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Portfolio > Portfolio Construction > Investment Strategies

Advisors Happy With Outsourced Investment Management: Survey

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What You Need to Know

  • Ninety-eight percent of participants who outsource investment management said it allows them to deliver better investment solutions,
  • Ninety-one percent said they have achieved accelerated growth in total assets as a result of outsourcing.
  • Of participants who do not outsource, 65% cited concern over higher fees and 48% worried about loss of control.

Advisors say their main challenges are scaling their business for growth and spending time on business-building activities, such as financial planning with clients, practice management and new business development, according to a new study from AssetMark, a turnkey asset management platform.

Enter outsourced investment management, which enables advisors to serve more clients and spend time on other business activities.

Ninety-eight percent of study participants who outsource investment management said it allowed them to deliver better investment solutions, and 92% said they were happy with their decision to outsource, up from 83% in the original 2019 study.

Ninety-five percent reported a better work-life balance because of outsourcing, and 91% said they have achieved accelerated growth in total assets as a result of doing so.

“To achieve scale and growth, advisors need to prioritize their limited time on activities that drive the most value,” Matt Matrisian, AssetMark’s chief channel officer, said in a statement. 

“The study found that, on average, advisors who outsource report they save more than seven hours per week that they can repurpose toward other priorities, with the confidence that their clients’ assets are being expertly managed.”

Among advisors who do not outsource, 65% cited concern over higher fees as the reason for not doing so. Forty-eight percent expressed concern about loss of control, and 43% did not think they would be able to customize solutions for customer situations.

“It’s a strategic decision to outsource and advisors need to weigh the pros and cons for their unique practices,” Matrisian said. 

8 Acre Perspective conducted an online survey in September and October among 581 advisors who outsource investment management and 176 who do not. 

All participants have seven or more years’ tenure as a financial advisor and up to $500 million in assets under management, of which 30% is fee-based and at least 50% is from individual retail investors. Those who outsource have a minimum of a fifth of their assets outsourced to a third party.