As an advisor, your time is best spent on activities that grow your practice and use your core skills, like networking, meeting with clients and handling their financial planning.
However, running a practice also involves considerable back-office, non-client-facing work such as the onboarding of new accounts, tracking and handling compliance requirements, and managing scheduling and regular client communication. The typical advisor spends more than 10 hours a week on administrative and client servicing tasks, according to a study by Kitces Research.
As you expand, you’ll find more and more of your day getting sucked up by back-office work. Without a well-thought-out advisor back office solution, you could also run into problems, like mishandling paperwork, falling behind on client requests, an overwhelming amount of meetings and more. In other words, when you’re strained, the overall client experience suffers, too.
If you’re frustrated with back-office issues, there are a few ways you can delegate this work to create a better experience for your clients, your staff and yourself while freeing up your time to generate more revenue.
Solution 1: Hire More Operations Team Members
One advisor back-office solution is for your firm to hire more staff members dedicated to this operations work. This mainly includes admins but could also include professionals trained in compliance, marketing or human resources.
If you run everything in-house, you typically need a director of operations to oversee the department and lead the operations staff.
For most firms, I find a 1-to-1 ratio of back-office staff to advisors works best, though the number of staff members you need will depend on the complexity of your operations. A firm handling only straight investment management likely has less back-office work than one that also provides in-depth financial and retirement planning, services that need more client communication and account supervision.
The advantage of hiring your own staff is that it gives you more control over the client experience. You have the flexibility to design the processes you want. Operations staff are usually more affordable than hiring an associate advisor for this work, but there are exceptions. Your operations director will likely earn six figures, and you’ll need to pay a premium for operations team members with a lot of industry experience.
The downside of hiring more back-office staff is that you’re committing to a long-term salary expense for employees who are not directly bringing in more revenue (although adding staff can free advisors on your team to take on more clients). You also need to properly supervise the staff and make sure they’re trained in your systems so that you can delegate work to them effectively.
Hiring staff members as an advisor back-office solution makes sense if you’d like a long-term solution and you want to be more involved with supervising or planning the processes so they fit your unique culture.
Solution 2: Hire More Associate Advisors
You could also hire an associate advisor with the plan they will start by focusing on the operations side. The new advisor will then understand the complexity of your back-office operations and can use that knowledge to both train others and handle problems down the road. Since this new team member is also an advisor, they can assist with client-facing work at the same time, including bringing in new business.
A potential drawback of hiring an associate advisor is that their salary may be greater than an operations role, depending on the experience level and location of your business. This means that you might be paying more in salary for someone with less productivity and experience than if you hired an operations professional.
Using additional advisors to solve operations is a short-term back-office solution. Someone trained to be an advisor will not want to stay in an operations role for long, as they will outgrow the position. You may streamline operations for a year, but it will be hard to keep them from seeking full-time advisory roles.
Hiring an associate advisor could make sense if you have an operations director already, and they need short-term help at a time when you’re already looking to bring in another advisor. The advisor can assist temporarily with back-office solutions before moving into work that fits their financial training.
This strategy works especially well when you’re undergoing major process changes, like onboarding a new CRM or entering a relationship with a new agency
Solution 3: Find a Partner to Handle Back-Office Work for You
One way to create efficiency quickly is to bring on an external partner as an advisor back office solution.
Carson Group offers an entire ecosystem of support to help partner advisors free up their time to focus on what matters most to them. While partnership takes care of many of your back-office headaches, you also gain access to a full stack of advisor technology tools, plug directly into a lead-generating marketing machine and receive support for financial planning, investments and compliance.
Carson also provides a team of coaches, business consultants and industry professionals to support your firm and ensure your team understands all the processes and technology.
By outsourcing, you can run a leaner firm with fewer non-revenue-generating team members on payroll, which also makes it easy to scale. Also keep in mind that signing up with an external partner is a long-term solution. You’re likely not going to be able to customize your processes as much as you would if you built them in-house, but there are major advantages, too. First, your firm will be using proven processes that have helped hundreds of other firms. Additionally, your partner is likely able and willing to invest more in technology and create added efficiencies in an ever-changing environment.
Partnership is right for you if you want to move into more of a CEO-type role for your firm. You’d free up much of the back-office work, not wear nearly as many hats and focus on client relationships and leading your firm. At the very least, it’s worth a discussion to do your due diligence.
Solution 4: Find an Agency to Handle the Work
An agency gives you temporary help on a contractor basis. The contractors will work virtually to handle tasks like client email communication, paperwork and tech support. Agencies typically handle one area of specialty, whereas a partner like Carson provides the full ecosystem.
For example, you can tap a marketing agency to handle newsletters and website content, or you can hire an outsourced compliance agency to act as your chief compliance officer.
If you’re looking for less specialized roles, there are agencies such as Nifty Advisor Support, which specializes in providing short-term back-office solutions. Your broker-dealer may also run some sort of internal system offering temporary staff support with different back-office functions. You either need to pay for these services or you qualify for credits over time, depending on the rules of your organization.
There are dozens of quality “virtual assistant” companies out there that can help you with administrative tasks, like paperwork and scheduling. For agencies that specialize in working with advisors, their staff already has experience with the necessary technology, rules and paperwork. They can start helping you right away versus a brand-new employee who needs training. This strategy is also lower-cost and not an ongoing commitment. You just pay for what you need.
The downside is that this advisor back-office solution gives you the least flexibility. The agency will use its own system and maintains control over staffing. While some agencies have financial services experience, that’s not always guaranteed.
In addition, it’s possible that the people working on your account will keep changing. That can feel impersonal for clients, and you run the risk of there being a mismatch in culture or client experience level. If you hire an agency, you likely don’t want them communicating with clients unless you’re sure they’ll keep the same people on your account.
An agency could make sense if you’ve got a temporary issue, such as a member of your operations team went out on leave or you’re changing your CRM system and that change has created a surge of internal data entry work. An agency can get you through the issue until things return to normal.
An Investment in Client Retention
When your practice expands and gets more complex, the right technology and back-office solutions go a long way toward creating a better client experience. You want to make it easy for people to do business with you and not run into trouble spots. Seamlessly handling this work, especially at the start of a relationship, can have a lasting effect on retaining clients.
As you figure out your back-office solution, consider scheduling a free 20-minute call to see if Carson is right for your firm. If you feel like you’re having to handle three or four roles in your firm, we’ll talk you through how we help you focus on what’s most important to you – and we’ll handle the rest under your guidance.