Save Time and Make Money When You Hire an Outsourced CIO

Save Time and Make Money When You Hire an Outsourced CIO

What if we told you that—even during times of volatility—you can still save time and make money? If you are close to stressing out, keep reading. We believe, especially now, that an outsourced chief investment officer (OCIO) is a potentially game-changing ace up your sleeve.

Like you, we cannot make guarantees (because we cannot claim to see the future). Nevertheless, for the reasons detailed below, we are convinced that hiring an OCIO could help you reclaim hours of your life and potentially help you to see increased profits from your firm.

This article answers the following questions:

  1. What is an OCIO?
  2. Can outsourcing your CIO save you time?
  3. Is it possible to make more money with an OCIO on your team?
  4. How might an OCIO make it easier to reconnect with clients?
  5. Should you consider increasing your fees for new clients?
  6. What criteria should you use to assess an OCIO’s performance?

What is an OCIO? 

An OCIO is a professional investment manager who oversees the investment activities at a firm. They have a wide range of possible responsibilities: They can manage your portfolio or make recommendations to the board of directors, or they can monitor the performance of your investment managers.

Alternatively, they can communicate with investors and prospects. They can prepare investment policies too, and manage portfolio risk. In other words, they can take on as much or as little as you choose to delegate. However, for best results, we recommend assigning them as much of your asset management as possible. 

Time Saved Equals Money Made

Hiring an OCIO can allow you to optimize your fees by reducing the costs associated with hiring multiple employees whose responsibilities overlap. You might say they are the best of both worlds: They join your team (to the point that you can list their bio on your website), yet they work only for their fee; there is no salary, benefits, or bonuses to pay. 

As a result, your fee structure can be simpler for clients to understand—because it can be based on one fee rather than several. You may be able to charge more for your services because of the expertise, experience, and prestige a fiduciary outsourced CIO can bring. 

Similarly, you might want to consider raising your minimum required assets, as well. Many people don’t realize this, but if you’re looking for an OCIO, it’s possible your minimum required assets are too low to make managing them yourself worthwhile. By hiring someone who specializes in managing large portfolios, you can raise your minimums without any additional risk on your part.

Meanwhile, outsourcing investment management services can allow you to focus more on relationship-building, since your OCIO can perform many tasks that would otherwise require your focus. When other advisors are struggling for retention, you can relax, knowing that everyone is receiving the same level of personal attention—and reassurance, given today’s volatility—that they signed on for. 

You can often hire an outsourced chief investment officer who has more than one employer, if you choose. This means you’ll be able to tap into their experience without having to compete with other companies for their time.

An OCIO may have access to a wider range of products than you can get on your own, as well. Best of all, the reputable ones also have experience in the industry, which they can use to help ensure that you get the best possible service, research, and management. 


Read Our Complimentary eBook, “12 Reasons To Outsource Your Portfolio Management,” Here.


New Prospects, New Rates?

A strong financial team will make it easier for you to close deals with confidence. So, it may be time to consider charging new clients more than you have been. In addition to being a good way to attract new clients, this can also help build your credibility and enhance the value of your product or service.

To capitalize on this potential new momentum, possibly increasing your sales pipeline, consider doing the following:

  1. Get your numbers in order. Before you can grow your pipeline, you need metrics. These can help you determine how much larger it needs to be. Additionally, your outsourced portfolio manager may be able to help you identify opportunities that would have been missed otherwise—and then track their progress through the sales process.
  1. Share information about every deal with your OCIO. This helps him or her to keep things moving forward smoothly. They may also be able to offer suggestions for improvement if something isn’t working well, as a result. For example, if a prospect isn’t responding to emails or calls within a certain time frame, a quality outsourced CIO can help you decide when to let them go.

Consider Optimizing Your Existing Clients’ Fees, As Well

If all goes well, you may want to raise your rates for existing customers while you are at it. You would not be increasing the cost of doing business by doing so; just changing the way it is allocated. For example, if you currently charge $500 per month per investor and have ten investors, that’s $5,000 a month in revenue. 

If you decide to hire an outsourced CIO and then raise your fees by $100 per month per investor, you’ll still have ten investors. However, now they will be paying $600 each instead of $500 for your services.

Verify That Your OCIO Is on the Level

Performance analysis

Once you have hired an outsourced CIO, you will want to make certain that he or she is doing everything that they are supposed to. Just like a fiduciary financial advisor, the better OCIOs take pride in keeping transparent and accountable.

This is why we suggest reviewing their performance metrics regularly. That information includes the kind of qualitative and quantitative data points that help companies see how they’re performing in areas like revenue growth, client retention, and so on. 

Contact us today 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.