Accelerate the Growth of Your RIA in 2022 with an Outsourced Chief Investment Officer

Accelerate the Growth of Your RIA in 2022 with an Outsourced Chief Investment Officer

Let’s make a few assumptions about your RIA for 2022. Let’s assume your number one priority is to make 2022 a break-out year for new clients, assets, and revenues. 

You know there is a good chance 2022 will be a more volatile year and that means more investors will be replacing their financial advisors or seeking their first advisors. You know how the DIY’s are Bull Market geniuses, but head for the exits when the markets are more volatile. That is when they want professionals investing their assets.

This could be a year of substantial growth for your firm.

A few additional thoughts may describe your current situation:

  • You are a relatively small RIA 
  • You have to wear several hats at your firm
  • You have some significant budget constraints
  • You would be more successful if you had more time
  • You want to focus on sales and service
  • You are thinking about outsourcing investment management to an  experienced CIO

Ready to outsource your investment management services?  Learn more about the benefits. 


How can you make your RIA more competitive?

This starts with what investors see when they use the Internet to find and research RIAs. There is an 82% probability they are going to visit your financial advisor website and a 64% chance they are going to Google search the names of your firm and the professionals who work there.

What they see on the Internet forms their first impressions of financial advisors.  And, that first impression determines who they contact for more information and interviews. It is the difference between winning and losing.

Even more telling is that one of the most frequently visited pages on financial advisor websites is the Our Team page. The more robust the team, the more competitive the RIA will be. That’s because it can be very difficult to convince investors, that don’t know you or the firm, that one professional can be an expert in all of the financial disciplines. This is even a more difficult sale when you have competitors that have teams of professionals delivering financial advice and services to investors.

Expanding your team with an Outsource Chief Investment Officer will make your firm more competitive.

How can an Outsourced Chief Investment Officer create more time so you can grow your business?

Have you ever heard this question: “Who is managing my money if you are out meeting with prospective clients and current clients?” This is one of the primary concerns that can be expressed by investors who believe managing money is a full-time job.

We believe your biggest asset is the specialized knowledge you possess that helps your clients achieve their financial goals. The more knowledge you have the better prepared you are to help your clients solve financial problems, prepare financial plans, and invest their assets for them.

Clients benefit when they get the best thinking from a team of qualified professionals.

I would submit that your second biggest asset is how you allocate your time. Sales and service may be at the top of your priority list. You may also be the senior planner at your firm. The more time you allocate to growing your business the faster you will add new clients.

An Outsourced Chief Investment Officer is a source of time. This OCIO will take on the responsibility for conducting research, allocating assets, and making buy/sell decisions to name just a few of the OCIO’s contributions to the amount of time you have available for sales and service.

How can an Outsourced CIO make your RIA more competitive against other firms your size?

The answer is pretty simple, bigger firms have CIOs and smaller firms do not. This becomes a major differentiating characteristic because most investors want to know who will be making the investment decisions for their assets.

The vast majority of RIAs have less than $100 million of AUM, according to AdvisorCouncil. These firms usually employ one or two financial professionals (owner/partner) and one or two administrative staff who keep their businesses running.

What happens if you add an Outsourced Chief investment Officer to your staff? Not only are you more competitive against bigger firms that employ this type of professional, you are a lot more competitive against firms that are smaller than you. In effect, you are selling the role of the Chief Investment as one more differentiating characteristic and a primary reason for selecting your firm. 

Do not under-estimate the impact of a CIO on the selection decisions of investors. You may lose to another RIA and never know the reason why. What caused investors to select other firms and exclude your firm? Very few financial advisors ask investors why they selected another firm. But, they should. The information will help them convert weaknesses into strengths.  

Is freeing up time to market your RIA a blessing or a curse?

Let’s face it, some financial advisors are better planners than they are marketers. In fact, some advisors do not even like marketing for two reasons:

  • They do not have steady flows of new leads to talk to each month
  • They view marketing as a waste of time due to excessive rejection and poor results

So, why free-up time, by outsourcing to a CIO, if the additional time cannot be put to productive use. If these hurdles did not exist, more financial advisors would be more inclined to do more marketing. 

The good news is there are simple solutions for producing more leads each month and the old outbound marketing tactics that produced the high rejection rates are largely obsolete.

With these solutions in place, more financial advisors will be inclined to free-up time they can spend marketing their firms to prospective clients. 

How can a CIO help you grow your RIA?

When you manage a critical mass of assets, it stands to reason that your primary source of growth during positive markets is market appreciation, reinvested income, and new money from current clients. All three sources are impacted by the professional(s) who is/are responsible for the management of your clients’ assets.

The more competitive your returns the higher the probability satisfied clients will add assets to their accounts and refer your firm to their friends, families, and associates.

An Outsource Chief Investment Officer can also participate in your marketing process. Visualize a Zoom call that includes you, the CIO, and your prospective client. How valuable is it when the investor can talk to your firm’s CIO? Chances are your smaller competitors do not have CIOs and the CIOs for bigger competitors are not readily available to talk to prospects unless their potential accounts are in the millions.

CPS eBook Reasons to Outsource

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More about the author: Thomas Balis

Thomas holds a Bachelor of Science in Business from Ohio State and has since earned the Chartered Financial Analyst® (CFA®) designation as well as the Accredited Portfolio Management Advisor (APMA®) and Chartered Mutual Fund Counselor (CMFC®) certifications.