New research from global analytics firm Cerulli Associates suggests broker/dealers, asset custodians and investment managers are adapting their services and product offerings as the prevalence of “adviser teaming” grows.

Kenton Shirk, associate director at Cerulli, explains that the appeal of adviser teaming remains strong among both established and new advisers—and from the largest to the smallest segments of the business. The term “adviser teaming” applies to a wide range of circumstances, he notes, but the general principal is to bring together advisers and firms with complementary business lines, workforces or technologies to create a more efficient approach to both practice management and client service.

For advisers, a successful merger or partnership can generate substantial growth and productivity enhancements, Shirk says (see “Executing Practice Growth”). With the growing complexity of planning needs, investment products, technology and regulations, Cerulli finds small adviser practices “may struggle to tread water, opening the door to consolidation opportunities for larger practices with a robust infrastructure.”

The retirement industry in particular has seen many examples of this thinking play out in recent years—and the energy has not just been limited to advisory firms. A number of technology-driven partnerships have come into being of late and more are anticipated moving forward. At the same time, efforts to create massively scaled advisory networks sharing a common back-end infrastructure have reshaped the wider advice landscape, for example when RCS Capital moved to acquire Cetera. Other examples include Great-West’s acquisition of J.P. Morgan Retirement Plan Services’ large-market recordkeeping business, a combined firm subsequently rebranded as Empower Retirement.

Cerulli’s data shows the growth of multi-adviser practices is most pronounced in the independent advisory firm channels. The average number of total professional adviser staff per practice is 3.3 in the wirehouse channel, the research shows.

“That compares to an average of 5.2 for dually registered practices and 4.5 for registered investment advisers,” Shirk explains. “The report also finds the advisory industry is increasingly shifting away from an individual producer mindset to that of a multi-adviser team.”

Cerulli suggests the industry’s largest practices and teams also typically serve affluent investors, “which reinforces their propensity for teaming.” The desired result is providing broader and deeper services to meet the more sophisticated needs of their high-net-worth clientele—an effort that could become more difficult under a revised Department of Labor fiduciary rule.

The largest teams cite the ability to provide more services more efficiently as the primary reason for a team approach.

“By pooling resources, they are better equipped to create specialized adviser and staff roles,” Shirk concludes. “Teaming offers an opportunity to develop specialized roles for both advisers and staff, which greatly enhances adviser growth opportunities and productivity levels.”

Information on obtaining full Cerulli reports is available here.