14 Practice Management Solutions | July/August 2012 www.Fpanet.org/practicemanagement

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Nearlyfouryearsafterthe2008financialcrisis—andamidstsmallbutpromisingsignsthat

theeconomyisgrowingagain—manyfinancialadvisersarelookingtogrowtheirpractices.Infact,the2011 RIA Benchmarking Study 1byCharlesSchwabrevealedthat87percentofRIAssurveyedplantogrowmoderatelyoraggressivelyin2012. Onewaytogrowwithouttakingonalotofoverheadintermsofstaffing,officespaceandin-housetechnologyisthroughvirtualstaffingandoutsourcing.TheSchwabstudyalsonotedthatmanyRIAfirmsareusingoutsourcingandnewtechnologytoboostproductivity.

Today,thelatestadvancesintechnology,includingcloudcomputingandrobustcustomerrelationshipmanagementplatforms,mayhelpthoseadvisersingrowthmodemoveforwardwithoutspendingthemoneyandresourcesrequiredinthepast. Considerthepotentialcostsav-ingsofnothavingtoonboardanewemployee,investintechnologyandofficespace,andpaybenefitsasareturnoninvestmentofusingvirtualstaff.Costsavingswillvarydramaticallydependingonyourgeographiclocationandthepositionyouseektofill. Also,trainingmaynotbeneededforavirtualstaffmember,becauseifyou

gettherightperson,heorsheshouldbeproductivefromtheget-go,saysJenniferGoldman,CFP®,presidentofMyVirtualCOO,anoperationsoutsourcingfirmforfinancialadvisers. “Youwon’thavetotrainthemonyourCRMorworryaboutcompliance,becauseknowingaboutallthosethingsispartoftheirbusiness,”shesays.

To Grow, Stay Focused on Core ActivitiesGinnyHudgens,presidentofconsult-ingfirmBackOfficeAdvisor,believesthatforadviserstogrowtheirfirms,theyneedtostaywithintheircorecompetencies—clientacquisitionandclientengagementactivities,formanyadvisers.Anyotherfocusdistractsadvisersfromdoingwhattheyloveandplacestheminthepositionofactingasadministrators,andthatmaynotplaytotheirstrengths. “Whenyoucanuseoutsourcingasawaytoleverageyourstrengthstobuildyourfirm,that’sthewaytogo,”saysHudgens.“Mostadviserswanttospendthemajorityoftheirtimedoingclient-facingactivities.”

What’s the ROI?HenryMorneault,presidentofopera-tionsoutsourcingfirmTransBridgeConsulting,believesadviserswhocanoutsourceavarietyoftasks—fromadministrativedutieswithavirtualassistanttohigh-levelstrategyandoperationalissueswithavirtualCOO—canrealizesignificantreturnoninvestment. “I’mawareofadviserswhohavesuccessfullyoutsourcedavarietyoffunctionsandthenareabletoincrease

To Grow, Go VirtualThe ROI on outsourcing may benefit youb y A m y E . B u t t e l l

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www.Fpanet.org/practicemanagement July/August 2012 | Practice Management Solutions 15

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thenumberofhigh-net-worthfamiliesservedandassetsundermanagementbecausetheyareabletodomoremarketingandclientacquisitionandbringinthreeorfournewclientstheyotherwisewouldn’thavebeenableto,”saysMorneault. TheROIinthesesituationsismeasurable,henotes. “Youcanmeasurethevalueofyourtimeindollarsandcentsversuswhatyouarespendingtohavesomeoneelsecompletethattask,”hesays.“Also,thinkabouthowyoufeelwhenyouare

spendingyourtimedoingwhatyouloveversustasksthatyoudon’tenjoy.Ifyou’respendingalotoftimedoingadministrativetasksandgetresentful,thosefeelingsspillovertoyourstaffandyourclientsandtothecultureofyourfirm.” GoldmanbelieveshiringvirtualstaffalsoprovidesROIthroughtheabilitytorecruittoptalentandemploythattalentinthewaythatbestsuitsyourfirm. “Yougetexpertknowledgerightoutofthegateinthespecificareayouneedit,”shesays.“Ifyouneedacompliance

expert,youcanfindonewiththeexperiencetomanagethatfunctionforyou;ifyouneedavirtualassistantwhohasexperienceworkingonaparticularplatformwithaspecificwirehouseorbroker-dealer,thatisavailabletoo.”

Get Creative With OutsourcingWhenitcomestooutsourcingwithaneyetowardgrowth,thinkbeyondthereceptionistorassistantpositions.Manyadvisersoutsourcetechnology;theydon’thavetoactastheirownITdepartmentandcanscaletechnologytotheirneedsastheygrow.Manyarealsooutsourcingotherfinancialplanningfunctionssuchascompletingthefinan-cialplanorexecutingtheinvestmentpolicystatement.TechnologyincludingcurrentCRMplatformsmakesiteasierthanevertoworkremotelywithstaffinasecure,compliance-approvedfashion,saysGoldman.

Not for EveryoneOfcourse,virtualstaffingandoutsourc-ingarenotmagicanswersforeveryadviser.Hudgensbelievessomeadvisersarebetteroffwithonsitestaffbecausetheyneedregularin-personcontacttobeassuredthejobbeinghandledisexecutedinacertainway. “Someadvisersworkgreatwithavirtualstaff,others,notsowell,”saysHudgens.“Youhavetobeabletodelegatewellandtotrustthatthepersonyouarehiringwillgetthejobdoneandletthemfigureoutthebestwaytodothatjob.Noteveryonehasthepersonalitytobeabletooutsource.” Ifyou’renotsurewhetheroutsourc-ingwillworkforyou,tryoutsourcingasmall,non-client-facingprojectandseehowitworks.Ifthatfirstjobgetsdoneandyouarehappyandcomfortable,tryitagainwithalargerproject.Ifnot,stayinyourcomfortzonewithonsitestaffmemberswhocansuccessfullyhandlethejobsyouneedcompletedsoyoucanfocusongrowingyourbusiness.

Amy E. Buttell is the owner of Lake Eff ect Creative

and is a frequent contributor to PracticeManage-

mentSolutions.

Endnote1.2011 RIA Benchmarking StudyfromCharles

Schwab,fieldedFebruaryandMarch,2011.

Studycontainsself-reporteddatafrom820

firmsspanning2007–2010.

tip: getting started

Fpa’s product and services

directory (www.FPAnet.org/Professionals/Connect/ServicesDirectory) connects you to

FPA Institutional Members, com-

panies that have demonstrated a

commitment to the fi nancial planning

profession and adhere to FPA’s Insti-

tutional Member Code of Conduct.

Many of these companies can help

with outsourcing needs from turn-

key asset management programs

(TAMPs) to back-offi ce support.

virtual solutions for advisers

(www.VirtualSolutionsForAdvisors.com) pro-

vides directories of virtual staff and

resources. Many companies listed in

the directories can provide informa-

tion and price quotes on a variety of

outsourced job functions.

“Technology including current CRM platforms makes it easier than ever to work remotely with staff in a secure, compliance-approved fashion.”

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