Advisors working in teams outperform sole practitioners. They attract more affluent clients, manage more money, have higher revenues and are more productive overall, finds a PriceMetrix report. In fact, the average team advisor manages $130 million in assets and generates $950,000 in revenue, compared to $110 million and $830,000, respectively, for a solo advisor.
“There’s a reason the number of advisors working in teams has increased 25% in the last three years,” says Doug Trott, president and CEO of PriceMetrix. “They perform better and advisors and their firms understand that. More than half of all advisors, specifically 55%, now work in some type of team arrangement.”
Also, team advisors work with fewer clients. On average, they work with 130 clients compared to 140, allowing them to spend more time with each client and deliver more value.
And team advisors manage larger accounts and have fewer small households in their books. The average team-served client has $1.1 million in investment assets versus $880 thousand, finds the report. Teams are also more likely to charge on a fee basis, with 40% of their assets fee-based compared to 34% for sole practitioners.
Also, team advisors:
- manage 3.3 accounts per household, versus three for the average solo advisor;
- have a higher percentage of clients with a retirement account (74% compared to 72%;
- are more likely to work with couples than a sole practitioner (42% versus 39%);
- manage more hybrid relationships, in which clients have both fee and transactional accounts (31% compared to 24%);
- have an average RoA of .92% for clients with $500 thousand to $1 million in assets, compared to .89%;
- grew assets by an average annualized rate of 7.9% and revenues at a rate of 9.1%, versus 7.1% and 8.3%, respectively; and
- experience 11% faster asset growth and 17% faster revenue growth.