As a financial advisor, you are likely eternally busy. Between managing a full client workload, overseeing a team and focusing on business development, it can be difficult to add other items to your plate without suffering from extreme burnout.

To ensure your firm’s future growth and sustainability, you cannot afford to let key operational functions fall through the cracks. This is one reason why many financial advisory firms have made the decision to outsource time-consuming, yet essential areas of their business.

Before you decide to pursue outsourced services, it is important to fully assess your RIA firm’s requirements and needs. In this article, we will weigh the pros and cons that may come with an outsourced solution.

The Benefits of Outsourcing

Efficiency and time savings are two of the most obvious pros to outsourcing below are additional points you and your RIA practice may not have considered.

Reduced Work Burden

Supporting and tracking every advisor’s workflow is a time-consuming task in itself — and when you add a never-ending to-do list of tasks, the process can become even more cumbersome for firm leaders. It requires massive resources such as a sizeable chunk of the budget, dedicated systems, portfolio accounting, billing, reporting, analytics and trading.

The probability of all these allocated resources bringing tangible monetary value to any business is quite slim. Like most advisors, you likely would rather devote that manpower to client engagement, business development and the cultivation of new centers of influence (COI). By outsourcing, you can relieve the burden on your in-house staff and management alike.

Increased Focus on In-House, Value-Added Activities

With more prospects opting for tech-driven solutions, it is essential for financial advisors to set aside more time for personal engagement in order to make clients feel valued and underscore the importance of your advisory relationship in their lives. Value-added services and activities such as behavioral coaching, client engagement events, financial planning workshops or value-added services like tax planning can help boost your relationships. Outsourcing frees up your time to do more of the things that matter to your clients from an engagement perspective and your firm can concentrate on scaling up its operations by allowing dedicated time for client acquisition and personalized interaction.

Boosted Revenue

This is related to the aforementioned points but it bears repeating: revenue generation can take a huge bump when repetitive tasks are outsourced. The process is akin to automation: pay to have investment management taken care of externally and free up time and resources to concentrate on scaling up and increasing revenue.

Managing client portfolios in-house can yield lesser revenues than outsourcing it because it means your team is spending less time on revenue-generating activities. Keeping the process in-house also could put your firm at risk of falling behind. Today, RIA firms are spending more valuable resources on training their advisors to be confident, client-facing professionals, while also educating them on other potentially lucrative services such as business consulting and advisory. The more time your advisors are spending on portfolio management, the less time they have to devote to building other valuable skillsets.

What RIA Firms Need to Understand When Considering Outsourcing

Although the benefits of outsourcing are clear, RIA firms also need to understand that they may need to make some concessions to reap the long-term benefits and efficiencies.

Slightly Higher Costs

To maximize the returns of outsourcing, your RIA practice must carefully compare different plans and providers before making the leap. Services provided by external vendors should be in accordance with their pricing models. While adding revenue by finding new clients can be financially lucrative, it is also important to stay mindful of the value being generated for existing clients by external providers.

Less Control

If you are the sole owner of a highly specialized advisory firm and you have controlled nearly every aspect of your operations thus far, outsourcing may be a big point of concern and anxiety for you.

Frequent Feedback

Outsourcing a significant function of your RIA firm always comes with an element of risk. It is essential to vet any third-party service provider thoroughly to identify potential pitfalls early in the process. Once you have found the right provider and have started using their services, it is also important to ask for regular feedback from your clients and in-house staff members. This can help your firm gauge the provider’s ongoing services and evaluate the extra efficiency and value they are creating, in case you need to end an engagement and find a new provider down the line.

Outsourcing With the Wealth Advisor Alliance

At the Wealth Advisor Alliance, we take great care in providing outsourced services that are aligned with our clients’ investment philosophy, service model and approach. Through our parent company, Forum Financial Management, we also have a community of talented, like-minded advisors that RIA firms can tap into for support.

We help advisors establish and grow successful wealth management practices. To learn more about how we can help you amplify your life’s work, contact us at You can follow us on Twitter@theWAAlliance and on LinkedIn.

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