Outsourcing or Not: How You Spend Your Time

Sep 20, 2016


My wife and I are into self-help books (please don’t judge us). Our Kindles include a library of books. Most of them have a big idea or two, and then a lot of examples – the kind of books you can skim and get 80% of the value.

One author who has made an impact on our daily routines is Stephen Covey, who espouses spending your time knowingly and effectively. One example he uses is filling a glass jar with a mixture of rocks, pebbles and sand. The lesson is that you must fill the jar in a specific order (hint: big rocks first) to make everything fit.

Take this same concept and apply it to your business – how do you spend your time to make your firm successful and you happy (two of your bigger rocks)? If you are in a young firm, your time management is essential to your success. You must build that book of business. You must find clients. If you don’t, the business will not last. The stakes are high.

We recently researched advisors’ use of time and what makes firms successful. This information, which included a survey of more than 500 advisors, is featured in our upcoming paper and its companion research report. You can get a preview of it in our September 26 webinar.

Interestingly, the concept of where you should spend time quickly led to where you shouldn’t and what you could outsource. For the purposes of this post, outsourcing means employing somebody outside your firm to perform a function or task.

Philosophy of outsourcing

Outsourcing is a loaded word. It has a political connotation, and there is a feeling that if you worked harder, you would be able to do everything, and that would be better. We wanted to understand if advisors had a philosophy about outsourcing.

We asked advisors – Do you believe in the concept of outsourcing?


In reality, I’m not sure advisors have a choice – you should be outsourcing. I say that because there is no way that a firm can handle everything internally and truly keep focused on its key value proposition.

Pros and cons

The major pro/con outsourcing themes we saw in our survey responses were interesting:


This table really illustrates advisors’ hopes and fears about outsourcing. But you could use this tactically – when you have a new initiative, use it as a checklist to determine whether you should outsource a function or not.

Objections vs reality

Outsourcing can be a key tool for advisors to ensure they spend their time wisely and profitably. It is not the right answer to all questions, but it should always be considered. Let’s look at a few objections to outsourcing, along with the reality:

Objection: Outsourcing is too expensive.

Reality: Our industry has become effectively specialized, and incentives exist for third parties to deliver a broad and growing range of quality services – often more cost effectively than performing them in-house. If you factor in the real and opportunity costs of doing everything in-house, you may be surprised how financially attractive outsourcing can be.

Objection: It’s not like it’s a silver bullet for all of our technology challenges.

Reality: It may not solve everything, but the odds are high that with the right partner and a flexible contract, your firm may be able to maintain a leading IT edge, as innovations increase and your business evolves.

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Objection: Outsourcing won’t save me money.

Reality: While it’s true that you won’t always save money, what you gain in productivity and new-found time on your calendar to devote to clients and business-building efforts may enable you to boost revenues and profits.

Objection: If I outsource, then I’m a middleman – and I won’t be able to justify my fees.

Reality: If you don’t believe that the most important service you deliver to clients is the ability to coach them through their financial lives, then maybe you’re missing the point. No third party or asset manager could ever know your clients better than you. Talk to your clients; you may be surprised to hear that they want to interact with you, and how the rest of it is done is less important to them.

Objection: Third parties could never provide the level of service I currently deliver to my clients.

Reality: That’s only true if you let it happen. Your management skills come into play here – it’s important to select the right functions to outsource, choose the right third party, and manage the relationship to ensure your complete satisfaction.

Enjoy what you are doing

So far, we have only focused on where you should/shouldn’t spend time. This is key. But the second half of the equation is important, too – where do you want to spend time? Otherwise work becomes, well, work, and nobody wants to feel they are leaving for the salt mines every morning.

Most advisors are good salespeople – you’ve had to be, to build your book of business. This means that you like interacting with people, and will prioritize it. This is good, common wisdom, as the time spent with clients is nearly always the best use of your time. (And I know this is a broad generalization, but having talked to many advisors, there are a lot of you who are type A extroverts!)

You will be seeing more blog posts, social media and presentations focused on ways to grow your business. If this has intrigued you, I hope you register for the webinar.

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Raef Lee

Raef Lee

Raef Lee is the technology contributor for Practically Speaking and also serves as a managing director for the SEI Advisor Network.

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