{"id":503,"date":"2022-05-23T05:34:18","date_gmt":"2022-05-23T09:34:18","guid":{"rendered":"https:\/\/cornerstoneportfolioresearch.com\/?p=503"},"modified":"2023-03-31T16:11:13","modified_gmt":"2023-03-31T20:11:13","slug":"financial-advisors-increase-aum-when-they-work-with-an-ocio","status":"publish","type":"post","link":"https:\/\/cornerstoneportfolioresearch.com\/outsourcing\/financial-advisors-increase-aum-when-they-work-with-an-ocio\/","title":{"rendered":"Financial Advisors Increase AUM When They Work With An OCIO"},"content":{"rendered":"

How can you increase assets under management as a financial advisor? Does your firm have an effective marketing strategy for making that happen?<\/span><\/p>\n

The growth of many financial advisors is limited to market appreciation, reinvested income, and new money from current clients.\u00a0<\/span><\/p>\n

Perhaps they get a few referrals each year that convert into revenue-producing clients who offset some of the normal attrition experienced by most financial advisors.<\/span><\/p>\n

This may be a sub-optimal strategy if your goal is to add many new clients who rely on you for high-quality planning and investment services.<\/span><\/p>\n

How About Adding an OCIO (Outsourced Chief Investment Officer)?<\/b><\/h2>\n

Building a better mousetrap starts with building a team of experienced financial professionals. We know this is important because \u201cOur Team\u201d is one of the most-visited pages on financial advisors\u2019 websites.\u00a0<\/span><\/p>\n

It can be argued that founders and partners are the most important professionals who are profiled on the \u201cOur Team\u201d page. However, it can also be argued that the next most important professional is one responsible for making day-to-day investment decisions.<\/span><\/p>\n

Sure, you could outsource the investment work to a third party, but that can work to your disadvantage. Investors have to hire you <\/span>and<\/span><\/i> a third party. That is two decisions instead of one.<\/span><\/p>\n

You could designate one of your firm\u2019s principals to be the CIO assuming they have the time and skills. At the same time, this strategy also has its challenges.<\/span><\/p>\n

For example, you have to convince investors that this professional has the skills and time to wear multiple hats, all of which are important. Keep in mind that larger competitors may sell against that arrangement. This is part of their competitive advantage.<\/span><\/p>\n

Effective investment research, asset allocation, risk analysis, and portfolio management are critical functions that take substantial amounts of time and expertise.\u00a0<\/span><\/p>\n

Your investment results will drive your assets under management\u2014because performance impacts both your current client retention rates and the performance of your AUM.\u00a0<\/span><\/p>\n

An employee hire is another option. The problem with that is that the overhead of a high-quality CIO can be expensive. When you add up their salary, benefits, bonuses, and taxes, you may have to raise your fees simply to cover their expenses.<\/span><\/p>\n

We believe an alternative worth exploring is a high-quality <\/span>Outsourced Chief Investment Officer.<\/b> An OCIO can be an independent contractor that will work on a 1099 basis so there is none of the overhead associated with a CIO who is an employee.\u00a0<\/span><\/p>\n

Perhaps a better reason for outsourcing your CIO is that you do not have all of the time drag from recruiting and interviewing. You are spared the hiring risk of potentially being stuck with an employee who fits poorly, too.\u00a0<\/span><\/p>\n

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Want to know more about the OCIO difference?\u00a0<\/i><\/b><\/a><\/h2>\n

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Why Can the Right Outsourced CIO Mean More Assets and Revenue for Your Firm?<\/b><\/h2>\n

The right Outsourced CIO is a triple threat. They can:<\/span><\/p>\n