A study released Tuesday by Fidelity Clearing & Custody Solutions shows that wealth management firms can realize client-related and business value by hiring outside consultants and specialists.
Forty-three percent of advisors in the study said their firms currently used external consultants, third-party providers or individual specialists for certain business functions.
Half of respondents said they outsourced such functions as investment management, legal and compliance and marketing/communications specifically to create value for clients. Doing so allowed them to focus on deepening client relationships by focusing on planning-centric and goals-based financial advice.
As well, outsourcing of investment management allowed them to provide a seamless experience for their clients.
Another benefit of outsourcing by wealth management firms seems to be that it is good for business, according to the study.
Eighty-one percent of advisors who said they outsourced two or three of the three top outsourced functions reported an increase in number of clients in the past year, compared with 71% who did not outsource.
Likewise, 95% of outsourcers experienced growth in assets under management, versus 89% of non-outsourcers.