Is outsourcing investment right for you? Take our quiz to find out…

Go to the profile of PortfolioMetrix
Mar 25, 2020
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The question of outsourcing the investment part of their role is something of a Marmite topic – advisers seem to either love it or hate it.

One of the main arguments by the ‘haters’ seems to be around the “added” cost and how this can be justified to clients. Those in the ‘love it’ camp say it frees them up to spend more time with their clients and can result in better investment outcomes.

According to a recent article in the American Financial Advisor magazine, advisers in the US who decided to outsource have a very high level of satisfaction with their decision. The article quotes recent studies by Northern Trust and AssetMark which have shown: 

  • 97% of advisers are satisfied with their decision to outsource.
  • 98% say they deliver better investment solutions after deciding to outsource.
  • 80% of advisers say they lost no clients or revenues when they made the transition to outsourcing.
  • 70% said they grew their client base and/or revenues as a result of outsourcing.
  • 86% said outsourcing made them more successful.
  • 87% said outsourcing met or exceeded their expectations
  • 92% of advisers say their clients reacted positively to the transition to outsourcing.

If you are undecided about whether you should outsource, try our quick quiz…it will take just a few minutes of your time.

Outsourcing Suitability Quiz

Choose either a), b), c) or d) for each question, tot up your score from the options below and then see what your score suggests you should do next.

1. How do you feel about the task of investment?
a) I love it - it’s the whole reason I became an adviser
b) It’s a part of my work that I really enjoy
c) It’s part of the work I do for my clients but not the main value add
d) I do it because I feel my clients expect it but I don’t like how much time it takes

2. How do you rate the investment decisions you make?
a) I think my portfolios perform well but I don’t spend much time comparing them with others
b) I measure the performance of the portfolios and they do very well against others
c) Overall, I have some concerns that perhaps I could do better for my clients
d) I find it challenging to manage portfolios when markets are particularly volatile.

3. How much control do you like to have?
a) I am a control freak when it comes to my clients’ investments – nobody does it better than me
b) I like to have some say about where my clients’ money is invested
c) I regularly review the portfolios I run for my clients to check they are performing the best they can
d) I review the portfolios as and when I think they need it / if I have time

4. What are your business goals?
a) I have high ambition for the business and expect it to grow significantly in the future
b) I am happy with the level of clients I have at the moment and expect that to stay fairly static
c) I am satisfied that the business will tick along nicely until I decide to sell it
d) I am planning to retire soon so my ambition to grow the business is low

Scoring
Question One: a) 1; b) 2; c) 3; d) 4.
Question Two: a) 2; b) 1; c) 4; d) 3
Question Three: a) 1; b) 3; c) 2 d) 4
Question Four: a) 4; b) 2; c) 3; d) 1

How did you score?

Up to 6 points

You obviously feel very comfortable managing your clients’ investments and may struggle to hand over responsibility to a third party.

Up to 10 points

While you feel you do a good job of managing your clients’ investments, you may benefit from exploring alternative options that would allow you to provide a high level of service whilst giving you the time needed to expand your business

Up to 13 points

It is very likely that you, your business and your clients could benefit from outsourcing the investment side of your business to a third party.

16 points: call us immediately!


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Go to the profile of PortfolioMetrix

PortfolioMetrix

PortfolioMetrix are a multi-award winning, innovative investment manager that provides independent financial advisers with an alternative way to access discretionary investment management for their clients. Our proposition comes at a competitive price and doesn’t compromise the adviser/client relationship. The London winner of the Citywire Wealth Manager Regional Stars award for two consecutive years, voted the WM Small Business of the year, in association with ARC 2018 and, in 2019, have received the accolade of PA Discretionary Manager of the Year. Our proposition offers the convenience of online model portfolios yet delivers customised portfolios, tailored to individual client requirements. Investment performance has demonstrated consistent and reliable risk and return separation of portfolios that doesn’t undermine the financial planning process. This is achieved through our academically-robust, risk-based investment approach. WealthExplorer™ is integral to the PortfolioMetrix customised service. A proprietary owned and designed software system, WealthExplorer™, is purpose built to equip advisers with a broad range of tools designed to deliver unique client insights that add value to the adviser/client relationship and ultimately delivers better client outcomes, when utilised by financial advisers.

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