Is Outsourcing right for you?
As an independent advisor, the responsibilities of running a business, as well as the responsibilities of meeting your clients’ needs are now on your shoulders. If you don’t want to do it yourself or have the staff to perform these duties, outsourcing is an option.
ByAllAccounts partners with a number of well-established companies that provide outsourcing for portfolio data management, reporting, human resources, compliance, billing and investment strategy. Some provide multiple components, such as portfolio reporting and billing.
Things to consider when considering Outsourcing.
Portfolio data management and reporting is the one area where it makes the most sense to outsource, because it requires an understanding of investments, accounting, and a technical or computer systems background. It can be a challenge to find the right person to do these tasks in-house.
Although you must maintain and provide portfolio data, this is not a revenue generating area for your firm. Outsourcing leaves you and your staff time to concentrate on your clients and the true revenue generating areas. Since you need information at your fingertips when analyzing your client’s portfolios, having someone outside the office troubleshooting and creating your quarterly reports takes the pressure and stress out of the office.
When considering an outsourcing solution for your firm you want to assess the following capabilities for prospective vendors:
- Ability to download electronically from major custodians, including the specific custodians you plan to use.
- Ability to capture transactions off the web for assets not held at major custodians.
- Handling of all asset types: fixed income, equity, mutual funds and alternative investments.
- Support for entering assets manually if not available electronically.
- Whether the data will reside on an in-house server or on the web.
- Web access for your firm as well as through a client portal.
- Ability to produce reports that consolidate all the client’s investments.
- Target versus actual allocation reporting capability.
- Will you have a single point of contact or are you working with a team, and do they understand investments as well as the technology?
- Ability to retrieve data from the system in order to create custom reports.
- If you decide you no longer want to use the outsourcing solution, is the data easily retrievable and can you bring it in-house or convert it to another solution?
- Comprehensiveness of documentation and procedures.
- Extent of user training.
- Disaster recovery plan.
- Billing solution capabilities.
