You’ve been an accomplished solo financial advisor for years, working hard and building a successful practice at the wirehouse where you’ve been employed for, perhaps, your entire career.
Yet something’s missing. Often, that “something” is “somebody”: a business partner.
Team-based practices have been a trend at wirehouses for a number of years. But now these firms are encouraging them even more as a way to help guide clients through the increasingly complex financial landscape — and as a strategy to keep assets in-house: teams leave less frequently than solo practitioners because all partners must agree to the move, says Mark Elzweig, an executive recruiter whose eponymous company is in New York City.
Compared to other channels, wirehouse advisors are more likely than other FAs to operate in teams, according to 2015 research conducted by Cerulli Associates. The research and analytics firm forecasts that by 2020, partnerships at wirehouses will rise to 30% versus 20% in the IBD channel and 24% of advisors overall.
The trend that’s picking up steam within big-firm teaming is the super- or mega-team — large groups of multiple advisors, both senior and junior, backed up by plenty of support staff.
Such teams often start out with just two solo FAs. In many instances, they are well-established, even veteran, advisors who are equally successful. Indeed, “horizontal” teams of seasoned FAs, as opposed to “vertical” teams — large producer at top, junior FAs below — are on the increase.
“We think the teaming model around veteran financial advisors, in particular, can yield an ideal client experience,” says Kimberly Ta, senior vice president-director of teams and succession planning at Wells Fargo Advisors, based in St. Louis. The firm supports new teams with coaching and programs on how to set up infrastructure to facilitate a joint practice.
Merrill Lynch is similarly as enthusiastic about teams of established FAs. “Some of our most successful advisors have joined together to form teams. We have fully embraced teaming because we think it helps us serve clients better in a 24/7 world,” says Racquel Oden, Merrill’s managing director-head of advisor training and development.
Finding a Partner
Successful advisors comprising a horizontal team can be as young as two twenty-somethings. Other partnerships pair veteran middle-aged FAs or an older advisor with an accomplished decades-younger FA.
More than a decade ago, Reed Yates was a mid-level producer at a Wells Fargo Advisors predecessor in Fort Worth, Texas, whose partner had exited the firm. Yates was looking for another FA with whom to team. Mark Maness fit the bill.
“I knew I needed a partner who was capable of pushing me a little bit, and Mark seemed like the ideal candidate,” recalls Yates, 70, first vice president-investment officer.
Working in the same branch, Maness had observed Yates long enough to know that the two shared a common work ethic. Further, what they brought to the advisory table was complementary: Yates was heavy into market analytics; Maness, strong on interpersonal communication.
“I wasn’t actively seeking a partner; but when Reed came to me and we talked, it was an easy decision to say yes. I could see great opportunity for us to leverage our skill sets,” says Maness, 59, managing director-investment officer, whose production at the time was in the same range as Yates.
Now, 12 years after they partnered, and added two younger FAs, the Maness-Yates Wealth Management Team of Wells Fargo manages assets totaling more than $300 million.
At the outset, it is essential to nail down a clear vision of how your partnership will function and develop a corresponding business plan.
Exemplary of such foresight and organization is the team of Hansberger & Merlin at Morgan Stanley. Atlanta-based, it is pioneering the concept of an RIA inside the wirehouse as a compelling approach to practice management. The two FAs joined up four years ago.
Jim Hansberger, 70, an MS advisor since 1979 and team head for several years, wanted to find an accomplished, but younger, team leader with whom to partner.
“Michael [Merlin] was only 37, but he had extraordinary experience and success,” says Hansberger, managing director-wealth management and senior portfolio managing director.
Merlin, who had joined [Morgan Stanley predecessor] Smith Barney in 1997, and was running his own team, knew he needed scale. Both advisors were determined to build a super-team. Here was an ideal potential match.
“We were very much aligned with the idea of creating a firm within a firm,” says Merlin, 41, managing director-family wealth director.
Today, their team of 17 manages assets of $2.5 billon.
“We’re a comprehensive wealth management platform with a proprietary investment management entity embedded within it,” Hansberger explains. “We’re very much focused on being the preeminent wealth management practice, not only at Morgan Stanley but in the industry.”
A key challenge facing ex-solo FAs is how to best introduce their new partner to clients. Some hold special events, where both client bases can mingle and hear what new products and services the team has to offer. Beyond that, partners must accustom their clientele to being served by a second FA.
“We made a concerted effort to reach out to each other’s clients and in some instances, almost forced them to talk to the other advisor,” Maness says.
Therein lies “the real benefit of the teaming process,” Maness continues. “Although both Reed and I can give the same message to the client, it may come across differently in our presentations; and one presentation might resonate better with a particular client than the other.” Hence, “we began to uncover more assets our clients had, and they began bringing them over.”