https://www.pricemetrix.com/new-research-from-pricemetrix-finds-advisors-working-in-teams-attract-more-affluent-clients-generate-higher-revenues-and-grow-faster-than-sole-practitioners-report-further-shows-team-advisors-have-d/

PriceMetrix

New Research from PriceMetrix Finds Advisors Working in Teams Attract More Affluent Clients, Generate Higher Revenues and Grow Faster Than Sole Practitioners; Report Further Shows Team Advisors Have Deeper Client Relationships

October 6, 2015, Toronto, ON – A new Insights report from PriceMetrix, the industry leader in practice management analytics software, documents what many have surmised: advisors working in teams outperform sole practitioners. They attract more affluent clients. They manage more money. Their revenue is higher and they are more productive. PriceMetrix reports the average team advisor manages $130 million in assets compared to $110 million for the typical solo advisor and generates $950 thousand in revenue versus $830 thousand.

“There’s a reason the number of advisors working in teams has increased 25 percent in just the last three years,” said 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 percent, now work in some type of team arrangement.”

Combing its proprietary database of more than 40,000 advisors, seven million retail investors, 500 million transactions and over $3.5 trillion in investment assets, PriceMetrix uncovered several reasons advisors working in teams perform better than their solo counterparts.

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. Team advisors also 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 for the typical sole practitioner client. Thirty-eight percent of clients in the average team managed portfolio have less than $250 thousand in assets versus 43 percent for solo advisors. Teams are also more likely to charge on a fee basis, with 40 percent of their assets fee-based compared to 34 percent for sole practitioners.

PriceMetrix also finds that teams tend to build deeper relationships with their clients than sole practitioners. They manage 3.3 accounts per household versus three for the average solo advisor and they have a somewhat higher percentage of clients with a retirement account, 74 percent compared to 72 percent. They are also more likely to work with couples within a household than a sole practitioner. Forty two percent of the average team advisor’s clients are couples versus 39 percent for the typical solo advisor. Team advisors also manage more hybrid relationships, in which clients have both fee and transactional accounts, with 31 percent compared to 24 percent.

Given all this, it is perhaps not surprising that team advisors have higher Revenues on Assets, or RoA, across all asset levels. For example, the average team based advisor has an RoA of .92 percent for clients with $500 thousand to $1 million in assets, compared to .89 percent for the typical solo advisor.

“Teams grow faster than sole practitioners, not because of a division of labor or some magic of ‘synergy,’ but because they do the fundamental things that drive growth,” commented Mr. Trott. “They manage fewer accounts. They create deeper relationships and they are more likely to become the primary financial adviser for their clients.”

From 2013 to 2015, advisors in teams grew assets by an average annualized rate of 7.9 percent and revenues at a rate of 9.1 percent. Sole practitioners, on the other hand, grew assets and revenue at 7.1 percent and 8.3 percent respectively. Not only did teams experience eleven percent faster asset growth and 17 percent faster revenue growth, they achieved these results off of a larger asset and revenue base.

“Certainly nothing prevents a solo advisor from concentrating on the fundamentals to grow his or her business,” said Mr. Trott, “but team members seem more likely to hold each other accountable and to have greater discipline focusing on the things that matter.”

Timing is not really an issue for advisors considering joining or establishing a team, since PriceMetrix’ data show that team advisors grow faster than solo advisors at all asset levels. However, the data does reveal a ‘sweet spot’ where team growth is most pronounced compared to sole practitioners. Advisors at or approaching $150 to $200 million in assets will grow on average 9.3 percent as part of a team compared to 7.3 percent practicing alone.

About PriceMetrix

PriceMetrix is the first choice in practice intelligence solutions for retail brokerages in North America. We help wealth management firms enhance revenue growth, by enabling advisors to identify and action otherwise lost revenue opportunities. By combining industry know-how with powerful aggregated market data, we help our clients increase overall firm profitability.

PriceMetrix directly measures aggregated data representing 7 million investors, 500 million transactions, 1.6 million fee-based accounts, 7 million transactional accounts and over $3.5 trillion in investment assets. PriceMetrix combines its patented process for collecting and classifying data with proprietary measures of revenue, assets, and households to create the most insightful and granular retail wealth management database available today.

Founded in 2000 and headquartered in Toronto, Ontario, we service a notable range of retail wealth management firms within the United States and Canada. To learn about why our clients love us, please visit www.pricemetrix.com or call and email us at 1-866-955-0514 and info@pricemetrix.com.

Media Contacts

Jon Teall

212 317-8296

jteall@teallassociates.com