Outsource to move your business forward

24th October 2018

Most financial advisers and planners want to grow their business. Increasing turnover, assets under management, client numbers or net margins are all typical measurements. Naturally, objectives and goals will differ from firm to firm and only you will know the right combination for your business.

Irrespective of how you choose to measure growth I often wonder what separates the advisers and planners who achieve their goals from those who don’t. The ability to attract new clients is certainly one of the key ingredients. So is recruiting, retaining and training the right members of the team. I’d suggest the third element is a laser-like focus from the business owners.

I’ll resist the temptation to trot out the tired old clichés. If I never hear ‘only do what only you can do’ again I’ll die a happy man! However, while clichés, they are nevertheless true.

That’s why I believe that to successfully grow a financial planning practice, business owners should concentrate on two things:

  1. Their clients (assuming they continue to advise, not all business owners do)
  2. Business development / growth

In my view, everything else from investment management to HR, marketing to compliance, is a candidate for outsourcing, giving you time to focus on these two elements.

The benefits of outsourcing

For me, there are two key benefits to outsourcing; it frees up time and gets a true expert on the case.

In a vain attempt to save money I often see business owners attempt tasks themselves rather than outsourcing. This usually results in the task being completed to a lower standard and taking longer to finish than if it were outsourced.

It’s a false economy too; while outsourcing will increase costs, it frees up billable time for the adviser or planner, usually at a higher hourly rate than the outsourcing provider will charge.

The importance of expertise shouldn’t be underestimated either. There are many areas where an adviser or planner might have some knowledge but perhaps not the specialism that’s needed.

HR is a good example; writing policies, keeping up to date with changes to legislation, dealing with issues when they arise are all vital tasks, but that doesn’t mean you should do them. Better to outsource, get a true expert who will complete the task to a higher standard and free up your time to concentrate on seeing clients and building your business.

There are plenty of other tasks I would consider outsourcing as the owner of an advisory or planning firm. I’d start with investment management.

As I’ve said before, the days of using a copy of Money Management, a rule and a highlighter pen, to pick funds are thankfully over. It’s becoming more accepted that advisers and planners aren’t best placed to pick investment solutions for their client. It’s not generally their area of expertise, they usually don’t have the same resources as third parties and it isn’t the part most clients value.
So why do it? Surely it’s better to outsource, save time which can be used more productively elsewhere and get experts on the case.

The same applies to compliance. Most financial planning firms aren’t large enough to warrant a full-time in-house compliance solution, while a lack of outside scrutiny can lead to ‘group think’ and introduce unnecessary risk. Again, better to outsource it to bring in valuable expertise and free up time.

I’d then look to outsource other key functions including marketing and finance to specialists. Naturally, the business owners take ultimate responsibility, but they shouldn’t be involved in the day to day nitty gritty, which could be done far more effectively by experts.

Avoiding blockages

There’s another reason why outsourcing is so valuable; it prevents blockages being created.

We’ve all seen advisory or planning firms where the owners micro-manage every element. Aside from the frustration this creates in their team it also creates huge blockages and backlogs of work.

Outsourcing can solve this issue.

It means tasks get completed on time and to a higher quality while releasing business owners to concentrate on advising clients and building the practice. In turn, the business will grow more quickly.

As you would expect we practise what we preach.

Our partners can outsource key tasks, including marketing and investment management, giving them time to focus on their clients and developing their business allowing them to truly ‘let go and take control’.