Trends in high-performing financial adviser teams

The question I’ve been asked most frequently over the last year is what the pandemic’s lasting impact will be on the wealth management industry. I believe the pandemic has merely accelerated trends that were underway long before Covid. These trends will have an even greater effect on how financial advisers engage clients, deliver advice and conduct their business.

The future of wealth will see larger, more diverse alliances, with chief operating officers managing the business, financial advisers spending more time with clients, team members investing significantly in social media and “family office” levels of client service the norm.

These were among the key trends found in a comprehensive study of more than 2,500 adviser teams conducted recently at Morgan Stanley. We believe the results may apply across our industry as we emerge from the pandemic and embrace new processes in a changed world.

Here are the emerging patterns our study disclosed.

“Mega teams” are the future. The days of two-person teams appear to be fading. The fastest growing segment of the population is “mega teams” — five or more advisers working together. Sole practitioners and smaller teams are coming together to make these larger teams. They then focus on capacity and scale to serve clients better — and expand client outreach. 

Diversity is critical to next-generation growth. Next-generation business is crucial. As our adviser population ages, succession planning is fast emerging as a key driver of teaming. Adding race, age and gender diversity becomes vital for advisers of the next generation to reach next-generation clients. This business case for a diverse team is clear. 

Teams are less bound to the office. Clients are more geographically diverse these days and so are the advisers who serve them. There will be less reliance on brick-and-mortar offices. We see the emergence of team members residing around the country – a trend no doubt accelerated by the work-at-home requirements of Covid-19 protocols.

Team leadership is “professionalizing.” Leadership across high-performing teams once focused around a few senior advisers. An emerging trend is the chief operating officer or business manager role, someone who runs the practice while senior advisers connect with clients and prospects. Senior advisers are briefed on important developments in the practice, but are not running the office.

Teams will create a strong virtual presence. As clients and prospects move to a more virtual world, advisers are moving there too. In the past, teams expended minimal effort in the digital space and still were successful. But this is changing as remote computing and Zoom continue to grow in prominence. Teams are taking advantage of virtual training sessions for advisers and clients alike. The top teams we studied are better prepared for the transition to a more virtual, remote computing world.

Teams will specialize and partner. Cultures of strategic partnering will continue to build at many firms. In that context, high-performing teams will develop clear areas of specialization. They will make themselves more accessible both locally and nationally for partnering opportunities that match their strengths. At the same time, they will be quicker to partner with other specialized advisers when opportunities require skills supplemental to their core strengths.  

Teams will further leverage technology and new analytical tools. Planning-based, fully digital online wealth management tools are becoming central to the execution of great wealth management. High-performing teams will adopt such tools and continue to implement more modern wealth practices to help scale and grow their business. Going forward, top teams will demand even more advanced tools and resources as they shift their client service model to something far beyond anything this industry has known to date. Indeed, this one trend may redefine our industry for years to come.

A family office feel defines client service. Teams will need to deliver the full services of the firm to clients in a disciplined, scalable and intimate fashion that creates a genuine family office feel. The adviser/client relationship has become more personal than ever, and the ability of teams to deliver an experience that reflects a deep understanding of each client will be crucial.

Business-related travel will be far more selective. In the aftermath of the virus and the industry’s migration to a virtual world, many top teams appear well on their way to substituting what used to be mandatory in-person client meetings with Zoom meetings, reducing both the amount and nature of business travel. Client visits will become much more personal in nature, with less of a focus on classic wealth management, and more on understanding client needs through a strong relationship.

High-performing teams are investing more in their business than ever before. Teams realize they must do whatever it takes to remain on the cutting edge with their client service model. This means investing in new professional designations, more people resources, and the additional resources necessary to deliver a complete wealth management experience.

While these are the clear trends we see at Morgan Stanley, we believe they may apply to advisers everywhere.

There is no “one size fits all” template for success. There are many variants. However, there are certain shared qualities in all successful approaches. Teams demonstrate different ways of molding their unique practice to include these shared qualities, in a way that authentically represents their vision. In the process, they begin realizing their full potential.

The mission of wealth management executives is to support advisers via rigorous system development, social media support and access to service and products that deliver the full capabilities of the firm to the clients. We’re confident the trends are positive for all wealth management firms and clients.

Sterling Shea is managing director and head of practice strategy at Morgan Stanley Wealth Management.