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Financial Advisor Team Agreement

Written By: Chris - Sep• 20•21

All these attributes make it easier to understand the attractiveness of teams. Working as a member of a team is gaining more and more popularity with consultants. In fact, a 2017 Cerulli study showed that 55% of all consultants work as a team. The top 100 is based on assets under management, revenues from consulting firms and quality of practices. Investment performance is not an explicit factor, as clients have different goals and risk tolerances. Customer disputes are particularly at risk in horizontal teams. These are teams made up of consultants of similar levels of production who share accounts. For consultants who have hit “the wall” and realize that they need a partner to climb above, or who may want to start a consulting company and find a partner with complementary skills to grow more effectively from the beginning, there is still a key question: how to find the “right” partner? There are also other advantages. Teams can onboard next-generation consultants and support each other`s customer relationships, according to the Cerulli report. In addition, large teams are attractive means of distribution for asset managers, as they typically have more sophisticated portfolio management and clients.

But of course, your team may not be connected to a protocol company, or even if it is, some members of your team may transfer their practice to non-protocol companies. What will happen then? Do the terms of the protocol or those of your specific team agreement apply? These are the types of issues that an experienced legal advisor can help you and your teammates consider and then implement in your agreement. The broker recruitment protocol contains specific procedures for managing team releases. If there is a written team agreement on customer sharing, these provisions take precedence. But if your team hasn`t followed this advice and doesn`t have a written agreement — that is, an agreement that doesn`t address the client division when the practice dissolves — then some standard procedures fall into place.

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