Recent Fidelity research indicates organic growth rates among financial advisors have been rapidly declining, sitting at less than 4% now after being north of 8-10% only a few years ago.
It’s no secret today’s financial advisors are stretched thin, juggling the complexities of running a firm, serving their clients, and staying up to date on the latest technology and market trends. Dedicating time to marketing and business development is often challenging if not impossible.
But steady growth is imperative for firms who want to compete in a landscape that’s growing increasingly crowded, noisy, and commoditized. How can advisors a) free up the time they need to spend with clients and prospects and b) establish a compelling value proposition that cuts through the industry clutter?
The answer might not be what you expect.
Outsourcing investment management to an OCIO (outsourced Chief Investment Officer) can give your firm the one-two punch it needs of freeing up precious time for business development and relationship building while helping you establish a unique differentiator in the form of investment management.
The benefits of leveraging an OCIO include:
Elevating Your Asset Management Experience
Working with an OCIO brings institutional-quality investment management to your firm, providing a level of expertise and resources that would be challenging to build and maintain in-house.
With a dedicated team focused solely on investment management, an OCIO can monitor markets continuously and respond quickly to opportunities and risks as they emerge. An OCIO also offers access to the kind of sophisticated investment strategies typically reserved for large institutions.
This institutional approach to investment management can lead to better outcomes for your clients while helping you further prove your value with detailed market insights and analysis.
Lower Costs and Less Business Risk than In-House Solutions
As we mentioned above, it can be time- and cost-prohibitive to build a world-class investment team in-house—not to mention create significant business risks should those experts decide to leave and take their intellectual capital with them.
The OCIO model allows you to access institutional pricing and advanced capabilities at a fraction of what it would cost to build these resources internally, creating cost efficiency becomes increasingly important as your practice grows. Leveraging an outsourced investment team allows you to scale without the step-functions in cost typically associated with building an internal investment team.
Increased Focus on Client Relationships
Perhaps the most valuable benefit of outsourcing is the time savings. With a trusted OCIO handling the complex tasks of investment management, you can redirect your energy building and maintaining client relationships: understanding your clients’ needs, developing comprehensive financial plans, and addressing their broader financial concerns.
Additional time savings can be reinvested in organic growth efforts, giving you the freedom you need to develop the personalized outreach strategies necessary to attract and close new business.
Greater Client Retention and Referral Opportunities
Client retention is fundamental to long-term firm growth. As we mentioned earlier, leveraging an OCIO’s expertise into a world-class asset management experience can drive better performance outcomes for clients. In addition, OCIOs often provide sophisticated reporting and highly engaging, dynamic, and timely communication about market and economic trends, helping you keep clients informed and confident in their ability to meet their financial goals.
Enhanced Profitability Through Operational Efficiency
Depending on your OCIO partner’s fee structure, the impact of such a relationship on your bottom line can be substantial. Beyond direct cost savings, outsourcing investment management can also reduce operational overhead and fixed costs, as well as create the ability to scale more efficiently, which often leads to improved profit margins. Additionally, the reduction in compliance and operational risks can provide significant value over time.
Maximize Your Organic Growth Opportunities with an Insourced CIO
Not all OCIOs are created equal – and some offerings rely on cookie-cutter model portfolios and generic market research, which make it much more difficult for advisory firms to reap the benefits listed above.
At Helios, we coined a new term: ICIO, or Insourced Chief Investment Officer, to more effectively communicate the partnership and business impact we offer to advisors.
What’s the difference? Helios empowers advisors to deliver world-class asset management experiences that are white-labeled and fully customized, offering:
- Personalized investment models
- Portfolio analysis and design
- Holdings selection and monitoring for mutual funds, ETFs, and individual stocks
- Weekly client-facing communication, content and graphics
- Automated compliance documentation
- Training and ongoing support
Learn more about how working with Helios can help you accelerate organic growth efforts, improve client retention, and drive increased profitability at your firm. Take a closer look at our ICIO model here.