The ClientWise Blog

The 5 Essential Functions of the Financial Advisory Team

Posted by Chris Holman on May 22, 2012 11:05:00 AM

Today, the industry is evolving into a new stage of the wealth management model. This evolution is driven, in part, by demographics. As Baby Boomers reach their retirement years, they have different expectations of wealth management, as compared to their parents, i.e. the Silent Generation. Not only do affluent Baby Boomers want a wealth management model that fits their busy lifestyle, they want to work with a financial advisor who can offer specific, collaborative solutions that help simplify their increasingly complex financial lives.

As the industry continues to evolve, it is clear to us that a new picture of a sustainable wealth management model is emerging.

This new wealth management model also represents a structure for how financial advisors can run their practice. In this new model, we see five essential functions that lead to a sustainable, profitable practice:


The CEO/Principal(s): the highest- ranking executive of the firm who has the responsibilities as communicator, decision- maker, leader and manager. Principal(s) are those partners in the firm that are entitled to a share of the profits of the enterprise.

Client Relationship Management: retains responsibility for all activities and interactions with existing clients. Also serves as a primary point person for a select group of clients.

Business Development: finds, attracts, and wins new clients. Builds the wealth management brand of the firm through consistent marketing and outreach activities.

Operations Management: handles the tasks dedicated to running the company, e.g. administrative duties, IT, accounting and record keeping, operations architecture, HR, compliance, etc.

Technical Competencies: provide specialized expertise that fulfills specific wealth management needs, e.g. investment management (CIMA), financial planning (CFP), financial and portfolio analysis (CFA), Certified Life Underwriter (CLU), Chartered Financial Consultant (ChFC), etc.


Common Mistakes of Team Formation

One of our observations in financial advisory team formation is the tendency to do too little, or too much:

  • Too little! At one end of the spectrum is the financial advisor who hasn’t completely embraced the changes in the wealth management landscape, and doesn’t want to deal with perceived added work of managing a small business. They are most comfortable as a solo-preneur who is responsible for all five wealth management functions. In many ways, this model is not too different from that of prior years, where the solo financial advisor did everything because they had to.
  • Too much! At the other end of the spectrum is the financial advisor who jumps into the expansive growth mode without considering the implications, assumes the CEO role, delegates everything (without much careful deliberation), hires a large team (without paying close attention to the P&L)...and goes bust!
  • Just right! Right in the middle, in the sweet spot, is the financial advisor who gets it right. As they step into the role of principal/CEO of their wealth management practice, they recognize their own strengths... and weaknesses. They build an organizational culture of accountability that allows them to go out and find the necessary talent that fills out the team. Beyond simply defining roles and responsibilities, this forward-looking financial advisor seeks like-minded advisors who embrace their vision and values, as well as complementing their own competencies and strengths.


We trust that you find this conversation helpful. For further discussion on this topic, please feel free to download the ClientWise Learning Tool below:


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ClientWise is the premier financial advisor coach focused on business development and management best practices for financial advisors.

Topics: Business and Operations Management, Leadership, Team Development