All expanding businesses face the same dilemma: how to structure their teams to be as efficient and effective as possible. Financial advisor businesses are no different. To help entrepreneurs understand how to structure a financial advisor team properly, we’ve outlined some key points below.
How Organization Structures Change Over Time
As businesses grow, their organizational structures usually change. This is because, as the company expands, the work generally increases and becomes more complex. So let’s explore how this affects financial advisor teams.
Job Titles Replace People
As businesses expand, they often replace people with job titles. For example, a financial advisor business might have one person responsible for financial planning, investments, and insurance. However, as the business grows, that person might be replaced by three people: one financial planner, one investment manager, and one insurance specialist.
As businesses expand, they also tend to form departments. Each department is responsible for a specific area of the company. For example, for financial advisor businesses, joint departments include financial planning, investments, insurance, accounting, and marketing.
Each Department Creates Multiple Levels Of Responsibility
As businesses expand, each department usually creates multiple levels of responsibility. For example, a financial advisor business might have a financial planner responsible for overall financial planning and two junior financial planners who handle specific financial planning tasks.
How To Structure Your Financial Advisor Team
Now that we’ve explored how businesses generally expand and change over time let’s focus on structuring your financial advisor team. We’ll cover creating the essential departments and adding team members as your business grows.
Create The Essential Departments
The first step in properly structuring your financial advisor team is to create the essential departments. As your business grows, you will likely add additional departments to focus on specific tasks and areas of the business.
Below are some departments that we recommend all financial advisor businesses have, no matter how large they are:
The wealth management department is responsible for financial planning, investments, and insurance. This department should be headed by a financial planner with experience in all three areas. Below the financial planner, you should have an investment manager and an insurance specialist.
The investment management department manages the financial advisor’s investment portfolios. This department should be headed by an experienced investment manager. Below the investment manager, you should have a team of financial analysts who are responsible for researching investments and making recommendations to the investment manager.
The accounting department is responsible for tracking the business’s finances and preparing financial reports. This department should be headed by a certified public accountant (CPA) with experience in financial reporting. Below the CPA, you should have one or two accountants who handle the day-to-day financial tasks of the business.
The marketing department is responsible for generating leads and promoting the financial advisor business. This department should be headed by a marketing director with experience in lead generation and marketing campaigns. Below the marketing director, you should have a lead generation specialist and a social media specialist.
The human resources department is responsible for hiring and onboarding new employees and managing employee benefits. This department should be headed by a human resources manager with experience in both areas. Below the human resources manager, you should have an HR coordinator who handles the day-to-day tasks of the department.
The operations department is responsible for managing the day-to-day operations of the financial advisor business. This department should be headed by an experienced financial advisor with knowledge of the financial advisor industry. Below the financial advisor, you should have a team of operations specialists who handle specific tasks related to the operation of the business.
Determine The Levels Within Those Departments
In addition to creating new departments as your financial advisor business grows, you will also need to determine the levels within those departments. You will likely add additional levels to each department as your business grows. But to start, you should determine the levels within the essential departments necessary for your business.
Below are some suggested levels for each essential financial advisor business department:
- Financial Planner
- Investment Manager
- Insurance Specialist
- Certified Public Accountant (CPA)
- Marketing Director
- Lead Generation Specialist
- Social Media Specialist
- Human Resources Manager
- HR Coordinator
- Financial Advisor
- Operations Specialist
As your financial advisor business grows, you will likely add additional levels to each department. But to start, you should determine the levels within the essential departments necessary for your business.
Evaluate Your Business Needs Often
A quickly changing business environment means that you should continually evaluate the organizational structure of your financial advisor business. As your business grows and changes, so should the way it is organized. By assessing your business’ needs on a regular basis, you can ensure that your organizational structure is always aligned with your business goals.
Determine Your Organizational Structure
As you can see, financial advisor businesses have no one-size-fits-all organizational structure. The best way to organize your financial advisor business is to start with the essential departments and add additional levels and departments as your business grows. By evaluating your business needs regularly, you can ensure that your organizational structure is always aligned with your business.