{"id":450,"date":"2022-04-15T18:12:09","date_gmt":"2022-04-15T22:12:09","guid":{"rendered":"https:\/\/cornerstoneportfolioresearch.com\/?page_id=450"},"modified":"2023-12-18T12:07:41","modified_gmt":"2023-12-18T17:07:41","slug":"how-outsourced-investment-management-can-help-you-build-a-better-business","status":"publish","type":"page","link":"https:\/\/cornerstoneportfolioresearch.com\/how-outsourced-investment-management-can-help-you-build-a-better-business\/","title":{"rendered":"How Outsourced Investment Management Can Help You Build a Better Business"},"content":{"rendered":"
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You give 100% to delivering massive value every day. So, here\u2019s an important question: Are you prepared to micromanage 100% of your AUM this year?<\/p>\n
We think the market\u2019s unlikely to settle down anytime soon. In fact, if 2022\u2019s initial trends continue, the seas will only get rougher.<\/p>\n
Unless you\u2019ve got a cloning vat stashed somewhere for copying yourself, you\u2019ll need\u00a0<\/i>help. That may include a CIO. However, if your budget isn\u2019t massive, you may not be able to afford an in-house hire.<\/p>\n<\/div>\n
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Consider your options. Your principal could serve as your chief investment officer.<\/p>\n
That\u2019s a tall order<\/strong>,<\/a> though. They\u2019ll need a skill set capable of juggling investment solutions, trading, estate planning, and more.<\/p>\n You could hire someone for the role. However, without deep pockets, this option may be out of reach.<\/p>\n On the other hand, you could outsource your CIO. Many TAMPs<\/a><\/strong> and SAMs are eager to take lots of your money, as well.<\/p>\n However, here\u2019s the good news: These aren\u2019t your only options. Outsourced Chief Investment Officers<\/a><\/strong> are a rising part of the financial industry.<\/p>\n In fact, these independent contractors\u2019 AUM is expected to grow annually at 7.5% into 2025<\/a><\/strong>. That may be because they can be cheaper than traditionally-employed CIOs or 3rd<\/sup> parties.<\/p>\n An OCIO does<\/em> join your team, but there\u2019s no salary, bonus, or benefits to pay. Meanwhile, their basis point rate can be far below that of a SAM or TAMP.<\/p>\n An outsourced CIO can also bring…<\/p>\n An OCIO means less overhead compared to in-house solutions; which can result in fewer headaches for you. Whether your firm\u2019s an RIA, Broker-Dealer, or a hybrid, you\u2019re freed to focus on giving clients your best.<\/p>\n<\/div>\n <\/section>\n The possibility of saving money isn\u2019t the only advantage of an outsourced CIO. As a matter of fact, we believe it\u2019s only the tip of the iceberg.<\/p>\n We believe that an OCIO can take a more thoughtful approach to management. For example, a TAMP may take clients\u2019 portfolios and arbitrarily slash and burn.<\/p>\n Everythin<\/i>g\u2014not just losers\u2014might get the boot. In multiple senses, your clients may only be numbers to that 3rd<\/sup> party.<\/p>\n In contrast, we believe that a top-notch OCIO tends to consider people\u2019s investments more carefully<\/a><\/strong>. If something\u2019s glaringly bad, they get rid of it. Otherwise, assets often get timed.<\/p>\n This, in turn, means clients can have confidence in the consistency of your investment program. As their best numbers grow, your confidence will too.<\/p>\n However, industry-wide stats are there, too: In 2020 alone, OCIO assets under management rose to $2 trillion<\/a><\/strong>.That\u2019s $1.6 trillion more than in 2019.<\/p>\n A decision to outsource financial research<\/a><\/strong> could be one of the best you\u2019ll ever make.<\/p>\n<\/div>\n<\/div>\n <\/section>\n Yes, but don\u2019t get lazy. Hiring an OCIO doesn\u2019t mean you stop earning your paycheck.<\/p>\n At the same time, it can<\/i> make things far easier. For instance, the more satisfied people become with your planning, the more of your client base may stay with you.<\/p>\n Nothing encourages people to keep you in their corner, long-term like a solid investment portfolio.<\/p>\n It can even create a sort of snowball effect: successful clients may tend to stay on board. As a result, their stories can encourage new conversions.<\/p>\n Input from a superior outsourced CIO you\u2019ve been working with benefits those new clients. So, those clients can remain with you, as well.<\/p>\n However, we live in uncertain times. What the market does in decades ahead is anybody\u2019s guess.<\/p>\n That\u2019s why peace of mind is such a value-add. It\u2019s sometimes overlooked, but it\u2019s priceless. In addition to investment strategies, some advisory clients need emotional hand-holding from time to time.<\/p>\n When headlines have their heads spinning, you can counter with solid analysis. Give them talking points; facts-based reassurance.<\/p>\n You don\u2019t need a crystal ball. Just remind them of what your team (including your OCIO) has built together with them. Next, affirm that whatever the market does next, you\u2019ll be with them, adjusting strategies as you deem necessary.<\/p>\n<\/div>\n<\/div>\n <\/section>\n <\/p>\n Your clients aren\u2019t the only ones who could directly benefit: Outsourced investment management can help you reclaim hours and days.<\/p>\n It\u2019s time-consuming developing investment strategies, managing staff, and covering so many other bases. When your plate\u2019s that full, something\u2019s got to give.<\/p>\n How much of your work life could you reclaim\u2014simply by offloading meetings, wholesaler calls, and compliance tasks?<\/p>\n You could get back to targeting prospects more often. You\u2019d be free for relationship-building with more clients, too.<\/p>\n Let\u2019s face it: Even your personal life might benefit from getting things back in balance.<\/p>\n Nobody gets ahead without ambition. At the same time, endless stress is harmful to human physiology and psychology.<\/p>\n The more extraneous stuff you get off your plate, the more you can focus on what matters. This applies 24\/7; inside your practice and when you\u2019re off the clock.<\/p>\n We\u2019re not promising Utopia at home or at work, but generally speaking, simpler is usually better.<\/p>\n<\/div>\n<\/div>\n <\/section>\n Yes, you read that right. We cannot promise this, but it\u2019s possible.<\/p>\n Directly interfacing with your CIO is a higher-tier service. So, it only makes sense to make that into a premium feature.<\/p>\n Believe it or not, prospects that are accustomed to higher levels of service may find that appealing. Conversely, those holding larger assets sometimes find a lack of premium offerings off-putting.<\/p>\n This is because they see that lack as an indicator. To them, it signals the absence of their kind accommodation.<\/p>\n These are the kinds of considerations occupying leadership\u2019s thoughts at growing firms. They shouldn\u2019t become your sole focus, but bringing on the right OCIO can eventually bring them into play.<\/p>\n We\u2019re not promising instant growth<\/strong><\/a> either, but if you hold up your end of the bargain, it\u2019s probably within reach.<\/p>\n<\/div>\n <\/section>\n <\/p>\n Nobody\u2019s saying \u201cGet greedy.\u201d Nevertheless, you must <\/i>avoid spreading yourself too thin if hiring an OCIO takes things next level sooner than you\u2019d expected.<\/p>\n So, optimizing your fees may be something you owe existing clients and your future clients to-be. If this sounds counter-intuitive, please read on.<\/p>\n Let\u2019s start with an example: Have you ever gotten food from a restaurant that\u2019s begun watering down sodas and cooking with inferior ingredients?<\/p>\n If that rings a bell, you know what happens next.<\/p>\n It doesn\u2019t matter if their rent\u2019s gone up. Regardless of how many stellar meals you may have enjoyed from that restaurant before, you\u2019re probably done.<\/p>\n It\u2019s nothing personal. In fact, it could be a very fond farewell. Nevertheless, in all likelihood, you won\u2019t be back.<\/p>\n There\u2019s a moral to this story for financial advisors: Never<\/i> saddle yourself or your firm with serving ever-blander versions of your advisory cuisine.<\/p>\n It\u2019s noble to want to help the world handle their money better. However, it\u2019s generally wiser to screen\u2014and thereby limit\u2014your inbound prospects.<\/p>\n A higher fee won\u2019t fit everyone\u2019s budget. As a result, the measure can mean offloading some clients… but sometimes you have to do what you have to.<\/p>\n When taking a step means you won\u2019t have to worry about bankruptcy<\/a><\/strong> and that\u2019s a good sign.<\/p>\n There\u2019s something to be said for leveraging the horsepower of a CFA\u00ae Charterholder too. That\u2019s a certification that doesn\u2019t grow on trees.<\/p>\n Put simply, this can be a big prestige boost. It lends credence to raising your minimum asset requirements and optimizing your fees, as well.<\/p>\n You can look prospects in the eye, securely aware of the clear value this adds to your services.<\/p>\n Avoid getting complacent, though. At the end of the day, you still have to provide optimal fiduciary value.<\/p>\n As long as you do, having an outsourced CIO can bring a massive power-up for your brand\u2019s reputation.<\/p>\n<\/div>\n<\/div>\n <\/section>\n It gets even better. You may want to set higher goals\u2014because potentially, there are additional golden rings potentially within your reach.<\/a><\/strong><\/p>\n If it helps, we believe you can think of your outsourced chief investment officer<\/a><\/strong> as an additional gourmet chef added to your advisory restaurant.<\/p>\n Competing with industry giants may have been risky before. Now you can have a fighting chance<\/p>\n No\u2014it\u2019s not<\/i> a dream. At least it doesn\u2019t have to be, anyway.<\/p>\n The differences between large advisory firms and an RIA, for example, are profound. They don\u2019t mean the odds are all in the house\u2019s favor, though.<\/p>\n Granted, a mega-firm has deep pockets. That\u2019s a given, but they have weak spots, too. The most obvious may be their service.<\/p>\n They may have a nationwide franchise of tasty mass-produced asset management. So what?<\/p>\n Many people prefer the flavor that only local, from-scratch advisory cooks can deliver.<\/p>\n Especially if you\u2019re focused on a niche, big firms may not be able to compete as well as you\u2019d expect. Some clients may seldom interact with a human advisor in person, but you<\/i> can meet your clients face-to-face, every time.<\/p>\n A huge firm\u2019s vast client base requires mass-marketing, as well. The big names have gotten shrewder than they used to be, but they still send out cookie-cutter approaches, as a result.<\/p>\n It doesn\u2019t happen as often as it once did, but those expensive outreaches sometimes fall laughably flat. It\u2019s better to focus on winning for clients than gloating over their failures, though.<\/p>\n<\/div>\n<\/div>\n <\/section>\n Seeking every possible advantage for clients is a no-brainer. As long as it\u2019s by moral (and legal) means, it\u2019s part of your fiduciary commitment.<\/p>\n We think combining a smaller client base with the advantages of an OCIO \u00a0<\/em>gives you the upper hand.<\/p>\n There may be mega-firms that regularly produce impressive results<\/a><\/strong> for some<\/em> of their clients. Nevertheless, odds are that they can\u2019t keep as many of their people as happy as you can yours.<\/p>\n Conversely, a modest-sized independent broker deal\u00a0<\/span> firm may be able to provide more personalized service. You can look your clients in the eye and greet them by name from memory.<\/p>\n As that kind of service becomes rarer, the level of value you\u2019re providing becomes even more of a hot commodity. There may be advisors at vast companies who do the same, but they\u2019re not the mega-industry norm.<\/p>\n More importantly, by adding an expert to your team, you can know that you\u2019re giving clients your absolute best. If you scale things down between a large firm and yours, your clients may fare better, case-by-case.<\/p>\n A world-class financial chef managing a small firm almost guarantees that everyone eats well. Don\u2019t think that means your CIO will be inaccessible, though.<\/p>\n\n
Could it mean closing on more prospects?<\/h3>\n <\/header>\n
Can an outsourced CIO boost client retention?<\/h3>\n <\/header>\n
Could it free you up, too?<\/h3>\n <\/header>\n
Did you know it could increase assets from clients and prospects?<\/h3>\n <\/header>\n
Could fee optimization be necessary?<\/h3>\n <\/header>\n
Are you ready to take on larger firms?<\/h3>\n <\/header>\n
Is there a hidden bonus? Would you like better client results?<\/h3>\n <\/header>\n