The smallest advisory firms – especially those run by unsupported solo advisors – often find that early success brings growing operational demands that strain their time, energy, and wellbeing. Yet after adding team members to grow their firms, many advisors discover that their capacity challenges are replaced by new inefficiencies stemming from the need to coordinate across multiple people, leaving them without the calendar control they had hoped to gain.
In this article, Mark Tenenbaum, Kitces.com’s Director of Advisor Research, explores findings from the latest Kitces Research study on advisor productivity, “How Financial Planners Actually Do Financial Planning”. The research highlights that the three-member “Triangle Team” – consisting of one lead advisor and two support staff, typically a Client Service Associate and an Associate Advisor – tends to be the most effective team structure for maximizing productivity. The typical Triangle Teams produce an impressive $1.2 million in average revenue per advisor and $412,000 per employee, outperforming all other team configurations, including the popular “Diamond Team” structure, which adds two Service Advisors but results in lower productivity per advisor and per employee.
The success of Triangle Teams lies in their ability to balance what Kitces Research describes as the “leverage-coordination trade-off”. Smaller teams consisting of one or two members inherently avoid the coordination challenges that increase with team size, but they often lack the staffing leverage needed to free up the Senior Advisor to focus on business development. By contrast, larger teams provide advisors with this leverage, but their additional seats often fail to translate into productivity gains because they introduce two key inefficiencies relating to coordinating across too many members: the “Management Tax” and the “Shared-Clients Tax”.
These two inefficiencies take shape in distinct but compounding ways. The Management Tax occurs when Senior Advisors must spend more time onboarding, training, and managing staff – time that doesn’t scale with team size. The Shared-Clients Tax arises when multiple lead advisors serve the same clients, requiring additional meetings, handoffs, and coordination that detract from client-facing work. Triangle Teams strike the optimal balance: Two support staff provide enough leverage to offload lower-value tasks while staying lean enough to avoid excessive coordination demands.
For solo or two-member practices, moving toward a 1+2 Triangle Team structure can be a strategic path to growth. Hiring a CSA first, followed by an Associate Advisor, can significantly boost productivity – if timed between the “profitability wall” (when hiring becomes financially viable) and the “capacity wall” (when help becomes urgently necessary). Proactive planning and structured onboarding – especially for Associate Advisors – are essential for success.
Larger teams that aren’t positioned to reduce headcount can still improve efficiency by implementing systematized workflows and quarterly client service calendars. Defined processes ease the delegation burden on Senior Advisors, while quarterly client service calendars help prevent overservicing and clarify responsibilities. According to Kitces Research, teams that use four planning periods per year – each focused on a single planning domain – tend to achieve the best mix of client value and internal efficiency.
Ultimately, while three-member Triangle Teams can be a powerful model for enhancing productivity, each firm has the opportunity to define the team structure that best supports its unique mission and the lives its advisors want to lead. Whether the goal is to scale revenue, create more time for client relationships, or design a business that sustains a fulfilling lifestyle, understanding the trade-offs between leverage, coordination, and growth can help advisors make satisfying decisions with greater clarity and confidence!
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