% of Accounts Managed by Advisor / Team or Outsourced

Between 25% and 50% of financial advisors today outsource some or all of their investment management functions.

Benefits to outsourcing include: 1) Relieves the burden – and costs – of account administration (investment management comes with in-house costs to your practice in the form of back office operations, market and investment intel software, and investment management technology - it may not make sense to spend the money required for in-house investment management and the ongoing upgrades required, depending on your situation); 2) Allows financial advisors to focus on value-added activities (outsourcing the investment management part of your practice may free up more of your time which you can better spend engaging with clients, providing them with more attention to their overall financial planning services. You can just “manage the managers” on behalf of your clients to help ensure performance, and to make sure objectives are being met); 3) Generates more revenue (advisors able to spend more time nurturing clients and prospects bring in $1 million more in revenue over a 10-year period than those who manage their clients’ portfolios in-house, according to a study conducted by SEI Advisor Network and FP Transitions); 4) Eliminates any potential conflict of interest that may exist when your firm both creates financial plans and implements the investments. By outsourcing, a firm can “maintain a more objective posture in analyzing and critiquing client investment performance”; and 5) Enhances credibility if your firm doesn’t have strong investment credentials on paper.