Who Belongs on Your Advisory Firm’s Dream Team?

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You’ve shared with your clients many times the importance of addressing all aspects of their wealth. You also advise your clients that they need more than just a financial advisor on their team. Comprehensive planning requires a team of professionals who are willing and able to work cohesively to ensure the client’s full financial wellbeing is cared for. From a CPA to an estate planning attorney, insurance agents, and more, you may be well-versed in coordinating professionals on behalf of your clients – because you know this is the way.

But are you taking the same approach with your own firm? Planning-focused advisors should consider the benefits of leveraging external team members who can provide specialized expertise and skilled services. When done effectively, your outsourced team of professionals can help improve efficiencies, increase productivity, and scale profitably – all while giving you the freedom to focus on what you’re most passionate about.

So who should comprise your firm’s external “dream team?” Let’s take a look.

Business Coach or Strategic Planner

When you’re deep in the business day in and day out, it’s nearly impossible to see your own blind spots. A business coach or planner can help you identify crucial gaps that interfere with your scalability. They can help you evaluate the effectiveness of everything from your current staffing to daily work flows, compliance programs, tech stack, operational costs, and more.

A coach is someone who can also keep you accountable to sticking to your goals while providing a second opinion and ongoing guidance. Like a Sherpa guiding you up Everest, a business coach has been along this exact path before with many advisors before you – they’ve seen what can go wrong and have the foresight to pivot and adapt at just the right moment. A seasoned coach knows what works and what’s required to summit the mountain, taking the guesswork out of achieving success. Whatever goals you’re looking to reach, they’ve been there before and they can help.

Marketing Professional

Depending on the size of your firm, you may find it worth hiring a marketing professional to have in-house. If you’re curious to know more about the current state of marketing for financial advisors, check out the 2024 Marketing Study by Michael Kitces and his team. But if that’s not in the cards quite yet, there are plenty of marketing agencies working in the financial services space you can reach out to for ongoing support.

Advisors sometimes assume that marketing can fall on the back burner when times are good, and only needs to be dusted off when they’re struggling to hit their new client acquisition goals. With marketing, consistency is key – which can be challenging (even frustrating) for advisors who experience alternating periods of high and low demand or acquisition (sometimes this is referred to as “feast or famine”). It doesn’t work overnight—rather, it’s a long, steady process designed to build trust and grow your circle of influence over time. Marketing should be an ongoing process in periods of abundance or otherwise. Your firm or marketing professional needs to be regularly monitoring, readjusting, and measuring for effectiveness.

Client acquisition takes time, and marketing doesn’t yield results overnight. If you’re not focused on incorporating some marketing measures into your operations, who’s going to stay committed to building brand awareness, increasing referrals, and generating new leads? Who will be tasked with ensuring your brand message stays clear and consistent or manage the marketing budget?

If marketing isn’t something that interests you, or you’re not confident in your abilities just yet, an outsourced marketing agency or professional can take the lead.

Fractional – or Outsourced – CIO

Do you struggle with balancing your time between fully servicing your clients while working toward your firm’s growth goals? Are you finding you don’t have the time or resources to dig into deep investment analysis and research as much as you’d like? Do you want an independent view of your investment approach but aren’t sure where to turn? Are you feeling overwhelmed by your due diligence responsibilities?

Investment management is often a thorn in planning-focused advisors’ sides. Not only does it take time, it’s hard to keep up with the latest news impacting client portfolios and outsourced compliance. This is not even to mention the fiduciary responsibilities and all the paperwork involved with that.

An outsourced chief investment officer (OCIO) can take on the heavy lifting of investment research, selection, and management, so you can stay focused on holistic planning. An OCIO offers solutions including strategic asset allocation, portfolio construction, risk management, and research. Further, depending on what you’re looking for, they can provide direct, client-facing guidance. Some providers may even go as far as to write an investment philosophy manual for your firm to share and educate your staff or provide content libraries you can pull from to educate your clients.

Oftentimes, OCIOs offer more flexibility than your typical in-house or turnkey asset management program (TAMP) options and can be significantly less expensive, making them an attractive addition to consider including on your external “dream team.” Just looking at the data from the Charles Schwab’s 2024 RIA Benchmarking Study: “Compensation: A key to attracting and retaining talent,” we can see that In-House CIO/Director of Research could charge as much as $350,000 annually (not including performance bonuses, expenses tied to the employee, etc.). And what if they aren’t a good fit for the firm? It’s much more difficult to cut ties with an in-house CIO than an outsourced or fractional CIO solution.

Recruiter

So you’re looking to expand the firm; that’s great. Whether you’re welcoming a new support staff member or senior-level advisor, prepare to invest more time and energy into the process than expected. From creating the job description to reading through résumés, scheduling interviews, meeting with top candidates multiple times, and negotiating offers, hiring can be a time-intensive, months-long task that pulls focus from other things.

If you are thinking about hiring internally at your firm, consider leaving the process up to the pros. Recruiters have experience weeding through applications, identifying what may make a candidate a good (or bad) fit, and providing an objective, experienced perspective.

Most of all, they can save you time and hassle, while helping you avoid potential hiring biases.

Which Should You Focus on First?

You will struggle to achieve your growth goals if you neglect to leverage the expertise and resources of third-party professionals or services, like those listed above. To determine what sort of outsourcing may be best-suited for your firm right now, we encourage you to try a short exercise.

Create a chart with four quadrants, two on top and two on the bottom. Label the two on top as “Love it/Great at it” and “Like it/Good at it.” On the bottom two quadrants, write “Don’t Like it/Good at it” and “Don’t Like it/Not Good at it.”

Now, try and list everything you do (or should be doing) in a week – all tasks, responsibilities, recurring meetings, etc. Put each task in its corresponding quadrant on the chart. Look at the bottom half of the chart and consider what you could delegate to other professionals (including those mentioned above). These are the tasks that need to get done but that drain your time and energy unnecessarily.

While it can be intimidating for advisors to hand off responsibilities to outsourced professionals, the key is to do your research and vet all potential partners thoroughly. Ultimately, they should be able to support your firm’s growth goals while helping you provide an outstanding client experience.

Eric Stein is Partner at East Bay Investment Solutions.

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