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Financial advisory leaders often point to markets, compliance, or technology as the primary obstacles to growth. Yet one of the most overlooked drains on profitability is staff underperformance.
According to the 2024 Kitces Financial Planner Productivity Study, revenue per advisor rose modestly from $379,360 in 2022 to $400,000 in 2024. But the bigger story was a 24% jump in revenue per employee, from $250,000 to $310,000, underscoring that operational efficiency gains are more tied to support staff leverage than to advisors themselves. When staff are underperforming — or when firms fail to structure teams effectively — the entire business pays the price.
Case in point: Our client, Shelley, leading a three-person, fee-based RIA and managing $350 million AUM was experiencing this. The pain manifested itself quickly.
“We’re bursting at the seams, but I don’t have the systems in place to guide staff effectively or the time to find and manage the right hires,” she said. During a strategy call with one of the Client Support Associates, Shelley shared, “We’re overwhelmed as a team, and I don’t see an end in sight.”
When I asked, how the team was leveraging the firm’s CRM, she responded, “We’re not — we’re using an Excel spreadsheet to manage both applications and client tasks.”
Our client had reached a point where she had to fix the problem or her firm would stop growing. This scenario highlights the complexities at play. Giving teams the technology support to manage client tasks and moving away from manual systems is important. When you don’t take the time to learn the software, implement the features and train teams, the profitability drains are both team- and technology-related.
Why Underperformance Matters
Advisory firms are people-driven businesses. Unlike asset managers or product manufacturers, their value is derived from human capital — specifically, the ability of teams to serve clients effectively, deepen relationships, and manage workflows.
Underperformance manifests in multiple ways.
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Bottlenecks in service delivery: Slow or inconsistent follow-through erodes client confidence. For Shelley, a $2 million client was not impressed with how long it took to onboard her accounts and took their business elsewhere. At 1%, that’s a $20,000 immediate loss. Compound that across three to five clients per year, and it becomes roughly $60,000–$100,000 in missed revenue annually due to undefined or clunky workflows causing bottlenecks.
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Advisor burnout: Senior advisors shoulder too many administrative tasks, limiting client-facing time. Without systems and a delegation plan, account paperwork landed back on Shelley’s desk weekly, eroding her time to focus on bringing in new business.
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Capacity constraints: Teams hit growth ceilings far earlier than necessary.
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Lost profitability: Overservicing clients without aligning fees to value leads to reduced margins.
The Kitces research confirms what many leaders feel intuitively: Underperforming staff create drag that not only limits today’s revenue but stalls future growth.
The True Cost of Inefficiency
The data is stark. Unsupported solo advisors cap out at around $182,500 in revenue, while supported solos with at least one staff member average $500,000 or more. Put differently, failing to leverage staff support cuts potential revenue by two-thirds. Even at the team level, the structure matters enormously. The report highlights the “1+2 model” (one lead advisor with two staff members) as the most productive, generating over $1.2 million in annual revenue and outperforming larger, multi-advisor teams weighed down by coordination challenges.
Poorly structured or underperforming (or under-trained) teams cost firms in five distinct ways:
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Reduced advisor capacity: Advisors stuck in back-office tasks spend less than the optimal 30%–35% of time in client meetings, compared to top-performing teams.
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Inconsistent client experience: Service errors or delays increase attrition risk and diminish referrals. Shelley’s misstep with that one client cost $20,000.
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Overservicing without pricing discipline: Many firms provide far more service than their fees justify, stretching staff thin and lowering profitability.
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Growth delays: Without reliable team support, firms stall at a plateau, unable to take on more clients or move upmarket to higher-value relationships.
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Compliance & governance: Overwhelmed teams are more likely to make recurring mistakes while trying to get all the work done. This leads to compliance risks and overall governance issues, further eroding profitability.
Practical Strategies to Address Staff Underperformance
The solution is not simply “working harder” or layering on more technology. Instead, advisory leaders should consider four proven strategies:
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Implement the right team structure.
The Kitces study highlights the power of the 1+2 model. You should pick the best team model for your practice, growth, clients and aspirations. Firms should resist the temptation to immediately add multiple lead advisors prematurely, which often creates inefficiency. Instead, invest in support roles — client service administrators and associate advisors — which free senior advisors to focus on client relationships and growth.
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Align workflows to staff roles and client service.
I can’t stress this enough. Underperformance often results from unclear role definitions. Each staff member should have a defined scope aligned to their capabilities, with standardized workflows for tasks such as data gathering, plan updates, and scheduling. Consistency reduces errors and accelerates service delivery.
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Institute pricing discipline.
Overservicing is a silent killer of productivity. Firms should establish minimum fees and ensure client touchpoints that align with pricing. This prevents staff from overextending uncompensated tasks, which frequently leads to burnout and turnover.
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Train teams on workflows and systems.
Layering on tech with no instruction is a recipe for ensuing chaos. You should start with taking an assessment of how well you’ve trained your teams on your internal systems and tech suite. Does everyone know how to leverage the tools to do their work? This prevents staff from falling into bad habits, manual tracking and missing key service points, which frequently lead to leader frustration and overwhelm when those tasks land back on their desks.
Next Steps
The evidence is clear: Staff underperformance is not just a personnel issue; it is an operational and profitability issue. Advisory leaders who continue to “make do” with inefficient teams and underutilized tech risk compounding losses over time. The opportunity cost is measured not just in revenue today, but in the clients who never come through the door tomorrow.
Source:
Kitces Research, How Financial Planners Actually Do Financial Planning: 2024 Financial Planner Productivity Study, The Kitces Report, Vol. 2, 2024.
Cameo Roberson is the CEO and founder of Atlas Park Consulting, an operations strategy and fractional COO agency. She spent over 15 years in the RIA space, is an industry expert, and has been featured in publications including Investment News, Financial Planning Magazine, Forbes, and The Journal of Financial Planning.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
