Financial Advisors Should Outsource to Win

There’s no denying that advisors, and their clients, are consumed by COVID-related concerns.  But I have to say, for the majority of advisors with whom I regularly speak, I’m hearing that business couldn’t be better!  Client retention is strong, and new client growth is picking up as advisors become better at establishing trust and rapport over the phone or through Zoom.

As good as things are, it’s important to make the time to evaluate your business and how it’s changed in the last six months.  Is your infrastructure and support keeping up with that growth? Already consumed with family and remote office challenges, is your team feeling overwhelmed with their workload?   

Maybe it’s time to finally consider whether you truly need to do certain tasks yourself, or whether there are options for doing it cheaper, faster, and better. 

Now is the Time to Consider Outsourcing

A recent AssetMark survey of more than 700 advisors who outsourced investment management found that:

  • 77% experienced on average a 27% growth in total assets under management
  • 67% experienced on average 17% lower operating expenses
  • 72% experienced on average a 26% higher personal income [1]

Outsourcing just one element of their business led to more assets, lower costs and increased personal income for these advisors. You should put pencil to paper and estimate what it can do for your firm, too.

Why You Should Consider Outsourcing

It’s what’s best for your clients

The job of the financial advisory firm has become more complex over the past few years. Your value proposition and service platform have constantly evolved as your clients seek advice across more aspects of their lives – college savings, insurance, retirement, and estate planning. Keeping up with the latest changes to tax code alone can be maddening. Rather than expecting your team to juggle more balls, consider expanding your services by seeking out best-of-breed solutions and partnering with those companies to deliver them to your clients. 

Free up capacity

When you recognize that your team needs additional resources, hiring additional full-time employees may not be the answer. Good employees are hard to find, can be expensive, and managing teams can take your focus away from your clients. Outsourcing provides specific expertise and clears your and your employees’ plates providing more time for everyone to focus on what they do best.

Deliver experience

There are people and companies out there who have built teams of people and/or technology systems to be excellent at very specific things. They are narrow and deep in their focus, and many are very good at what they do. If you want the best for your clients, why wouldn’t you choose to engage these solutions rather than spend the money, time and resources to try to build it yourself?  I’m pretty sure I can spend many months learning how to remodel my kitchen, but I have neither the time, patience, nor “marital courage” to attempt this myself.  I’ll just hire an expert!

Amplify your growth

Outsourcing not only allows your team to focus on building relationships with clients and prospects, it also allows your team more time to help more people. Because you are able to do more, you’ll also find that your clients drop “My advisor does that” into conversations more often with their friends and colleagues, leading to new referrals.

Increase YOUR happiness

What do you love to do? How are you spending your time? Do they align? Time is your most valuable asset. Are you and your team leveraging it to create maximum benefit for your clients and your firm? For example, if you are passionate and excellent about picking investments for clients, then keep on doing it. But if that’s not your thing, you should be exploring opportunities to outsource that function to someone who has the time, knowledge, and inclination to do it full time. That will give you more time to focus on what you’re good at, and what you love to do.

Make It happen

It’s time to honestly assess yourself, your business and your team – who you are, what you do best, and why it matters.

  • What you love to do?
  • What are you good at?
  • What do you do that adds the most value to your clients?

Anything that falls into “adds the most value”, but not into “love it” or “good at it” is an outsource opportunity.

Once you figure out what can or should be outsourced, find the best partner possible to help you deliver each of those services. Your custodian, broker/dealer, and closest strategic partners are sure to have plenty of suggestions for outsourcing solutions. 

Be proud to weave these partners into your value proposition, knowing that you’re bringing the “best of the best” to your clients. They’ll appreciate it!

[1] Source: The Impact of Outsourcing survey by AssetMark. July, 2020

Related: Stay Humble and Play Your Role with Derek Bruton