The Movement Toward Outsourcing
While many independent financial advisors know what it takes to run a thriving business, they often feel bogged down in the details of trying to do everything themselves—from administration and compliance to business development and servicing clients.
There are only so many resources available to an advisor (time, people, technology, technical skills) that allow them to work on those things that add the most value to their clients and their businesses. Adding to this challenge, clients are increasingly demanding customized services and expertise that go far beyond investment management.
Complicating matters, an advisory business is not getting any cheaper to run. The efficiency and cost savings that technology and experience should bring are not being realized by advisors. Both real costs and relative costs are growing.
A different approach is needed. Today's advisor must evolve to meet the realities and demands of tomorrow's business. Increasingly, advisors are making the decision to outsource.
There are only so many resources available to an advisor (time, people, technology, technical skills) that allow them to work on those things that add the most value to their clients and their businesses. Adding to this challenge, clients are increasingly demanding customized services and expertise that go far beyond investment management.
Complicating matters, an advisory business is not getting any cheaper to run. The efficiency and cost savings that technology and experience should bring are not being realized by advisors. Both real costs and relative costs are growing.
A different approach is needed. Today's advisor must evolve to meet the realities and demands of tomorrow's business. Increasingly, advisors are making the decision to outsource.
Benefits of Outsourcing
Top Firms Know the Outsourcing Difference
Some of the most successful advisory firms have successfully focused on their unique abilities and leveraged everything else through outsourcing and partnership. Top firms are distinguished by higher profits, AUM and growth rates, and more clients. Looking deeper, another key factor that differentiates top firms from their peers is their mastery of time management. The result is a focus on serving clients and an emphasis on growing a business profitably.
Some of the most successful advisory firms have successfully focused on their unique abilities and leveraged everything else through outsourcing and partnership. Top firms are distinguished by higher profits, AUM and growth rates, and more clients. Looking deeper, another key factor that differentiates top firms from their peers is their mastery of time management. The result is a focus on serving clients and an emphasis on growing a business profitably.
Source: "Who Are the Champions? What Separates the Best Advisors from the Rest," Investment Advisor, September 10, 2008.
At Bellatore, we have analyzed the challenges you face on a daily basis as an independent advisor. Leveraging our past experience, the latest industry research and our first-hand knowledge of advisors, Bellatore Financial offers an enhanced turnkey asset management program (TAMP) that provides a range of back office services, business development support and investment options to help the growth and efficiency of your business.
How Bellatore's outsourcing solutions can benefit you:
At Bellatore, we have analyzed the challenges you face on a daily basis as an independent advisor. Leveraging our past experience, the latest industry research and our first-hand knowledge of advisors, Bellatore Financial offers an enhanced turnkey asset management program (TAMP) that provides a range of back office services, business development support and investment options to help the growth and efficiency of your business.
How Bellatore's outsourcing solutions can benefit you:
- Portfolio construction, model management and fund selection reduces the time you spend on portfolio management and research
- Back office service outsourcing for time-consuming functions such as account set-up, trading and reporting
- An open architecture platform to offer you more control and flexibility
- Access to multiple custodians in an integrated fashion
- Powerful, leading-edge operating technology to streamline your practice and reduce administrative complexity
- Committed, ongoing business development and practice management support to help grow and manage your business
- Access to knowledge leaders from within Bellatore, the academic and professional community, and a network of Bellatore advisors
- Wealth planning services to address the specific needs of your affluent clients
What Do You Outsource?
Advisors face an increasing number of options to address the challenges of building and managing a successful advisory business. Searching for the right back-office solution, business development system, technology platform and investment alternatives is more than a full-time job.
To grow revenue, advisory firms must either select an outsourcing solution or hire staff—including administrative, technical and management positions—to support their growth. In addition, the expense of attracting and retaining key employees makes it difficult for many advisers to manage their businesses effectively, much less profitably. Moreover, these higher general operating costs and pressures to reduce fees have also reduced margins.
That means what started out as a client-centered business often results in a business with great administrative complexity. To combat that problem, advisers are outsourcing business-related functions to run more-effective practices and to increase the time spent cultivating long-term client relationships.
To grow revenue, advisory firms must either select an outsourcing solution or hire staff—including administrative, technical and management positions—to support their growth. In addition, the expense of attracting and retaining key employees makes it difficult for many advisers to manage their businesses effectively, much less profitably. Moreover, these higher general operating costs and pressures to reduce fees have also reduced margins.
That means what started out as a client-centered business often results in a business with great administrative complexity. To combat that problem, advisers are outsourcing business-related functions to run more-effective practices and to increase the time spent cultivating long-term client relationships.
Defining the Solution
Effective, sustainable outsourcing focuses on what the advisor and team members do best and where they provide unique value and experience, and then delegates the remaining tasks to an outsourcing partner. This involves determining the desired combination of outsourced and in-house services, and identifying the specific functions that are worth doing in-house from both a time and cost perspective.
Questions to Ask When Determining What to Outsource
Effective, sustainable outsourcing focuses on what the advisor and team members do best and where they provide unique value and experience, and then delegates the remaining tasks to an outsourcing partner. This involves determining the desired combination of outsourced and in-house services, and identifying the specific functions that are worth doing in-house from both a time and cost perspective.
Questions to Ask When Determining What to Outsource
- How much time is spent on revenue-generating efforts compared with operations and administrative functions?
- How does this compare with firms that allocate a significant portion of their time to client-focused activities?
- How much time is spent on higher-dollar-value tasks versus lower-dollar-value tasks? Could hiring more staff achieve similar costs and results?
- Could adopting an outside technology platform make the firm more efficient?
- How does the time spent on activities such as oversight and training affect growth?
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Bellatore Financial, Inc. is a SEC Registered Investment Adviser.
Bellatore Financial, Inc. is a SEC Registered Investment Adviser.