Spend more time with your clients through outsourcing

How to hand off tasks so you can focus on the most important parts of an advisor's job

Key Points

    • Outsourcing back-office tasks can free up advisors to focus on what really matters: their clients.
    • These days, advisors increasingly are outsourcing once-critical services such as investment management.

    • Not all managed service providers are alike. Focusing a few key questions can help you find the right outsourcing partner.

As an independent advisor, your personal touch is what sets your firm apart from others. Direct interactions with clients and prospects can help deepen relationships, boost your assets under management, and increase your revenue. 

But working face-to-face with clients often takes a back seat to other tasks. On average, advisors spend only 20% of their work time meeting with clients and no more than 50% on all client-focused tasks. The good news is that the work consuming the other 50% includes many back-office tasks and financial operations that you can—and should—consider outsourcing.

Why outsource?

Advisors often outsource back-office tasks such as billing, IT management, and marketing. Handing off these tasks to a specialized managed services provider (MSP) can reduce overhead, expand your firm's suite of services, and even reduce operational risk by delegating critical tasks such as compliance management. 

It can also give you more agility. When you outsource, you're a customer, not an employer. If your provider isn't working out, you don't have to fire anyone. You can simply take your business elsewhere when your contract is up. And if you need more expertise or services, your provider likely can accommodate you. 

Most importantly, outsourcing can give you time to focus on the most important parts of your job: meeting with clients, networking, and other activities that can differentiate your firm and increase its value.

Consider outsourcing investment management

In addition to the usual suspects, advisors should think about investment management tasks that they can hand off to other specialized providers. 

Historically, advisors have thought of investment management as an essential service that needs to be managed in-house for their clients. With the increased commodification of portfolio management, advisors are focusing more on the value of holistic financial planning. In this new landscape, it can make sense to enlist an investment management platform such as a turnkey asset management program, or TAMP, to handle investment research, portfolio construction, trading, rebalancing, and tax-loss harvesting. 

Making the most of your extra time

The biggest benefit of outsourcing is the time you gain to spend on tasks that add value for your clients and increase your firm's revenues. When you meet face-to-face (or screen-to-screen) with clients, you deliver value. That may mean having more time to reassure them during a market downturn, or to dive deeply into discussions about their financial goals. They may want help taking more control over their financial lives, building a stable retirement plan, or creating a strategy to secure their financial legacies. 

Increasing the time you spend with each client can deepen those relationships and improve retention. It also can make your firm more attractive to affluent clients, which in turn can lead to higher assets under management and increased revenue. 

Choosing the right service providers

Select MSPs with the same care and thought you would give to recruiting a new team member. Those providers will play an important role in the day-to-day operation of your firm, and you need to be able to trust them as you would trust an in-house employee.

Here are a few things to consider when evaluating an MSP:

  • Scope of services provided. For outsourcing to be efficient, you need a provider who can cover everything you need in a given area of the business, and you need to be sure you're not paying for access to services you won't use. 
  • Length of contract. Many MSPs offer month-to-month rolling contracts, but lengths vary. Consider whether you'd prefer the agility of a short-term contract or the potentially lower rate of a longer agreement.
  • Response time. When you have issues, can your provider address them immediately? Poor communication with your MSP creates headaches for you and can ultimately diminish the service you provide your clients.
  • Integration of services. If outsourcing a task creates more back-office problems than it solves, it isn't worth it. Before you sign with an MSP, be sure you understand how any outsourced work will integrate with tasks performed in-house or by other MSPs. 

Your current workload may leave you little time to consider your firm holistically and make strategic decisions to grow your business over the long-term. When you outsource wisely, you can give more attention to both the details and the bigger picture of your firm's financial strength in a changing industry.

What you can do next

  • Leverage Schwab's relationship with RIA vendors across the industry to research and select a solution that may be right for your firm.

  • Consider a custodian that invests in your success. If you're thinking about becoming an independent advisor, contact us to learn more about the benefits of a Schwab custodial relationship.