Ignite 2023 as an Independent Broker-Dealer

Ignite 2023 as an Independent Broker-Dealer

It’s essential to stay competitive in today’s rapidly changing and evolving financial marketplace. Igniting your business for success is more than just a nice idea; it’s an imperative strategy for competing and thriving in an era of inflation, stock market volatility, uneasy clients, and growing Reg-BI specs. 

Fortunately, you can level up your game with one of today’s hottest solutions: hiring an Outsourced Chief Investment Officer (OCIO) can provide specialized consultations for multiple areas of your firm (and, potentially, facilitate optimized fees). This post discusses how making this move could help ignite 2023 for you, your clients, and your team.

This article discusses these topics:

  • What, exactly, does an outsourced CIO do?
  • The benefits of working with an OCIO
  • How to find the right OCIO for your business
  • Igniting your business year with an OCIO

What, Exactly, Does an Outsourced CIO Do?

The role of an OCIO is to partner with you and your team, providing experienced, high-level analytical insights. They act as a trusted advisor, utilizing their experience and years of practice in the industry to help develop strategies that may potentially help you to see increased profitability—without compromising on your core values or principles. 

Ultimately, the job of an outsourced CIO is to capitalize on a respective broker dealer’s opportunities while maintaining financial competence. This can include offering guidance in areas such as, for example, cutting-edge documentation methodology. 

This area may not be the most glamorous, but as the public calls for increasing transparency, you can’t afford to overlook it today. Your OCIO’s accountability solutions, like all others they provide, are catered to fit your firm’s (and team’s) unique situation. 

The Benefits of Working With an OCIO

As you labor to stay competitive in the financial services landscape, outsourcing your Chief Investment Officer (OCIO) can be an invaluable option. The better ones bring a wealth of experience, knowledge, and resources to your team.

And yes, I do mean “your team:” Although he or she interacts with you and (if you choose) your clients online, you can list your outsourced CIO’s bio on your website. Especially if you land one that’s a CFA® Charterholder, you can gain a possibly significant boost in prestige for your firm, almost instantly. 

In times of market volatility, when many investors are spooked into contemplating switching advisors, this could help ensure your retention. If your clients see that you’re actually adding more horsepower under the hood, your OCIO could become a sort of anchor through storms. 

Who knows? They might suggest to friends who’ve left their own wealth management that they should seriously consider yours. Keep in mind, though: This is far from the only advantage that the right outsourced chief investment officer can bring. 

Remember when I said that they could help contribute to an increase in profitability, earlier? There are multiple ways that this can happen, possibly all at the same time. To begin with, you don’t have to pay for this executive’s bonuses, benefits, or cover parking fees to accommodate them. 

Saving money as a means of improving revenue may not sound exciting, but just like tax savings, it adds up, in the long term. Again, a quality fiduciary OCIO can bring you improved prestige, potentially aiding your retention (and prospecting). However, there’s more to the possibility of increased revenue than that.

If you choose, you might have them meet directly with your clients. Meeting with an executive, practically by definition, is receiving a premium level of service. So, you could optimize the fee for doing—and perhaps consider raising your required minimum assets, while you’re at it.

Let’s call the next part “experienced speculation:” I can’t guarantee success (any more than you can for your clients), but potential HNW clients may be more likely to consider your firm because your fees are higher. Believe it or not, they may exclude inexpensive (but quality) options for goods or services—because they’re used to buying the best of everything.

A good outsourced CIO can also help you preserve your revenue through better Reg-BI compliance. By helping keep your documentation methodology up-to-date, he or she can make fulfilling your fiduciary responsibilities while providing best-in-class service much easier. Meanwhile, freed of back-office concerns, you could focus on renewing existing relationships, strategizing financial plans, and growing your client list.


Ever Wish You Could Draw More HNW Investors? We May Be Able To Help You


How To Find the Right OCIO for Your Business

Before you select an Outsourced Chief Investment Officer (OCIO) for your firm, assess their level of expertise, experience in the field, and their ability to act as a fiduciary. Put another way, kick their tires; verify that they are who they claim to be—and that they’re as legitimately certified as they claim. 

It is also important to ensure that they offer services that complement the existing resources available at your firm. At Cornerstone Portfolio Research, for instance, we don’t require (or even ask) that you disrupt your preferred strategies and service model. A lot of big outsourcing firms, in contrast, may insist that some things are done their way. 

Instead, we happily integrate our services into how you do things, expanding your capabilities. We see no reason to reinvent the wheel. As a matter of fact, just as you strive to make things convenient for your clients, we consider it an essential part of our own services to you.

Igniting Your Business Year With an OCIO

ignite business with ocio

The start of a new business year is the perfect time to consider upping your game with the education and experience of an outsourced chief investment officer. With an OCIO on your team, you can be sure that your business is fully documented and Reg-BI-compliant without having to invest further in research, infrastructure, or personnel. 

This article only provides a surface sketch of things the right candidate may be able to do for you. So, why not allow yourself to focus on running your business instead of worrying about meeting regulatory requirements or dedicating precious resources to research solutions?

During what’s likely to be another year of economic turbulence, it could be an investment in your firm’s long-term stability and growth. Contact us to learn more.

CPS eBook Reasons to Outsource


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.