A Professional Adviser article about outsourcing by Fiona Tait from Intelligent Pensions caught my eye recently. In it, Fiona looks at the pros and cons of outsourcing a wide range of services, including investment management, paraplanning and compliance.
She starts by making an excellent point about specialisation, saying that decisions that are made by a team of experts in their field are “likely to be more robust than those made by a few advisers in one firm, however good those advisers are.”
This is possibly one of the best reasons for choosing to outsource, putting clients’ interests first and foremost by ensuring their investments are being managed by people highly qualified to do so. And that’s before you get to the huge time savings it delivers for advisers.
Cost vs value
The article also covers the thorny topic of cost, with Fiona pointing out that the outsourced service must provide enough improvement to equate to value for clients and the firm.
So, does outsourcing to a discretionary investment manager represent good value for money? As Fiona says in her article, increasing numbers of adviser firms are turning to outsourced functions to free up their time. This would suggest that more advisers are realising that outsourcing investment management does indeed offer good value for money.
It’s especially true for firms whose main focus is financial planning, where managing investments in-house takes the focus off the planning process with clients. Outsourcing the investment management function means they can see more clients, which is good news for those looking to benefit from professional financial advice but even better for new advice firms looking to maximise their potential.
Do your homework
Of course, not all discretionary investment managers are equal, so it’s vital that financial advice firms do their homework before signing on the dotted line. Aspects such as quality of service offered and provided, intelligent technology, performance and, of course, cost is all part of the ‘value for money’ equation.
If you are an adviser looking to make a change, something that might help with the decision process is a whitepaper we wrote entitled ‘Riding the Winds of Change: centralised investment propositions and why your business needs one”. It’s available to download free here. Alternatively, please do get in touch with us direct at engagement@portfoliometrix.co.uk.
