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Three Ways Independent Advisors Benefit from Outsourcing Investment Management

Outsourcing Investment Management is proven to benefit both Advisors and their clients. In fact, 78% of Advisors who have embraced the practice wish they had done so sooner.1  

But many Advisors still fear outsourcing this central part of their business – feeling they need to keep all activities in-house to maintain control or fear that they have tied their value to their clients to this notion that they need to manage the assets in house. 

This article reveals why every Advisor should consider outsourcing Investment Management, along with some proven guidance to help you to make the transition. 

Three Benefits of Outsourcing Investment Management 

  1. Stronger Client Relationships

The most immediate effect of outsourcing Investment Management is a big increase in free time for Advisors. Advisors that outsource 90-100% of Investment Management tasks save 8.4 hours per week, while those that outsource 20-49% save 5.8 hours per week.2  

This can transform your work-life balance and lighten your often-overwhelming workload. But the real benefit of this extra time is the opportunity to deepen your relationships with existing clients and prospect for new ones.  

Amongst Advisors that outsource Investment Management:3 

  • 68% say it resulted in stronger client relationships 
  • 67% say it led them to acquire more new clients 
  • 65% say it increased client retention 
  • And 48% say it increased client referrals 
  1. Improved Investment Services

Another major benefit of outsourcing is access to specialized investment options. This allows Advisors to expand their offering and ultimately deliver a level of service that stands out from competitors.  

Outsourcing Investment Management enabled4: 

  • 60% of Advisors to access a broader range of investment products  
  • 47% to incorporate unfamiliar investments 
  • 42% to access new categories of products 

But most importantly, 98% said they were able to offer better investment solutions for their clients.5  

  1. Faster Growth

The combination of deeper client relationships and better investment services inevitably leads to faster business growth. Advisors are free to focus on networking, marketing and other value-generating activities – which translates into multiple tangible improvements to their finances. 

87% of Advisors who outsource 90-100% of their Investment Management tasks grew their total AUM, with an average increase of 41%. Better still, these Advisors also saw an average 25% decrease in operating costs.6 

The net result?  

Their personal income grew 47%.7 

What Are the Challenges of Outsourcing for Asset Managers? 

Given the benefits explored above, it’s hardly surprising that 42% of Advisors who don’t currently outsource Investment Management have considered doing so.8 But they face two challenges when making the transition to an outsourced model. 

The first is navigating client push-back. Most Advisors have built their business by telling clients that managing money was their value prop. Outsourcing undermines this claim and the fear is that it may lead clients to feel their investments may not perform as well 

The second is managing the extra costs. If clients are already resistant to the idea of suddenly changing how their investments are managed, it is hard to convince them to increase their fees for the privilege.  

Fortunately, these two challenges can be solved in the same way: by telling clients a persuasive story about the new approach. This blog provides the basis for this, including: 

  • The extra time you’ll have to ensure their needs are met 
  • The extra investment options they’ll have access to 
  • The proven improvements to portfolio performance outsourcing brings 

But if you need further support, we have the perfect solution. 

Outsource Investment Management with RFG Advisory 

RFG Advisory delivers the first fully supported independent model for Advisors. Bluemonte, our Outsourced Chief Investment Officer (OCIO) service, grants our Advisor Partners access to a full suite of concierge-level services, including: 

  • Having a member of our expert team speak to clients at a convenient time, either in person or via webinar 
  • Regularly recorded market commentaries 
  • Daily market updates 
  • And unlimited access to Rick Wedell, our Chief Investment Officer with over 20 years’ of industry experience. 

The result? 

Advisors are free to focus on their most important job: servicing clients.  

Are you supported in your independence? 

If not, let’s talk. 

Book a Consultation 

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End Notes: 

1-8. https://s32566.pcdn.co/wp-content/uploads/2021/10/The-Power-of-Outsourcing-Investment-Mngmt-Whitepaper.pdf 

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