The ongoing growth of financial advisory businesses over the past decade, when combined with the shift to ongoing recurring revenue models (from assets under management to monthly subscription fees), has led to more and more advisory firms accumulating a critical mass of clientele that requires them to expand their capacity by shifting from the ‘solopreneur’ advisor model into forming an advisor team. The appeal of the team model is the potential to both improve operational productivity through delegation of tasks, expand service with a broader range of expertise, and train and develop next-generation financial advisors in the business. At least, if the advisor team can actually function effectively… as in practice, it’s not enough to simply form the team, it’s also important to ensure it’s the right kind of team to accomplish the business goals of the firm, and that the team develops the skills necessary for it to function successfully!

Because the good news is that, with the right design and training, an Operational Advisor Team can function to increase revenue productivity, an Expertise Advisor Team can offer a wider range of professional services for clients, and a Development Advisor Team can cultivate a deeper talent pool for the benefit of the firm’s future. However, because those teams require different designs and training for each, it’s first necessary to identify the specific bigger-picture goals that are most important to the firm, to ensure the firm selects, optimizes, and fully leverages the team’s structure and training protocols to suit their purpose more appropriately. In other words, by first considering the benefits and challenges inherent in each type of Advisor Team, firms can optimize their team designs to fulfill their desired purpose.

Operational Advisor Teams function mainly to increase revenue productivity and operational efficiency by establishing work roles (e.g., back-office paperwork, scheduling, financial plan research and preparation) that support advisors, allowing them to maximize their facetime with clients. Yet, an effective Operational Team generally requires team members to work together seamlessly and to rely on the work products of their co-workers. Accordingly, the primary challenges for Operational Advisor Teams are developing trust among all team members, and establishing accountability standards through the development of training protocols that ensure the team knows what and how to do the work that is expected of them. Providing opportunities for autonomy can help team members develop trust with other team members, and even assigning team members themselves to create training protocols can encourage a culture of trust and accountability.

Expertise Advisor Teams provide clients with more of a ‘one-stop-shop’ experience for their financial planning needs, and include multiple advisors across different areas of expertise (e.g., CFPs provide comprehensive financial planning, CPAs run tax analyses, CFAs oversee client portfolio management, and estate attorneys identify estate planning strategies and create appropriate legal documents). The main challenges for these teams revolve around composition and communication. It is critical to identify the specific services to be offered so that the right set of experts are selected for the team. Furthermore, the importance of establishing (and reinforcing!) good communication protocols will be important, especially with a team of experts, to ensure that messages delivered to clients remain professional (e.g., ensuring that team members are courteous and respectful to clients… and to each other, even when they professionally disagree!) and uniform (e.g., getting all team members on the same page with respect to client strategy, despite different expert opinions that may conflict with one another). Thus, developing good communication skills within the team by holding meetings to review client strategies in advance, rehearsing conversations through roleplay exercises, and, when hiring new team members, will ensure that all members of the team understand the reason in order to maintain positive morale.

Development Advisor Teams foster new and rising talent in the firm with a focus on investing for the firm’s future talent pipeline, whether the reason is to support succession planning needs, to offer more vacation time, or to deepen the firm’s next-generation talent pool. For Development Advisor Teams, one of the main challenges lies in establishing training programs, which can be both time- and labor-intensive. Delegating to less experienced team members is another challenge, which can be emotionally difficult for more seasoned team members who may be struggling with the idea of retirement or moving on to different roles, and mentally challenging for those who must remember that tasks which are easy for them (that they have carried out routinely for many years) can be complex and potentially difficult to master for newer team members who need detailed instructions. Yet, in order to develop effective training programs and to delegate the right tasks to the right individuals, it is important to crystallize the specific goals of the company.  Accordingly, by setting goals that are SMART (Specific, Measurable, Achievable, Realistic, and Timely), firms can design Development Advisor Teams that meet their specific objectives.

Ultimately, the key point is that there are different types of teams that advisory firms can develop, and choosing the right type of team will depend on what is most important to the firm and what overall goals the company has. But with a clear understanding of the ideal type of team that can fulfill the advisory firm’s goals, it’s possible to tackle the unique challenges that each type of team commonly faces, and advisory firms can target specific solutions to help their teams thrive while meeting organizational goals!

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Historically, financial advisors have worked with any and every client they could (or at least, any client who was interested in buying their company’s products or could afford to pay their fees), and in turn, advisor websites (and other marketing collateral) were developed to be appealing to anyone and everyone. The caveat, though, is that in an increasingly competitive advisor landscape, it is more and more difficult for advisors to differentiate themselves amongst a sea of sameness, leading to an increasing focus on developing niches and specializations as a way to stand out and attract ideal clients. Except for advisory firms that have already built a broad-based “generalist” clientele, creating a more focused niche offering – and updating the advisor’s website and other marketing materials accordingly – can make existing clients who may not fit the advisor’s more specialized future question their own fit with the firm today. Which raises the question: how exactly can an advisory firm start to focus more on their niche specialization of the future, without alienating existing clients in the process?

The starting point of making a firm’s marketing more niche-focused – without alienating existing clients – is simply to recognize how ineffective most generalist-based advisor marketing is today. Because in practice, most advisory firms struggle to get more than a few hundred visitors to their website each month, and even amongst those visitors, few get more than 1-2 prospects per month from their website (and many get none at all!). Which means, ironically, that by trying to avoid alienating any existing clients or prospects by being so broad-based, the firm is already losing out on most or all prospects who visit their website. By contrast, “just” having a message that connects with a mere 1% of prospects – with several hundred website visitors each month – could actually produce 3 qualified leads every month. Which means the approach doesn’t alienate… it’s actually a significant improvement from the status quo!

In the process of actually becoming more niche with an advisor’s marketing, there are several factors to consider, depending primarily on the size of the existing firm, how many advisors it has, and how focused it already is (or not). For solo advisory firms, the reality is that once the founder/owner/advisor decides to go niche, that’s all the buy-in it takes, and solo advisors who want to get started simply have to choose whether they want to rebuild their current website into their new niche, or alternatively create a “microsite” that is separate from their existing website, target that very specifically to their niche, and over time as their new niche grows, shift to make the new niche-focused site their primary business website over time (while keeping their existing website to avoid making existing clients feel alienated).

When it comes to larger multi-advisor firms going niche, though, determining a niche often requires consensus from multiple advisors willing to narrow their focus and excel in one area. If the multi-advisor firm can come to a consensus, the firm can begin to rebrand accordingly. More often, though, multi-advisor firms end out with multiple niches – rather than choosing just one – which requires the firm to adopt an approach more akin to regional law or accounting firms, which create “Practice Leaders” to lead each niche within the firm, and the firm’s website then highlights its list of specialized “Practice Areas” (not just a list of all types of clients, but a menu of dedicated services each specifically crafted for a particular type of client, with a dedicated Practice Leader with specialized expertise to lead it). Alternatively, for firms that can’t even decide or commit to a particular group of niches – or even whether to niche, because some advisors wish to and others don’t – a multi-microsite approach is more effective, where each advisor specialization creates its own microsite targeted to its own clientele, as a standalone offering “Powered By” the parent firm.

Ultimately, the strategic shift of becoming niche is not an easy or simple one—gaining marketing momentum, experience, and trust takes time. However, transitioning into a niche can – and often is –accomplished incrementally anyway, precisely because it takes time to be known, liked, and trusted in a new area of specialization. And the framework of developing Practice Areas and/or microsites allows advisory firms to make the transition as gradually as they want or need to. Though ironically, the reality is that for firms that already serve their clients well, the risk of alienating existing clients with a new niche focus is low, as in practice it’s more often the clients who are concerned about whether they will be rejected by the firm, and upon being told of the new niche focus, won’t declare they’re leaving and instead will simply ask “will we still be allowed to keep working together, too?”

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