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How Outsourcing Investment Management Can Benefit Advisors: Survey

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When financial advisors outsource their investment management, their client engagement and personal income increase and their stress level decreases, according to a new survey commissioned and released by AssetMark Financial Holdings, a provider of investment and technology solutions.

More than two-thirds of advisors in the study said outsourcing helped them acquire new clients, and 98% said doing so allowed them to deliver better investment solutions.

Advisors also reported that outsourcing enabled them to serve more clients and provide a more consistent approach across their business. Such outcomes left them pleased with their decision to outsource investment management, with 87% saying its benefits had met or exceeded their expectations.

“Prior to this study, there had been little documented evidence of how outsourcing positively impacts financial advisors,” Natalie Wolfsen, chief solutions officer at AssetMark, said in a statement.

“In today’s competitive landscape, outsourcing enables advisors to increase capacity, gain scale and enhance their personal well-being — all while staying on top of a shifting regulatory landscape.”

The study analyzed responses from 702 financial advisors, 560 of whom said they delegated a portion of their investment management to a third party and 142 of whom did not currently outsource any investment management. Researchers also conducted in-depth interviews with advisors who outsourced more than 20% of their investment management services.

According to the study, 86% of outsourcing advisors said outsourcing had made them more successful, and 84% noted that outsourcing enabled greater oversight of portfolios.

Seventy-eight percent regretted that they had not started to outsource sooner.

Eight in 10 outsourcers in the study said they planned to increase the percentage of assets they outsource.

Advisors who outsourced 20% to 49% of assets reported that doing saved an average of 5.8 hours per week.

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