Affordable Fiduciary Investment Solutions Do Exist

Affordable Fiduciary Investment Solutions Do Exist

How can you, as an independent RIA, ensure that your clients receive the best quality investments and fiduciary advice for their needs? You might think it’s impossible to do so without breaking the bank. Fortunately, however, hiring an expensive new executive isn’t your only option. 

Outsourced Chief Investment Officers (OCIOs) can provide RIAs with greater access to more effective investment strategies and better fiduciary services than ever before. At the same time, working with the right OCIO might save you money rather than depleting your budget.

Please join us for an overview of the following topics:

  • Economic worry vs. client loyalty
  • Can your firm afford a new CIO?
  • Save money; leverage an OCIO
  • Cornerstone creates convenience

Economic Worry vs. Client Loyalty

There’s an 800-pound gorilla sitting in nearly every financial firm today: A 2023 recession could be due by summer. News reports have gradually shifted from scoffing to wondering  when it arrives and how bad it could get. Obviously, this isn’t something to emphasize with clients. Nevertheless, it’s hard to deny the possibility.

Economic worry and uncertainty, unfortunately, unnerve even veteran investors in times like these. It often begins with second-guessing their investments, but when that doesn’t magically fix things, many start wondering if another advisor knows something that their own advisor does not. 

This is why, as the economy experiences a downturn, many independent RIAs may be at risk of losing clients—and I’m not just talking about just the newcomers. Unfortunately, even longstanding, previously loyal investors can get antsy during a recession. First, their focus shifts to preserving their wealth and minimizing their losses. 

Next, if the resulting change in their investment strategy doesn’t align with the services you provide, they may get even more anxious. I’m not saying that all clients worried about the status of their investments will jump ship. However, some could begin to question the value of the services they’re paying for.

Can Your Firm Afford a New CIO?

As a small RIA, you’ve worked hard to build your book and reputation. You’ve probably spent years developing an investment philosophy and creating personalized investment strategies for your clients, as well. Assuming you have a loyal client base, you are probably growing steadily. 

In order to continue growing, you may be tempted to consider adding a Chief Investment Officer (CIO) to your team. However, before committing to that, you might want to consider whether your firm can afford the costs of bringing on a new executive. Adding a new management-level member to your team requires a significant financial commitment. 

In addition to commanding a high salary and benefits package, they will need additional resources, such as office space, equipment, and possibly even support staff. This makes it important to ask: Can your firm afford that kind of investment without sacrificing your current operations and ability to meet client needs?

Bringing on a CIO can disrupt the culture of your firm, as well. As an independent RIA, you’ve probably built a close-knit team that works well together. Like it or not, there’s always the chance that adding a new executive can change the dynamics of your team, creating tension or conflicts. At the same time, it can be challenging to find a CIO who shares your investment philosophy and fits your firm’s culture well.

Hiring a new executive might even change the way you interact with your clients: As the founder of your firm, you are likely their primary point of contact. So, adding a CIO could potentially shift this dynamic, making it more challenging to maintain the same close professional relationships. Your clients may be hesitant to work with someone they do not know and trust as much, as well.


Could an OCIO Help You Safeguard Your Client’s Portfolios Against a Recession? We Think So.


Save Money; Leverage an OCIO

Believe it or not, there is an efficient, potentially more affordable option: Rather than hiring a new executive under your brick-and-mortar roof, you could potentially save money by utilizing an Outsourced Chief Investment Officer (OCIO). This professional provides all the services you’d rely on a full-time CIO for without requiring you to provide benefits, a bonus, or even lunch space in the firm fridge.

Another advantage of working with an OCIO is the possible gaining of work hours freed up by your decision to outsource investment research. How many prospective clients could you use the extra time to pursue? If you haven’t seen growth as much growth as you hoped for, it doesn’t have to be an impossible dream. 

In many cases, the right OCIO can help facilitate access to the latest investment research and technology, as well. This, in turn, can lead to more efficient and effective asset management. It might also add the ability to scale your investment management functions up or down as needed. For example, you might need additional investment management support during a period of rapid growth, but less when there’s a slower period. 

There’s also a lot to be said for a near-instant boost to your firm’s prestige. Despite the fact that an OCIO works with you online, they join your team. In other words, you can list his or her bio on the Our Team page of your firm’s website. If they happen to be a Chartered Financial Analyst® (CFA®), for instance, that’s a pretty easy credibility upgrade.

It’s probably enough of a step up to consider optimizing your AUM. If you opt to have your outsourced CIO meet directly with clients (as some are willing to), that’s a premium service. So, you may want to think about optimizing your fees, as well. This is only one of the multiple ways in which your investment in an OCIO could possibly end up paying for itself soon.

Cornerstone Creates Convenience

There are OCIOs, and there’s the Cornerstone Portfolio Research variety. To us, providing you, your team, and your clients consistent value isn’t enough: Our approach to investment management and research, like our professional philosophy, centers around integrating as seamlessly as possible with your existing methodologies. 

fiduciary investment solutions

That’s why our process is white-labeled; we never want confusion for your clients, so we use your branding. Neither you nor your team ever has to worry about changing systems or workflows. Instead, we deliberately leverage your existing tools. Your CRM, client reporting, custodial software, and portfolio management applications are the applications we use.

There’s no need to change custodians, either. Like getting new client paperwork or deeply disrupting your clients’ portfolios, we consider the idea both unnecessary and counterproductive. Joining your team means we’re happy to work with you and, where possible, to make life easier for you; not more complicated. 

Cornerstone is a time-tested outsourced CIO for RIAs. Contact us to learn more about our investment consulting and fiduciary investment solutions.

10 Ways an OCIO can help financial advisors


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.