Are You Staying Ahead Of The Curve?

Like so many of us, I joined the financial planning industry to make a positive impact on people’s lives. I have always found it rewarding to help clients fulfil their lifelong dreams, guide them in periods of transition and provide support during challenging times. However, as firms grow, advisors are often forced to focus on time-consuming back-office tasks rather than cultivating relationships with high-quality clients. On top of that, more and more clients are looking for simplicity and advice. The result is a significant gap between the current services offered and what clients are seeking and advisors having to justify their fees to retain clients.

Does this sound familiar? You’re not alone. The financial technology firm Envestnet recently asked 305 advisors – many which were fee-only RIAs – the top five pain points they are facing today. Answers included:

  • Technology adoption and integration
  • Staffing advisors and support staff
  • Organic growth
  • Time, capacity and efficiency constraints
  • The time and money spent on compliance and regulations

The survey went on to ask what advisors anticipate being the biggest changes over the next five years. Unsurprisingly, the top three were:

  • Fees and margin compression
  • Enhanced technology and digital presence
  • Holistic advice planning

These challenges and changes require an advisor to become a small business owner, technology expert, compliance specialist, human resources authority and employee development professional. How do you wear all these hats while creating personalized investment strategies for your clients? In order to stay ahead of the curve and be well-positioned to excel in the future, advisors have two options:

  • hire or forge partnerships in tax and estate planning to build this expertise in-house; or
  • partner with a TAMP that can provide economies of scale, increased efficiency and a wealth of resources.

To compete advisors are turning toward outsourcing. While this isn’t the right approach for every business, it often provides firms with the resources to allow them to spend more of their time with clients and less time focusing on staff management. The decision to outsource shouldn’t be taken lightly; all stakeholders need to be vetted. When the group which stands to be impacted by a “buy” decision is given the responsibility to make the case between building in-house or buying externally, the temptation to marginalize the costs of the in-house alternative can be compellingly attractive. This often leads to the wrong decision, and ultimately disadvantages the competitive position of the company.

If outsourcing is the best course of action for your firm, it’s imperative to partner with a provider that offers a comprehensive wealth solution beyond just back-office support.

In addition to the usual support you would expect from a TAMP, their menu of services must include:

  • An advanced planning team that can help you provide holistic advice
  • A modern technology stack and vetting of top industry resources
  • Investment models that allow for flexibility based on client and advisor needs

I know, it is hard to “let go” of running some parts of your firm, but in an increasingly complex industry driven by clients who are looking for more, this will be a necessity.

Buckingham Strategic Partners is dedicated to providing our advisors with personalized, asset management solutions for high-quality and complex clients.  Find out how Buckingham can help you stay ahead of the curve by scheduling an appointment with a regional director or our advance planning team.

About the author: As a Buckingham Strategic Partner Divisional Manager, Michael Ozburn, CFP® is committed to helping competent, trusting and knowledgeable Wealth Management Firms deliver an exceptional client experience. He leverages his skilled team members to provide each firm with a dedicated partnership of support, education, coaching and guidance on the core areas of a firm’s business.

Important Disclosure: The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Wealth®. This article is for general information and educational purposes only and is not intended to serve as specific financial, accounting, legal, or tax advice. Individuals should speak with qualified professionals based upon their individual circumstances. The analysis contained in this article may be based upon third-party information and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, confirmed the accuracy, or determined the adequacy of this article. R-22-3949

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