Can You Rise Up the Independent Broker-Dealer Rankings?

Can You Rise Up the Independent Broker-Dealer Rankings?

Are you looking to give your firm an edge in this year’s increasingly more competitive financial services industry? Hiring an outsourced chief investment officer (OCIO) may be the solution you’re looking for. In this article, we’ll explore what the OCIO model is.

Just as importantly, we’ll also consider the various ways in which a good one can potentially benefit you as an independent broker-dealer. The advantages begin with having more time to focus on your planning, nurture existing relationships, and work on growing your client list. However, that is far from the only upside.

This article discusses these topics:

  • What is an OCIO (and what do they do)?
  • Can an OCIO help you grow your business?
  • The benefits of working with an OCIO
  • What to look for when hiring an OCIO

What Is an OCIO (and What Do They Do)?

An outsourced chief investment officer (OCIO) is an executive that joins your firm’s team, working remotely to help you ensure things like Reg-BI compliance. Although he or she isn’t often present physically, they are available as needed by Zoom, telephone, email, and so on. 

A superior OCIO can also take a consultative approach, working with clients (if you like) as well as helping optimize things like your documentation process. In short, they provide seasoned professional expertise to help you make better wealth management decisions on behalf of your clients and your firm. 

You might say that they allow you to have your cake and eat it, too: You never have to pay bonuses, benefits, or even the lease on a parking space. At the same time, you gain a team member (whose bio you can list on your about-us page)  who can be every bit as beneficial to your firm as a physical, on-premises executive.

Can an OCIO Help You Grow Your Business?

An outsourced CIO can be an invaluable asset to a growth-minded broker-dealer. This happens, simply enough, through freeing you of some of your biggest behind-the-counter burdens. With experienced hands covering things like keeping your documentation methodology up to date, you can focus directly on your core competencies.

You could finally have the breathing room to pursue potential growth opportunities, as well. Utilizing an OCIO is a sound strategy for winning back time to both nurture existing relationships and seek new prospective clients. 

There are more benefits than simply recouping work hours, however. We’re talking about dropping an engine into your firm with significantly more horsepower. In a sense, that can potentially change how everything runs, day-to-day, for the better.

Landing the right outsourced chief investment officer could also be a near-instant upgrade for your firm, where prestige is concerned. Particularly if your desired niche includes high-net-worth individuals (HNWIs), that’s a huge potential boost.

The Benefits of Working With an OCIO

Imagine adding a Chartered Financial Analyst® to your roster: In sports terms, that’s like adding a financial All-Star or Heisman winner to your team—without having to hand out pampering bonuses. Meanwhile, the best OCIOs bring their talent, experience, and skills without an ego big enough to get stuck in your doorway.

Again, there’s a lot to be said for the instant prestige boost, as well. HNWIs, in particular, may value seeing credentials like that when they are checking you out. Most visitors who see an experienced CFA® may be more likely to initiate contact. We can’t guarantee anything anymore than you do, but it could upgrade your appeal, overall.

The benefits don’t stop there, either. If you decide to have your OCIO meet directly with clients, by definition, those meetings with your CIO become premium services. In other words, you may want to rethink your fees. 

While you’re at it, you might want to consider raising your required minimum assets, as well. Believe it or not, there are HNWI individuals who’d pass up the cheaper of identical financial service providers because, to them, a lower price tag means inferior quality.


Having Trouble Finding the Right CIO? That Might Actually Be for the Best.


What To Look For When Hiring an OCIO

If you’re an independent broker-dealer, finding the right OCIO means finding a Reg-BI-compliant professional. Since these regulations outline the specific obligations we have to clients regarding potential securities recommendations and campaigns, the days of winging things are over.

In fact, as calls for additional scrutiny and regulation continue, Reg-BI literacy will probably only grow more important. It is also important to seek a professional with extensive experience in financial technology. For example, modern investment management and custody platforms are increasingly moving to cloud-based technology solutions.

It bears repeating that your documentation methodology cannot be subpar, either. You must have internal controls for thoroughly documenting your policy and procedures. Similarly, you need to efficiently monitor cross-references between contracts, trade confirmations, and other transactions. 

Having an outsourced CIO involved in creating a unified plan of action for your Reg-BI documentation can help ensure that your firm remains compliant and successful both now and over the long term. As future mandates become increasingly complex, having a plan in place may be the only sure way to keep up with their demands.

Meanwhile, it’s equally important to find an OCIO who’s a good fit with your service model. You need someone who’ll integrate well into your existing systems. For instance, a good candidate won’t make it necessary to overhaul your workflow. The idea is for them to join your team as an expansion module; not as a replacement for anything. 

The Cornerstone Advantage

outsourced broker dealer

You never have to worry about reinventing the wheel when you work with Cornerstone Portfolio Research. We collaborate with you, keeping communication a top priority. Our preferred working relationships are professional, easygoing, and hassle-free—and we enjoy teaming up with people who appreciate the same operating style.

Cornerstone is an independent investment research and portfolio management firm with over 130 years of combined experience. Unlike some larger teams, we don’t believe financial advisors should have to adjust to our way of doing things. That’s why we strive to uphold your firm’s unique investment philosophy. Contact us to learn more.


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.