The Power of Outsourcing
Outsourcing can mean different things to different people, both across industries and within them. In the latest episode of Kestra Out Loud, we spoke with Rico Casares, VP - Platinum Business Consultant at AssetMark, a turnkey asset management program (TAMP). Rico brings more than 20 years of experience in financial services and has spent the past decade working one-on-one with wealth management professionals across the country to help grow their businesses.
Below are several insightful points Rico shared regarding the benefits of outsourcing for financial professionals:
- The most common outsourced aspect of financial planning is investment management. When considering what responsibilities to outsource as a financial professional, investment management probably comes to mind. Other aspects might come up during the conversation, but generally the focus is on how portfolios are constructed, including custom and pre-built options, and how well they could be managed by a third party. Externalizing investment management may be a great solution to freeing up your time and energy, so you can focus more on developing client relationships.
- Outsourcing has become more appealing due to changing market dynamics. Back in the 1990s, the greatest differentiator for a wealth management professional was typically their ability to identify stocks that would perform well. The amount and type of accessible information, which could vary greatly across firms, often played a big part in this stock-picking. Moving into the 2000s, the differentiator became more about financial planning. Every financial professional essentially had access to the same information thanks to the internet, so who could provide a better plan? Today, the differentiator is all about client experience. If you outsource investment management so that someone else handles all of that research and due diligence, you can focus on what will create a “wow” experience for clients. Then your clients will hopefully talk about that exceptional experience with their friends and family, leading to more referrals.
- Client segmentation can play an integral role in an experience-based strategy. The experience economy is now everywhere, not just in financial services. Some wealth management professionals might struggle with the concept of segmenting their clients into A, B, and C tiers and considering the experience they provide to each tier. It’s important to do so though, because the reality is you can’t even get an oil change these days without being presented with good, better, and best options. As a wealth management professional, think deeply about the experience you want to provide to each client and then deliver it.
Rico also noted that Asset Mark commissioned a survey of wealth management professionals last year by Qa Research, which resulted in an interesting white paper. Among the notable findings was that 86% of respondents felt outsourcing had made them more successful.
Interested in learning more about outsourcing? Tune in to our full conversation with Rico here.