Outsourced ETF Investment Strategies


The Evolving World Of Today’s Financial Advisors

Today’s successful financial advisors are overwhelmingly shifting to a client-centric model versus the traditional investment-centric approach commonly seen in recent decades. A related trend among advisors is the outsourcing of investment management. Outsourcing provides a scalable growth strategy and enables advisors to focus on true business drivers such as new client acquisition and existing client service, while delegating research and investment management to dedicated portfolio managers.

Where Do High AUM Advisors Spend Their Time?

A benchmark study conducted by Cerulli Associates highlighted that advisors at RIA firms with less than $100m in AUM spend 20.3% of their time on investment management activities, and only 48.4% of their time on client facing activities. This was a stark contrast to larger RIAs with over $1.0bn in AUM who spend 92.5% of their time on client facing activities and a mere 3.8% of time focused on investment management.

The Focus Has Shifted

CEG Worldwide, a global research and consulting firm for advisors, identified a dramatic shift between 2001 and 2012 in advisors’ emphasis on client relationships versus investment management. The study concluded that when “advisors foster deeper client relationships, they gain a deeper understanding of their clients’ financial concerns and are thus able to effectively address these concerns. This makes it easier for advisors to ask for, and get, additional assets and introductions to prospects.”

Advisor Benefits From Outsourcing To ETF Investment Strategists

  • Portfolio research, construction and monitoring are time consuming activities that can take 40% of an advisor’s time or the equivalent of two workdays a week. As the firm grows so will the time spent able to better serve existing clients.
  • More time for business development
  • Provides investors access to experts in research, portfolio construction, asset management, tax and other disciplines
  • Creates a scalable advisory practice supporting long term growth
  • By outsourcing investment management, advisors can free up 1-2 days a week to meet with existing and new clients

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