I was talking to Marcus recently.
Ten years ago, he founded his firm.
Sarah joined six years ago, Len seven.
Each of them now runs their own pod, and for years it has worked well.
Then, twelve months ago, Maddie left Len’s team.
Maddie was Len’s constant second chair, a senior adviser in her mid-thirties, on track to become a shareholder in the firm.
She and Len worked so well together that clients barely noticed which of them they were speaking with.
Too well together, it turns out.
Len has had the worst year ever, overwhelmed ever since Maddie left.
Not because he lost one person.
Because he’d never understood how much that one person actually did, how much of the client experience, the workload, and the decision-making depended on the two of them working as a closed unit.
They didn’t have a firm-wide way of picking up what Maddie carried, procedures were in heads, not in Trello threads, service propositions were just “Len and Maddie’s way of doing it.”
Len is struggling, has lost any motivation to create new business, is concerned about losing key clients, double- and triple-checking every piece of advice that goes out, and is only now seeing what his pod had been quietly hiding from the rest of the firm, including from him.
That’s the pod problem.
The very thing that makes them so productive, deep, self-contained, and specific in their expertise is also what makes them difficult to replicate when it matters most.
Pods versus pools
A pod is a dedicated team built around a specific expert or specialism, much like medicine, law or politics. Pods often develop their own way of engaging, pricing and servicing clients. They talk about “our clients,” “our approach,” “our targets,” not the firm’s.
A pool is different.
Team members move between jobs based on firm-wide priorities and capacity, not pod loyalty. Clients are exposed to a broader cross-section of the team. Objectives, service standards, and team collaboration are managed firm-wide.
Both models can be productive.
A well-run pod is a rowing crew, each member knowing exactly how the others move.
But high-performing pods are also the hardest structures to infiltrate or replicate, which is precisely why losing one person, like Maddie, created the worst professional year Len has ever experienced.
Dependency is the real cost
I’ve watched more firms held back by dependency on too few people than by any other single issue. Not enough capital, not enough marketing, not enough systems, dependency.
Pods accelerate that dependency.
Every efficiency a pod gains by working tightly together is efficiency built on a small number of harder-to-replace people.
Pools spread capability wider by design. Their agility, priorities and responsiveness are driven by firm-wide leadership, rather than pod leadership.
They’re less slick in the short term and need considerably stronger control to hold together. Someone has to stop the firm quietly competing against itself, but they don’t concentrate the firm’s entire value in three or four people who could leave, retire, or simply have a bad year.
There’s also the return-on-investment question that few firms manage well.
Team investment is the hardest cost in an advisory business to justify, and pods can make that harder still, as management, leadership, coaching, and development are more dependent on each pod’s leader than on firm-wide leadership.
Where financial advice is heading
I don’t believe the clients most willing to pay and come back year after year for advice are buying investment expertise or insurance expertise.
They’re buying help with a specific, complex life situation, business succession, ageing parents, a semi-retirement move, that no single technical skill solves alone.
That favours pools.
A niche such as advising business owners through succession needs a blend of tax, structuring, family dynamics and timing, skills that sit across a firm, not within one pod.
A niche like pre-retirees seeking to downsize, upgrade the caravan, semi-retiree and fund as many years of travel as possible also requires a blend of ongoing advice rather than specific product or service advice.
Product expertise won’t disappear, it’ll increasingly work the way medical specialists do now, referred in by the principal adviser who owns the client relationship, not the one who owns the pod.
So where does that leave you?
Are you building pods that make your firm look efficient today but fragile the moment someone leaves, or pools that make your firm harder to break?