Partnering With an Insourced CIO Can Serve as a Launchpad for Growth

Chris ShubaAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

The global outsourced CIO (OCIO) industry has grown significantly over the past five years, with assets under administration (AUA) rising from $1.29 trillion in 2016 to $2.46 trillion in 2021. Analysts predict that by 2026, the industry will reach an impressive $4.15 trillion in AUA, highlighting the growing demand for these services by financial advisory practices.

What accounts for this acceleration?

Advisors are increasingly turning to OCIOs to differentiate their firms, increase profitability and scale their businesses through gained efficiencies. Outsourcing time-consuming front and back-office activities lets advisors focus on their core competencies and provide a higher level of service to their clients. Solving for many of the challenges they face day-to-day empowers advisors to spend more time doing what they love, providing counsel to their clients.

Compared to OCIOs, an insourced CIO (ICIO) works more closely with practices. An ICIO offers bespoke investment models and quantitative strategies that can be white-labeled and offered to clients as an “in-house” solution. This level of customization allows practices to differentiate themselves and create a unique value proposition.