The benefits of outsourcing financial planning

Financial planning outsourcing is increasingly being used to gain a competitive advantage or uncover savings. By leveraging service delivery options and process improvements costs can be reduced.

This is happening not only with large global companies, who have hitherto been reluctant to take financial planning out of house, but also smaller advisers for whom financial planning has never been a core part of their business.

If, as an adviser, you are providing a comprehensive financial plan for clients you will need a permanent resource to provide this.

Conflict

The solution could be found with the purchase of new software for financial advisers such as that provided by intelliflo. However, outsourcing to a company already using such programmes could be cost-effective.

Although some financial operations such as strategic planning may be kept in-house, other aspects of financial planning, budgeting and report writing are candidates for outsourcing – https://www2.deloitte.com/content/dam/Deloitte/ie/Documents/Finance/CFO/financial_planning_analysis_next_frontier.pdf.

While there are risks to outsourcing, these are outweighed by the benefits, including cost-cutting. Planning is often a large cost centre because of the complex nature of the process, and depending on the company’s size, it may not be wise to spend money in-house if an outsourcing option is available.

Outsourcing can also avoid any conflict of interest when your firm creates plans and carries out the investments. By using a third party the firm can concentrate on analysing the client’s investment portfolio. Outsourcing can also avoid any conflict of interest when your firm creates plans and carries out the investments. By using a third party the firm can concentrate on analysing the client’s investment portfolio.

Customised

Furthermore, if your planning department does not look particularly strong or well-funded on paper, outsourcing to a major financial planning company can enhance the firm’s credibility.

Another benefit is that the process may uncover other non-direct cost savings. Companies often uncover broken systems which are ready for a design overhaul. Customised reporting will always add value, and by centralising the planning process you will be removing the danger of ad hoc reporting which can inhibit decision-making.

Some CFOs and smaller firm managers are nervous about outsourcing as their planning operations can be fragmented and stretched across departments. Third party planning partners understand the issue and are increasingly honing their transition processes to make the creation of off-site planning as smooth as possible. Third party planning partners understand the issue and are increasingly honing their transition processes to make the creation of off-site planning as smooth as possible.

Industry analysts believe that wealth management companies of all sizes can improve their outcomes through outsourcing, and that advisers who proactively outsource will remain ahead of the curve and become more efficient.

Author: Robin Gupta