Part 23
Outsourcing
The one thing all advisers tell us they need more of – aside, of course, from better-quality clients – is time and there is no doubt time pressures are increasing on advisers, particularly where the advisers are also the business owners.
At a recent conference I saw the results of some research that suggested, on average, advisers only spend some 37% of their time with their clients. A broad generalisation maybe, but pretty typical I would suggest – and an average that is probably distorted by advisers who do not carry the additional responsibilities that ownership brings.
Maybe there are tasks you could delegate to other people in the business – but what if they lack the capacity or capability to get the job done to the required standards? That is where outsourcing can be the answer and, for a financial planning business, there is a range of services that could potentially be outsourced:
* Regulatory compliance
* Investment research and management
* Human resources and performance management
* Business management
* Accounting
* Legal services
* Paraplanning services
* Administration
* IT
* Marketing
* PR
* Reception services
What are the advantages?
Outsourcing has many advantages as it allows the business to focus on its core processes and strengths yet access the other services it needs in a carefully controlled way. Done well it will:
* Reduce fixed costs (which may well help your capital adequacy situation)
* Allow you and the business to focus on client contact
* Streamline business operations
* Provide access to professional skills the business does not have
* Improve quality and reliability
* Free up resources for more important work
* Free up cashflow
* Provide more flexibility
Keys to success
For outsourcing to work well, you will need to take the time and effort to find the right supplier and build a working relationship.
* Define your core strengths: Which parts of your proposition can only you and your team reliably provide? There may well be parts of the financial planning process you do not need to be personally involved in delivering. Rigorously challenge your own beliefs about what you – and only you – really must do within the business.
* Don’t rush: The advantages of outsourcing will obviously depend on what service or process you are trying to outsource, the type of business you run and the quality of the supplier you partner with. It is therefore worth taking some time to do your homework and trial the services you are using to ensure they are what you are looking for. Careful due diligence is critical.
* Work hard to succeed: Do not expect to be able to abdicate all responsibility for success to the supplier you choose. Consider this a partnership rather than an outsourcing contract, where both parties must contribute 50/50 to its success. If something goes wrong in the relationship, get in touch and feed back straight away. Better still, get your supplier to visit your premises to understand the problem more deeply if you believe that will help. A good outsourcing service provider will be prepared to visit your office to find out about you, your business, the type of clients you work with and your strategic and operational goals to help them to judge their ability to provide the support and service you need.
* Communicate regularly: Ensure you set up a regular two-way feedback loop to facilitate the discussion of operational issues and ensure you are receiving the level of quality and service you need.