From principal-centric to team-led: Letting go without losing control

For many principals of financial advice practices, the business is deeply personal. You built it from the ground up, nurtured client relationships over decades and developed an intimate understanding of every family you serve. The prospect of stepping back can feel like abandoning everything you have worked to create. Yet the data suggests that learning to delegate effectively is precisely what distinguishes practices that thrive from those that merely survive.

According to the 2024 Australian Financial Advice Landscape report from Adviser Ratings, succession planning remains a significant blind spot across the profession. Some 40 per cent of firms have not nominated a successor and say they do not need one; while a further 30 per cent acknowledge needing a successor but have yet to begin the search. Only 17 per cent have a successor already in place, with another 13 per cent actively working on the issue.

These figures point to a deeper challenge: the difficulty of transitioning from a model where everything flows through one person to one where capability is distributed across a team.

The profitability case for delegation

Research from Macquarie Business Banking’s Financial Advice Benchmarking report reveals the significance of the gap. Practices in the top quartile for profitability achieved profit per owner of $809,163, compared to $252,969 for other firms. These high-performing practices more than doubled their profit per adviser, at $425,931 versus $199,995 elsewhere.

What separates these practices? High-performing firms maintain 1.8 full-time equivalent support staff per adviser, enabling advisers to focus on client-facing work. Their advisers conduct 10.9 client appointments weekly compared to 5.2 for other practices, and service 280 clients per full-time adviser compared to 184 elsewhere.

Perhaps most striking is the connection between succession planning and current profitability. Practices with effective succession plans in place saw profit per owner of $684,148, compared to $355,446 for those without documented plans. The discipline of planning for transition appears to drive better business performance today.

Why principals struggle to let go

The reluctance to delegate often stems from legitimate concerns. Clients came to the practice because of the principal’s expertise. How can anyone else replicate those relationships?

Stephen Prendeville, founder of Forte Asset Solutions, observes that advisers very rarely plan their exit in advance. Instead, a trigger event forces the issue: health concerns, family circumstances or simply deciding one morning to leave. Industry research suggests day-to-day pressures consistently push succession planning down the priority list.

The challenge is compounded by the time investment required. Building a capable successor typically takes three to five years, compared to a sale process that might conclude within twelve months. Many principals find it easier to contemplate an eventual sale than to invest in developing the next generation.

Building the framework for delegation

Effective delegation requires systematising the elements of service delivery that currently exist only in the principal’s head. This means documenting processes, creating service models and building quality assurance mechanisms that do not depend on a single person’s oversight.

The Macquarie research found practices with fully documented annual plans achieved profit per partner of $664,446, compared to $294,154 for those without. Articulating how the business works creates clarity for team members and enables genuine capability transfer.

High-performing practices also distinguish themselves through active feedback collection. Firms that systematically gather input from both clients and staff to refine their value proposition saw $137,298 higher profit per owner.

Starting the transition early

Olivia Ellis, head of accounting and financial services at Macquarie Business Banking, emphasises initiating succession discussions early to prevent missed opportunities. The advice industry faced a reduced talent pool from 2018, and while adviser numbers have stabilised above 15,500, competition for quality successors remains intense.

Early conversations help identify team members with genuine ownership aspirations. They provide runway for gradual transfer of client relationships, allowing successors to build credibility while the principal remains available as a safety net.

Starting early creates optionality. A principal with a capable team and documented processes can choose between internal succession and external sale, timing the transition to maximise value. Those who delay find their options constrained by circumstance rather than strategy.

Control through systems rather than supervision

The fear of losing control often reflects a misconception about what control means. True control comes from robust systems, clear standards and team members who understand the practice’s values.

The most successful practices embed quality assurance into workflow rather than relying on final review by a single individual. They invest in training, creating multiple team members capable of delivering advice to the practice’s standards.

Moving from principal-centric to team-led operation is uncomfortable because it requires letting go of activities core to the principal’s identity. Yet practices which make this transition successfully deliver better outcomes for clients, team members and principals alike. The question is whether to begin that journey deliberately or wait until circumstances force the issue.

James Dunn

James is an experienced senior journalist and editor of The Inside Network's publications.