One method for building long-term sustainable business value is to grow your firm by building a team-based organization.

The team-based approach includes sets of teams that are led by a single senior advisor or Principal (see Chart 1).

The senior advisor is responsible for overseeing the client relationship, setting the strategic direction of the relationship and the investment policy, as well as managing the team and new business development.

Junior advisors are responsible for direct client contact and day to day servicing of the client along with financial and investment plan development.

By creating these specific job roles and definitions, a career path has been created and new people joining the firm know what it takes to move up, such as number of years in the role, advanced degrees and certification (CFP, CFA, etc.) required, as well as the ability to generate new business.

Senior advisors who desire to move into the Principal or Owner roles have set buy-in schedules and commitments along with other requirements, similar to how law, accounting and consulting firms admit new partners.

By establishing this more formalized organizational structure, you have built in an internal succession plan, whether you choose to sell internally or externally. Additionally, you will have increased the overall value of your business as the continuity that has been established through the team-based structure will provide a much higher likelihood of clients staying with the business through any transition.

Chart 1



Considerations for this approach:

Do you have the ability and appetite to grow your firm to a larger scale?

Are you willing to share ownership with others?

Are you interested and committed to developing your staff?