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It takes a village: The value of collaborative adviser communities

Increasingly complex investor demands are driving the need to develop strong communities

Jun 7, 2019 @ 2:09 pm

By Michael Kim

As demographic trends shift and a decade-long bull market accelerates investor wealth, financial advisers are faced with increasing pressure to address the changing needs of their clients.

The last 10 years have generated more wealth among investors than any other point over the past few decades — but with this spike in wealth comes additional complexities in managing funds and establishing clear financial goals. Changing demographics have also translated to increased demands on advisers — from advising on asset allocation models and manager selection to elder care goals, small business valuation issues and legacy planning for clients.

To tackle the complex issues brewing in the industry, a collective brain trust is needed to bring diversity of thought and expertise. A Cerulli study reveals that only 60% of advisers work in a team, and just one-third of those collaborate when making decisions.

To be most effective, advisers should be part of a team of specialists who understand client issues and work collectively to deliver holistic solutions. By understanding the importance of professional networks and creating communities to share different perspectives and collaborate on industry trends, advisers will be better positioned to address the challenges of today's evolving financial climate.

(More: Leading to last: Growing an advisory firm so it will continue on)

Adviser communities matter

Increasingly complex investor demands are driving the need to develop strong adviser communities. Successful financial adviser practices frequently follow an "ensemble model," where a lead adviser oversees a group of junior advisers, supported by a team of functional experts.

(More: The 'Ensemble' approach to running a firm)

When advisers come together to share their insights, it enables the collective group, and by extension each individual member, to gain a holistic view of the issues their clients face.

A successful adviser network may include an insurance professional, certified public accountant, estate planning attorney, investment or commercial bankers, business valuation specialists, real estate agents and many others who bring their specific insights to help advisers address the varying needs of their clients.

In this way, advisers are like financial quarterbacks, bringing together a brain trust of specialists to deliver comprehensive knowledge to client engagements.

Developing adviser communities

Before establishing effective collaborative networks, financial advisers need to identify the particular issues they're looking to address or the gaps in knowledge they're looking to fill.

There's a wealth of education- and communication-based platforms that advisers can leverage, including conferences, webinars, and LinkedIn groups. These forums are designed to help facilitate rich conversations and dialogue among advisers, as well as encourage long-lasting connections that advisers can draw on for future advice and information.

Advisers might consider starting their search for a professional community by looking at the individuals who already work with their top clients.

Being active in financial adviser communities can better position advisers to deliver the holistic financial advice that today's investors seek. By drawing on the experiences of others, advisers can gain a greater understanding of their own clients' financial needs and strengthen their abilities to meet ongoing shifts in investor demands.

It takes a village to address investor needs, so begin that conversation, join that discussion forum, attend that conference, and be opportunistic — now is the time.

(More: Tips for taking year-end client meetings to the next level)

Michael Kim is executive vice president and chief client officer at AssetMark Inc.

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