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Practice Management, Teaming Support Need to Expand

While practice management and “teaming” have always been important components of advisor support, a new report suggests they will be even more important in the years to come.

According to The Cerulli Edge – U.S. Edition, May 2016, advisory practices view teaming as an important means of attracting and grooming the next generation of talent, and that practice management support is critical to help advisors onboard rookie advisors.

Cerulli notes that advisor and client demographic challenges will lead to capacity constraints that could weigh heavily on advisors, in that advisors need support to segment their clients, design service models, and automate core processes via technology.

The report notes that practice management professionals play a key role in helping advisors think strategically, rather than tactically about their growth strategy. Moreover, by pooling their resources, multi-advisor teams are adding specialized roles, and, as a result, offering broader and deeper service menus that better meet the complex needs of affluent clients.

Trends Shifting

The Cerulli report explores a number of key trends that could shape and influence these developments, including:


  • Shrinking headcount among advisors: Advisor headcount grew in 2014 by a modest 1.1%, the first expansion seen in nine years. That said, advisor retirements are expected to grow during the next five years as the field grows older. Indeed, by 2020, Cerulli believes that a sizeable uptick in advisor retirements will trump modest headcount gains.

  • Clients are aging: Advisors will need to shoulder higher service needs from older clients dependent on their investments as a source of income, while simultaneously experiencing shrinking income strings as those same clients draw down their assets during the retirement distribution phase.

  • A struggle to attract younger clients: Not only are “robo” advisors targeting younger generations of investors, direct channel providers have also used their roles as defined contribution recordkeepers to win rollovers from their existing 401(k) participants.


Retirement regulation will impact individual retirement account (IRA) rollovers: While Cerulli believes that rollovers to advisors, particularly when there is an existing relationship, will be the least impacted by additional regulatory scrutiny. Additionally, those investors will likely value the holistic view of the advisor relationship versus the potential fee savings of staying in their former employer’s plan. On the other hand, rookie advisors will struggle to win IRA rollovers if legislation looks favorably upon assets being left in plan.

Emerging Needs

As a result of these challenges, Cerulli anticipates four key practice management needs will emerge:


  • Advisors will begin to hire more service-oriented advisory roles to help boost the capacity of a practice’s senior advisors.

  • Advisory firms will support fewer, wealthier clients.

  • An emergence of large advisory teams with specialization and centralization.

  • A growing emphasis on segmentation, service models, and technology.

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