1) Outsourcing tasks through virtual staffing can provide advisers significant returns through cost savings and allowing them to focus on core client-facing activities to grow their business. 2) While outsourcing frees up time, advisers must ensure virtual staff have the expertise needed and can work independently. 3) Outsourcing is not for every adviser, as some prefer direct oversight of in-house staff, but testing small outsourced projects can help determine its fit.

1. HR/Staff
To Grow, Go Virtual
The ROI on outsourcing may benefit you
by Amy E. Bu ttell
get the right person, he or she should be
productive from the get-go, says Jennifer
Goldman, CFP®, president of My
Virtual COO, an operations outsourcing
firm for financial advisers.
“You won’t have to train them on
your CRM or worry about compliance,
because knowing about all those things
is part of their business,” she says.
To Grow, Stay Focused on Core Activities
Ginny Hudgens, president of consult-
ing firm Back Office Advisor, believes
that for advisers to grow their firms,
they need to stay within their core
competencies—client acquisition and
client engagement activities, for many
advisers. Any other focus distracts
advisers from doing what they love and
places them in the position of acting as
administrators, and that may not play to
their strengths.
“When you can use outsourcing
as a way to leverage your strengths to
N
build your firm, that’s the way to go,”
early four years after the 2008 Today, the latest advances in technology, says Hudgens. “Most advisers want to
financial crisis—and amidst including cloud computing and robust spend the majority of their time doing
small but promising signs that customer relationship management client-facing activities.”
the economy is growing again—many platforms, may help those advisers in
financial advisers are looking to grow growth mode move forward without What’s the ROI?
their practices. In fact, the 2011 RIA spending the money and resources Henry Morneault, president of opera-
Benchmarking Study 1 by Charles Schwab required in the past. tions outsourcing firm TransBridge
revealed that 87 percent of RIAs Consider the potential cost sav- Consulting, believes advisers who can
surveyed plan to grow moderately or ings of not having to onboard a new outsource a variety of tasks—from
aggressively in 2012. employee, invest in technology and administrative duties with a virtual
One way to grow without taking on office space, and pay benefits as a return assistant to high-level strategy and
a lot of overhead in terms of staffing, on investment of using virtual staff. Cost operational issues with a virtual
office space and in-house technology is savings will vary dramatically depending COO—can realize significant return on
through virtual staffing and outsourcing. on your geographic location and the investment.
The Schwab study also noted that many position you seek to fill. “I’m aware of advisers who have
RIA firms are using outsourcing and Also, training may not be needed for successfully outsourced a variety of
new technology to boost productivity. a virtual staff member, because if you functions and then are able to increase
14 Practice Management Solutions | July/August 2012 www.FPAnet.org/PracticeManagement

2. hr/staFF
the number of high-net-worth families expert, you can find one with the
served and assets under management experience to manage that function for tip: getting started
because they are able to do more you; if you need a virtual assistant who
marketing and client acquisition and has experience working on a particular
bring in three or four new clients they platform with a specific wirehouse or
otherwise wouldn’t have been able to,” broker-dealer, that is available too.”
says Morneault.
The ROI in these situations is Get Creative With Outsourcing
measurable, he notes. When it comes to outsourcing with
“You can measure the value of your an eye toward growth, think beyond
time in dollars and cents versus what the receptionist or assistant positions.
you are spending to have someone Many advisers outsource technology; Fpa’s product and services
else complete that task,” he says. “Also, they don’t have to act as their own IT directory (www.FPAnet.org/Professionals/
think about how you feel when you are department and can scale technology to Connect/ServicesDirectory) connects you to
their needs as they grow. Many are also FPA Institutional Members, com-
outsourcing other financial planning
panies that have demonstrated a
functions such as completing the finan-
commitment to the financial planning
cial plan or executing the investment profession and adhere to FPA’s Insti-
policy statement. Technology including tutional Member Code of Conduct.
“
current CRM platforms makes it easier Many of these companies can help
Technology than ever to work remotely with staff in
with outsourcing needs from turn-
including current a secure, compliance-approved fashion, key asset management programs
says Goldman. (TAMPs) to back-office support.
CRM platforms
makes it easier Not for Everyone
than ever to work Of course, virtual staffi ng and outsourc-
ing are not magic answers for every
remotely with adviser. Hudgens believes some advisers
staff in a secure, are better off with onsite staff because
compliance- they need regular in-person contact
”
to be assured the job being handled is
approved fashion. executed in a certain way.
“Some advisers work great with virtual solutions for advisers
a virtual staff, others, not so well,”
(www.VirtualSolutionsForAdvisors.com) pro-
says Hudgens. “You have to be able vides directories of virtual staff and
to delegate well and to trust that the resources. Many companies listed in
spending your time doing what you person you are hiring will get the job the directories can provide informa-
love versus tasks that you don’t enjoy. done and let them figure out the best
tion and price quotes on a variety of
If you’re spending a lot of time doing way to do that job. Not everyone has the outsourced job functions.
administrative tasks and get resentful, personality to be able to outsource.”
those feelings spill over to your staff
If you’re not sure whether outsourc-
and your clients and to the culture of ing will work for you, try outsourcing a Amy E. Buttell is the owner of Lake Effect Creative
your firm.”
small, non-client-facing project and see and is a frequent contributor to Practice Manage-
Goldman believes hiring virtual staff how it works. If that first job gets done
ment Solutions.
also provides ROI through the ability to and you are happy and comfortable, try
recruit top talent and employ that talent it again with a larger project. If not, stay Endnote
in the way that best suits your firm.
in your comfort zone with onsite staff 1. 2011 RIA Benchmarking Study from Charles
“You get expert knowledge right out members who can successfully handle Schwab, fielded February and March, 2011.
of the gate in the specific area you need
the jobs you need completed so you can Study contains self-reported data from 820
it,” she says. “If you need a compliance focus on growing your business. firms spanning 2007–2010.
www.Fpanet.org/practicemanagement July/August 2012 | Practice Management Solutions 15