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March 18, 2021 at 02:12 PM
What You Need to Know
- Outsourcing can help RIAs with investment management, marketing and back-office work, but firms must provide oversight and maintain compliance.
- Remote work can give you more flexibility to utilize outsourced staffing solutions.
- Always consider the cost while thinking through outsourcing opportunities.
This spring brings fresh hope on the pandemic front as well as opportunities for new beginnings and growth in our businesses. The financial services sector — and RIAs in particular — have experienced a boom in demand and engagement, with clients increasingly seeking tailored financial solutions and advice.
The shift to remote work, digitization and greater scrutiny on the markets will continue to unearth opportunities for firms to grow. But for time-strapped RIAs, it can be tough to find the bandwidth needed to make that potential growth a reality.
If you’re looking to scale up your business or drive greater efficiencies, outsourcing might be the creative solution you need.
Outsourcing: More Than You Imagine
Outsourcing can offer a broad range of solutions for investment management, transaction processing, automation, marketing and back-office administration, but it’s critical to weigh the pros and cons.
First and foremost, always consider how your firm will be able to provide oversight and maintain compliance. Outsourcing can be a potential game-changer, but remember that the buck stops with you — even if you’re offloading certain responsibilities to third-party providers.
Let’s look at some of the key ways you may be able to tap into outsourcing.
Investment Management
Managing individual portfolios can be cumbersome, which may be why 41% of advisors outsource more than 75% of their client assets.
Outsourcing investment management can be a way to free up valuable time and focus on growing other strategic areas of your business. But it’s a viable option only if investment management isn’t a central part of your value proposition.
To help boost your productivity, consider solutions such as model portfolios, commingled pools, or external parties that could help you with investment policy, portfolio design or asset allocation strategies.
Also, it doesn’t have to be an all-or-nothing proposition: You can always keep some core functions in-house and outsource others — like certain types of investments or asset classes, smaller or less profitable accounts, or portfolio management tasks such as investment research and security selection.
Technology
The past year’s boom in digitization is profound: According to Deloitte, we’ve seen more digital transformation in the past seven to 10 months than in the previous five years. This rapid growth has brought new opportunities in technology-related support functions like strategy, compliance, and software implementation and training.
