Financial advisors increasingly face a defining choice: remain independent or join forces with other practitioners. According to Financial Planning, and based on a recent Cerulli Associates study, that decision largely depends on how aggressively advisors want to grow and how much autonomy they are willing to sacrifice.
Cerulli reports that 51 percent of advisors currently operate in team-based structures, reflecting a steady shift toward collaboration. Cerulli reported that team structures dominate wirehouses and hybrid RIAs, where 64 percent of advisors operate alongside at least one other advisor.
Hiring another advisor or entering a merger often produces a more durable business model, but teaming does not represent a mandatory path for sustainable growth. The choice instead marks a critical inflection point for registered investment advisers and other advisory firms.
Shauna Mace, head of practice management at SEI, told Financial Planning that advisors who want to scale their practices eventually must decide whether to hire. She noted that few advisors can effectively serve hundreds of clients alone, particularly as client expectations expand. At the same time, Mace emphasized that the decision involves more nuance than a simple desire for growth, given the growing availability of outsourcing solutions and integrated technology platforms.
Mike Byrnes, founder of Byrnes Consulting, explained that the industry's evolution toward comprehensive financial planning has made solo practice increasingly difficult. Advisors now must manage marketing, compliance, legal, operations, human resources, and technology functions alongside client service. Byrnes described solo advisors as de facto CEOs who must wear multiple hats without the benefit of specialized staff.
Financial Planning states that, despite those challenges, solo practitioners continue to operate successful businesses, often by leveraging third-party providers or internal support. Cerulli's data, however, highlights meaningful performance differences between teams and solo advisors. At year-end 2024, team-based practices averaged $330 million in assets under management, compared to $151 million for the industry overall and $95 million for solo advisors. Teams also generated higher annual organic growth, managed larger average client accounts, served more client relationships, and employed specialized staff at significantly higher rates.
Teams reported stronger infrastructure across multiple dimensions, including paraplanning support, broader service offerings, and formal succession planning. Cerulli found that 79 percent of team-based practices maintained a succession plan, compared with 66 percent of solo advisors.
Financial Planning reports that teaming, however, does not represent the only viable option. Mace noted that solo advisors can rely on marketing firms, custodians, broker-dealers, offices of supervisory jurisdiction, and technology vendors to fill resource gaps. Some advisors also adopt "siloed" models, in which practitioners share branding or infrastructure while retaining independent books of business.
Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.
