Outsource to get close with clients

Outsource to get close with clients

Outsource to get close with clients Outsourcing can grow your business and bring you closer to your clients, suggests recent research.

Results from a study by Northern Trust Corp, a custody bank and wealth manager, indicate that 70 per cent of U.S. advisors were reporting business growth after outsourcing time-consuming grunt work.

Another report from consulting firm Tiburon Strategic Advisers suggests that hiring a third-party to handle anything from portfolio construction and management to rebalancing, compliance, research and back-office support has been a growing trend over the past 10 years.

Hiring a third-party can alleviate some time better spent building and maintaining client relationships, while resulting in an increase of referrals and fewer marketing dollars spent, according to the studies.

One deterrent, however, are the costs incurred from hiring outside help, which vary greatly dependent on the services provided.

But do the benefits outweigh the added expense?

Ontario advisor Brian Weatherdon thinks so. “I get really ticked with that,” he says. “I ask (advisors) why don’t you hire an extra staff member and get this headache off your shoulders? You’re capable of so much more.”

Advisors can alleviate the brunt of the added expense by incorporating a percentage into the client’s overall fees – with transparency, of course. Alternatively, an advisor could send a separate bill for the added services.

Advisors trepidacious about outsourcing also fear their clients won’t like the idea of having their personal information and portfolio handled by a third-party, according to the Northern Trust study. On the contrary, the study found that 92 per cent of advisors say their clients approved of their choice to outsource.

If you're looking to outsource, consider the following:
  • Seek out providers with a parallel investment philosophy
  • Narrow down what services you need
  • Find out the provider’s account minimums for advisor and client
  • Get a clear rundown of all the fees and costs from providers
  • Find out if the provider’s technology integrates with your technology, or will clients have their own portal?
  • Look into the transitioning in and out of plans; let’s say, for example, if a client changes provider
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