Fall in Love With an OCIO’s Impact on Your Broker-Dealer

Fall in Love With an OCIO’s Impact on Your Broker-Dealer

As an independent broker-dealer, you know that time is money. You’re constantly on the go, working to meet client needs and ensure success. An Outsourced Chief Investment Officer (OCIO) can help you do just that—while reducing the time you have to spend on back-office issues like compliance. 

In fact, by providing a comprehensive suite of services that are Reg-BI compliant, you can potentially free up your team and increase your firm’s prestige. There’s a lot to love about that. So, let’s break down how an OCIO model can benefit your firm.

This article covers the following topics:

  • What is an OCIO & what do they offer to firms?
  • How an OCIO can benefit your firm, specifically
  • The increased prestige an OCIO brings to a team
  • How recouped time can potentially increase profits

What Is an OCIO & What Do They Offer to Firms?

An outsourced chief investment officer (OCIO), is a professional who provides investment management services to a financial firm. This executive helps make sure that all investments are compliant with Reg-BI and that all the documentation is in order. That’s not all the better ones do, but for our purposes here today, these are the most essential.

Before we dig into those benefits, let’s look at how they can save you money, as well. Hiring an OCIO spares you much of the expenses normally associated with bringing a seasoned executive under the roof of your brick-and-mortar office. For starters, you don’t have to worry about bonuses or benefits. He or she joins your team, full-time, but there’s no office equipment to lease, no parking space to provide… It’s generally much easier. 

And I mean the part about them joining your team: Although most, if not all interactions are online, you can list your OCIO (and the bio) on your “Our Team” or “About Us” page. There’s a lot to be said for what it can do for your curb appeal, but we’ll get into that later.

How an OCIO Can Benefit Your Firm, Specifically

A major benefit of the OCIO model involves recouping time that would otherwise be spent researching and strategizing. When you outsource your CIO role to a third-party provider like Cornerstone Portfolio Research, you can have access to an experienced industry professional for making sure that your investment portfolios are 100% in step with the latest Reg-BI requirements.

When you have to devote less time to administrative tasks, you can focus more on nurturing client relationships. One upside of market volatility is that many investors are either switching advisors or thinking strongly about it. By strategically deploying an outsourced CIO, meaning by freeing up your schedule (and to some degree, potentially that of your team), you could be in a much better position to pursue their business. 

Ensuring your firm’s compliance and reducing your back-office workload is far from all that a good OCIO can do, however. Adding the right one to your roster can also bring a near-instant prestige boost, but we’ll get into that in the next section. Bringing in an OCIO could potentially boost your revenue in a couple of ways, but that, as well, is discussed a little further below.


Looking for More Reasons To Consider the OCIO Model? Here’re 12 in a Free eBook.


The Increased Prestige an OCIO Brings to a Team

In addition to freeing up time, outsourcing the CIO role also increases the prestige of your firm—by capitalizing on the expertise of an experienced professional with decades of experience in the financial industry. HNWI’s seldom entrust their savings and assets to just anyone. 

Chartered Financial Analysts® don’t grow on trees. So, imagine what bringing one from Cornerstone onto your team could do for your curb appeal. This era of closer scrutiny can mean people doing far more research before reaching out. So, make the most of the exposure by making sure that they see CFA®-level horsepower under your hood. 

If you’re looking for a relatively easy way to stand out among your peers, this is it. Ultimately, it can also lead to an elevated profile for your firm within the financial industry. There’s a lot to be said for resting assured that your compliance, documentation methodology, and pull with passersby have all been boosted, but again, that’s not all there is to it.

How Recouped Time Can Potentially Increase Profits

time and money, OCIO

For any firm looking to increase its profitability, having an outsourced chief investment officer on your team can become an unprecedented asset: A quality OCIO can look at your finances from a bird’s-eye view, providing valuable insights into where possible opportunities lie as well as watching out for any potential downfalls before they occur. 

Meanwhile, limited personnel can juggle multiple tasks simultaneously without concern for compromising due diligence or any spending standards. This is how the seasoned, accredited experience of a well-vetted OCIO can facilitate informed decisions and effective research. These, in turn, can help you regain—not just the firm’s time, but—energy and resources in the long run. 

No, we still haven’t covered all the long-term potential benefits yet. Add in the fact that if you choose among the tasks you delegate, you could opt to have your OCIO meet directly with clients upon request. Because they’d be meeting with one of your executives, that, by definition, is a premium service. 

Premium services, of course, normally come with a higher price tag. You might even want to consider optimizing your fees, overall. At the same time, you also might want to consider raising your required minimum assets: Some HNWIs and UHNWIs, believe it or not, won’t even sniff at the services of a firm whose pricing appears too low.

Your team’s planning might be the most incredible bargain currently available, but that’s irrelevant: To people who’re accustomed to paying premium fees for premium service, low prices suggest inferior quality. They have neither the time nor the inclination to investigate what appears, to their eyes, to be the shallow end of financial planning.

We can’t guarantee success for our clients any more than you can for yours. However, we believe, strongly, that adding an OCIO to your independent broker-dealer team is one of the simplest ways to give your firm a rare edge. 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.