Outsourcing may be Key to Your Growth as an Advisor

Advice to the Advisors

Sheaff Brock Investment Advisors | compliance, operations, financial planning, portfolio management & trading, sales & marketing and more

Outsourcing may be Key to Your Growth as an Advisor

Since, in the volatile market environment of this decade, it’s much more difficult to add value in the investment management area than it was during the previous 20 years, as thewealthadvisor.com points out, it may make sense for advisors who are pressed for time and want to focus on their core competencies to consider outsourcing options.

At Sheaff Brock, we’ve found that very truth to be self-evident. Advisors with an orientation towards practice growth must keep time free for community outreach and practice development, in particular when it comes to the many different aspects of managing clients’ retirement income portfolios, including investment selection, modeling, trading, and performance reporting.
Portfolio management actually represents only one of the seven different tasks on which advisors need to “have their finger,” Sheaff Brock Director Jim Murphy concludes, every one of which is crucial to professional success:

  1. compliance
  2. operations
  3. employee management
  4. financial planning
  5. customer relations/service
  6. sales & marketing
  7. portfolio management and trading

Retirement portfolios of today are, by necessity, very different from those of earlier generations, Murphy emphasizes, and just as thewealthadvisor comments, it is much more difficult to add value in the investment management area. Product selection and management need to reach beyond the standard ETF/mutual fund mix.

Cutting costs, saving time and refocusing on business development are the major reasons behind investment management outsourcing, and as the Barron’s Magazine blog explains, the division of labor can bring a higher level of expertise into the overall process. As to the incremental cost to clients of hiring expertise through outsourcing of investment management, Barron’s notes, the upside is that advisors’ staff people can work at higher levels that are “monetarily more valuable to the firm.”

Acknowledging that many RIAs do enjoy involvement in investment selection, Jim Murphy notes that Sheaff Brock’s role is to provide additional support, strategies, and experience in wealth management. The more a practice grows, he has noticed, the greater the likelihood that special client situations will arise, calling for more specialized portfolio constructs and techniques.

Could outsourcing be the key to your growth as an advisor?

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