Bank advisors who work in teams are sweeping up a good chunk of the assets banks have under management, according to research from Cerulli Associates.
Bank advisor teams command an estimated $243.2 billion in assets under management, or 39% of all assets in the channel. Thats pretty good, considering that only 17% of bank advisors work in teams, says Cerulli.
We are seeing advisor teams become more common, says Bing Waldert, director at Cerulli Associates, noting that the prevalence of such teams is intensifying across all distribution channels. Were seeing advisors specialize more and more in terms of how they practice and the client that they target, Waldert added.
When viewed from a wider perspective, advisor teams are indeed notable. Advisor teams across all channels have an estimated $5.4 trillion in AUM, or 42% of the financial advisory industrys assetsall controlled by a mere 14% of advisors. These large advisor teams have been net winners post-crisis and successful in winning additional client assets, Cerulli writes in its report, Advisor Metrics 2013: Understanding and Addressing a More Sophisticated Population.
Cerulli defines these so-called mega teams as having more than $500 million in investable assets. The teams include multiple advisors and professional staff, each focusing on specific disciplines, such as financial planning, investment management and business development. They typically include investment staff, according to Cerulli.
Ed Mora, leader of Bank of the Wests Orange County, Calif., market, oversees a team of 17 advisors and professional staff that manages $790 million in assets. The team includes six private client advisors, whose primary role is business development, as well as wealth financial advisors, senior portfolio managers, senior trust officers, client service officers and a private mortgage banker.
We have these dedicated experts, Mora says, to build a team around a client.
The benefit of working in a team is that it allows advisors to specialize in areas they like best, deepening the services they provide as a whole. Advisor teaming, when done correctly, allows advisors to deconstruct the various elements of their profession and ultimately focus on the parts where they are most skilled and which they enjoy most, Cerulli writes in the report.
Dan Kerrigan, a principal in a five-person advisor team at The Investment Centre at Commercial Banking Company, a small privately held community bank in Valdosta, Georgia, affiliated with Cetera Financial Institutions, agrees. He and his partner, Jeremy Davis, both former wirehouse advisors, formed the team in January 2007 to achieve a better work/life balance and bring a more rounded service offering to their clients.
We both wanted a different quality of life not only for us but for our clients Kerrigan says. In order for us to give the attention that our clients require and also our families require, we needed to delegate the responsibilities of a financial planning practice.
Kerrigan noted that the ability to specialize leads to a better overall experience for clients. Anytime you can specialize, instead of be a generalist, I think that thats a better overall client experience, he says.
Kerrigan and Davis, who both serve as relationship managers, split their areas of expertise. Kerrigan handles alternative investments and annuities, while Davis focuses on investment management. The team includes a portfolio manager, an insurance specialist, and an administrative assistant.
While working in a team has many benefits, it does create some challenges, says Kerrigan. Anytime you take three Type- A personalities and put them in a group of five, you have to be willing to be the co-pilot at times, says Kerrigan.
The team has $175 million in assets under management, far from the $500 million that Cerulli defines as a mega team. But the fledgling team has high hopes.
When you talk about $500 million teams were on our way, says Kerrigan, noting that he and his partnerboth in their 30sare still fairly young. I assure you well get there.
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