Advisors Repurpose Time Through Customized Outsourcing

Advice to the Advisors

Investment Advisors Rethinking Time | Outsourcing Concepts | Sheaff Brock Institutional Group

Advisors Repurpose Time Through Customized Outsourcing

At the giant Morningstar Conference spread out at McCormick Place on the Chicago pier, the keynote address was titled “Distortion, Divergence, and Diversification: What Investors Need to Know About the State of the Global Economy.” Sheaff Brock Senior Vice President of Investments Christy Jordan was there to learn what Registered Investment Advisors are thinking and doing these days.

Time—lack of it, that is—was a recurring motif. As RIAs struggle to capture assets, many explained, they feel overwhelmed by the administrative duties of running the practice and by the rigors of compliance. Increasingly, advisors are turning to outsourcing.

The concern expressed by many is that “traditional” outsourcing, perhaps through the use of ETFs or mutual funds, can fail to satisfy the need for customizing portfolios in accordance with individual financial planning client needs. That concern is moving many RIAs in the direction of outsourcing through separately managed accounts.

As highlighted in a 2018 Investment News article, many RIAs are “growth-restrained” by lack of time, expertise, or both. One increasingly popular solution: “Having the right team of problem-solvers with the right talent in the right roles—either internally or on an outsourced basis” author Shirl Penney observed, is precisely the insight RIAs shared with Christy Jordan in Chicago. “Plenty of RIA chief execs that I talk with say they are busier than ever, Penney writes. “The problem is many are doing the same things without evolving.” Jordan’s conversations with RIAs certainly appeared to fall in line with those observations—with customized client solutions as the path towards RIAs being able to focus on practice growth.

Several advisors at the conference shared a common retirement planning challenge: clients retiring with one stock making up a quarter to a third of their entire portfolio. Managing the “easing out” of that concentrated position over several years can prove too time-intensive a responsibility for a practitioner; outsourcing provides the solution. “Here is where Sheaff Brock is able to customize individual option strategies with goals to reduce risk and increase tax efficiency,” Jordan explains, “all while preserving the advisor’s control of the client relationship.”

Yet another situation described by several advisors was the selling of a closely held business. Here, outsourcing allows for using customized option strategies aiming to protect value during succession planning and business transitions. Solving this very level of advanced problem for RIAs’ clients is what customized outsourcing is all about, Jordan explains.

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