The Challenge: We have been focusing on communications over the past several weeks, noting how client retention — especially retaining your most affluent, profitable clients — hinges on successful communications. While advisers acknowledge the importance of creating and executing a communications program, surveys find that advisers spend less time meeting or talking with clients than they do addressing operational issues. So how do you shift the focus of your team to be more client-centric, while still taking care of day-to-day business?
The Solution: One way successful advisory teams are realigning their resources and time is to outsource key areas of their business. Many advisers already outsource their investment decision-making, for example, by using
separately managed accounts, mutual funds or other kinds of managed money solutions.
Why not go further and consider outsourcing operations and marketing?
Here’s how to start thinking about that. Identify where you spend your time most days, the activities that take you away from client communications and the administrative chores that you find onerous. If these could be handled by others and you could have 30% more time each week to spend with clients, how would your business be changed?
Many firms — large and small — have decided to hire an operations specialist to maximize the functioning of their practice. The results have been changes and improvements in technology, processing and systems that they never would have identified on their own.
Outside experts provide an objective perspective on how an advisory business should be run. They also free overburdened advisers from operational activities that rarely make good use of an adviser's talents or play to their strengths.
An outside expert functioning as a chief operations officer can offer handle administrative activities at a fraction of the cost of hiring such a person full-time, said Gary Davis, president of Beneficial Concepts Group in Stockton, N.J., which provides administrative and operations assistance to financial advisers.
Similarly, most of an advisory firm’s marketing functions can be outsourced. Our suggestions for creating and executing a communications plan, for example can done just as easily (and probably more efficiently) by a professional marketer working as a contractor.
Outside marketing experts can also be retained on a monthly, daily or weekly basis. While hiring a marketer may seem like an expensive undertaking, consider the cost of losing 30% of your top clients because you never get around to communicating with them, holding reviews and or putting on an appreciation/marketing event. That kind of puts it into perspective.
Next week: Communications success stories.
