A recent survey by Fidelity Investments shows that advisors who are members of teams make significantly more money than those who operate solo.
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Advisors in teams make an average of 32% more than their solo counterparts. Teams also manage almost double the amount of client assets—about $86 million versus $45 million for solo practitioners.
That may be a given since teams have multiple advisors combining their assets. But the figures yielded by the study show hard data for the first time that teams have a significant earning and effectiveness advantage.
Teams collaborate to grow their businesses, tend to network more and also drop clients who are not profitable.
Yet teams are still in the minority with only 13% of advisors working as a team in a formal partnership. Solo practitioners make up 52% and the other 35% work in teams with certain clients but otherwise operate solo.
RIAs are the most common home for advisory teams. Regional brokerages and independent broker-dealers have the fewest numbers of teams.
Firm environment has a great deal to do with team success. With solid data
that teams produce more, more independent broker-dealers and regional firms may up their support for team formation.
Right now, as in the family office and other areas of industry growth, RIAs have a distinct advantage, not only with their flexibility but also with the advantage of being in the forefront of developing trends.