).
