Could outsourcing plans be your secret to success?
As an advisor in today’s fast-paced industry, it’s all too easy to get caught up in the chaos and lose sight of what truly moves the needle in your business.
From delivering high-quality financial plans to managing client relationships and staying on top of market trends, the role of a financial advisor can be complex, demanding and ever changing.
But amidst the noise and distractions, it’s essential to pause and reflect on what your firm needs to prioritize in order to grow.
“The key is not to prioritize what’s on your schedule, but to schedule your priorities.
– Stephen Covey, The 7 Habits of Highly Effective People
That’s where the question of outsourcing financial planning comes into play. In this blog post, we’ll dive deep into the advantages and drawbacks of outsourcing financial planning services, with real-life examples to illustrate both sides of the argument.
The Pros of Outsourcing Financial Planning:
1. Access to Expertise:
Imagine you’re an advisor who specializes in retirement planning, but your client needs comprehensive tax planning. By outsourcing the tax planning component to a specialized firm, you can ensure your client receives expert advice without stretching yourself too thin.
Real-Life Example: An advisor partners with a tax planning firm to offer in-depth tax services to clients, enhancing their overall financial well-being.
2. Enhanced Efficiency:
Think about the time it takes to gather and analyze complex financial data for a client’s plan. On average this takes advisors 15 hours, but this can take DAYS. By outsourcing data analysis and report generation to a dedicated team, you free up your time to focus on nurturing client relationships.
Real-Life Example: An advisor employs a data analytics company to process and crunch numbers, allowing them to spend more time meeting clients and addressing their financial concerns.
“Don’t let the things that matter least, get in the way of the things that matter most.”
“Don’t let the things that matter least, get in the way of the things that matter most.”
3. Cost Savings:
Consider the costs associated with hiring full-time, in-house staff to handle all aspects of financial planning. Outsourcing can often be a cost-effective alternative, reducing overhead expenses.
Real-Life Example: A small advisory firm decides to outsource paraplanning services, significantly lowering their operational costs while maintaining quality financial planning services.
4. Scalability:
Picture a scenario where your client base is rapidly expanding. Outsourced services can adapt to your growing practice, ensuring that you can meet your clients’ evolving needs without overextending your resources.
Real-Life Example: An advisor partners with an outsourced planning team that scales up or down based on the number of clients, ensuring smooth operations during periods of growth or stability.
5. Improved Client Experience:
Your clients deserve the best. By outsourcing components of financial planning to specialized firms, you can provide comprehensive, customized financial plans that enhance the overall client experience.
Real-Life Example: An advisor collaborates with estate planning experts to offer clients comprehensive estate planning solutions, resulting in highly satisfied clients who value the holistic service.
The Cons of Outsourcing Financial Planning:
1. Limited Direct Control:
While outsourcing offers many benefits, it does mean giving up some level of direct control over certain aspects of your practice. You’ll need to trust in your outsourced partner’s processes.
Real-Life Example: An advisor outsources investment management to a dedicated firm but must rely on the firm’s strategies, potentially relinquishing some control over investment decisions.
Note: At PlanScout, we work with YOU to review the plan, and ensure it aligns with you and your client’s priorities. We also offer a complimentary adjustment & final review based on your feedback.
2. Client Transition & Integration Hurdles:
The introduction of a third-party outsourced partner can change the dynamics of client relationships. It may take some time for your clients to adjust to working with a different entity.
Real-Life Example: A financial planner brings in an outsourced team to handle portfolio management and struggles to integrate reporting format into their existing systems. Clients initially express concerns but eventually appreciate the team’s specialized expertise.
Note: That’s why PlanScout acts as a PARTNER, not simply a removed third party outsourcing solution. We recognize the importance of custom tailoring your plans and ensuring that your clients have peace of mind that they are working with you.
3. Communication Challenges:
Coordinating with an outsourced partner can sometimes lead to communication challenges, which need to be managed effectively for a smooth experience.
Real-Life Example: An advisor experiences delays in communication with an outsourced team, resulting in some operational hiccups. However, they implement robust communication protocols to address the issue.
Note: That’s why we’ve designed the PlanScout workflow to return plans within a 3 day window, and keep constant communication so you can keep your promise and deliver your plans promptly – even faster – than with your inhouse capacity.
In conclusion, if you’re considering outsourcing your firm’s financial plans – here are some important next steps:
- Do your research: carefully weigh the pros and cons to see both sides
- Define your goals: consider your practice’s short and long term objectives and how outsourcing can impact your KPI’s (Tip: get specific. What milestones are on your 1 and 5 year roadmap?)
- Outline your needs: What outsourcing needs must be met in order to reach your goals in the next 1-5 years?
- Crunch the numbers: what is the cost associated with each plan you create in-house? Consider your firm’s average output and overhead, and compare that cost with the cost or outsourcing.
- Shortlist service providers: find an outsourcing partner that you trust to meet your needs (Tip: many service providers will make lofty promises with little to back them up. Make sure to ask for testimonials!)
- Experiment: Found a promising partner? Schedule a demo call or test a free plan to experience their services first-hand. (pro tip: some service providers offer a free plan and satisfaction guarantee, so you have nothing to lose!)
In conclusion, it is essential to do your research, align on goals, and experiment first. From there, you can make an informed choice to ultimately benefit not only your business’s success, but that of your clients as well.
If you’re here… you may already be asking yourself the right question
Outsourcing may not be for everyone. But if you’re serious and ambitious about growing your practice – it may be for you.
We have worked with hundreds of advisors and seen first-hand how beneficial it can be to scale their reach. And don’t take it from us – take it from them.
(In some cases, outsourcing plans can double an advisor’s capacity + and help them reach their yearly objectives in a matter of months.)
Chat with an expert
If you’re curious about how outsourcing plans may impact your business, don’t hesitate to schedule a free call to speak with one of our experts.
We can help you crunch the numbers to help you understand the costs associated with your in-house plan creation considering your firm’s unique size, capacity, overhead, and yearly output, to see if it makes sense to YOUR firm.
Whether you choose to outsource or handle financial planning tasks in-house, we’re here to help. At PlanScout, our mission is to provide advisors with the tools they need to grow their impact.
Consider outsourcing your first plan, risk free.
We know outsourcing plans can be a game-changer, which is why we offer our partners their first plan, free. Try it for yourself.
No matter where you land on the decision to outsource, one thing is for sure:
Our goal is simple: help you grow your business so you can help more clients improve their financial reality and quality of life.
At PlanScout, we are not here to gate keep. Whether you decide to partner with us or not, our mission is to provide financial advisors with the tools essential to grow their practice.
Follow us for more free guides and resources – here’s to successful planning! 📈🌟
Raygar Khailany
CEO and Co-Founder
PlanScout
PlanScout: Your Partner for Personalized Financial Planning with a Friendly Touch!
We provide outsourced financial planning services for licensed financial advisors, enabling them to accelerate their growth by delivering visually engaging and comprehensive financial plans within just 3 business days.
