Everything You Need to Know About Outsourcing Investment Research

Everything You Need to Know About Outsourcing Investment Research

Outsourcing investment research can revolutionize your business. In fact, if you’re a Registered Investment Advisor (RIA), you probably have a lot on your plate. And because the past two years have been particularly volatile, managing your priorities has even more difficult than usual.

One of the reasons RIAs can often feel overwhelmed with their work—both in bearish and in bullish markets—is that they will have an instinct to try to do everything themselves. Instead of delegating your time, efforts, and resources where they can be used most efficiently, you find yourself trying to do a little bit of everything all at once.

If you’re hoping to grow your practice and take one a wider client base, learning to delegate your responsibilities should be considered and absolute must. Even if your practice is small, there are probably many different tasks, including investment research, that can potentially be managed by somebody else.

In an era where passive investing strategies have become strongly preferred to the more active, more volatile investment strategies of years past, outsourcing your investment research can be more productive than ever.

So, what are a few of the most common reasons RIAs are choosing outsourced investment research?

Access to Quality, Reliable Investment Data

In an increasingly automated and digitized era, investment research can now be conducted at a larger scale than ever before. Using a wider variety of technical indicators, macro-computing, and other useful tools, investors and advisors can dive deeper into markets and draw more meaningful conclusions. Your outsourced investment research partner will help you take advantage of these large swaths of data, ensuring that you can truly provide your clients with the best, most actionable investment advice possible. 

Increased Efficiency In-House

Every time you, as an RIA, have to commit hours of your day to doing investment research, that means you’ll be spending hours of your day away from your current clients, away from potential new clients, and away from the other essential components of your business. As an RIA, your primary role isn’t to select individual assets for your particular clients but to develop a long-term investment strategy that will feature many different assets (and bundles of assets) over time. To put it simply, no matter how skilled you might be at selecting particular investments, doing so will never be a very efficient use of your time. By having the diligence to outsource investment research, you will have more time to dedicate to the revenue-generating components of your business—this is especially true for fee-only RIAs.

Better ROI via Outsourcing

Once you’ve decided that you want to hire someone to help with investment research, the next decision you’ll need to make is whether you will hire someone to work in-house or outsource and hire elsewhere. Keep in mind, the data and research you get access to will generally be the same—but by choosing to outsource, thus removing the need for a W-2 employee, you can avoid quite a few costs and enjoy increased financial flexibility. This is why, according to a recent study published by TDA Institutional, 71 percent of RIAs will outsource at least one function, including 58 percent who choose to outsource investment research or management.

Increased Client Satisfaction

Your clients likely come to you with a wide variety of different needs. Though they will certainly have a lot of questions about different investment strategies, most of their concerns will typically be with the structure of their portfolio, rather than one particular asset or even asset class. In order for your clients to be happy, it becomes critical to spend the time you give to clients as efficiently as you possibly can. When you’re not tied down with investment research, you’ll have more time to answer their questions, develop a big picture thesis, and nurture your relationships in a meaningful way.

The Ability to Attract More Clients

There are several reasons outsourcing your investment research needs can help your firm attract more clients. Naturally, every moment you spend away from technical analysis and spreadsheets is a moment you can spend servicing your existing accounts and nurturing your current leads. But additionally, having a committed investment research team can help improve the perceived credibility of your current firm. It doesn’t matter who you are or how great your background might be—prospective clients will almost always prefer to hear “we have an incredible investment research team to help you discover high-potential investments” instead of “I do all the investment research for my clients entirely on my own.” With an outsourced partner, these clients can be confident that they will be getting the attention they deserve and will not have to worry about their RIA neglecting them or being spread too thin. 

Cooperation and Synergy

In the competitive financial sector, developing mutually beneficial relationships will be key for your long-term success. When an RIA is able to partner with an experienced investment research team—a partnership that is made possible through outsourced CIO services—both parties will be able to benefit from each other’s strengths, while also covering for each other’s weaknesses. When you become a part of a broader team, you’ll have access to a wider array of prospects, you’ll be able to operate at a higher capacity, and your entire enterprise will appear more operable to any outside observer. In an era characterized by increased specialization and compartmentalization of particular tasks, partnerships between RIAs an outsourced CIOs can easily be justified.


To run a successful investment advisory firm, you’ll need to start by learning two basic things: when to let things go and how to delegate effectively. When you first created your business, you may have envisioned yourself conducting all investment research—but refusing to delegate, ultimately, will end up holding you back. Outsourcing investment research can help your firm continue its growth, without sacrificing the quality of service you provide.

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.