Engineering Advisor Success

Managing, And Influencing, The Client Experience

Can letting go of key functions lead to increased client satisfaction and firm growth?

Many firms now do precisely that, with emphasis on IT, Investment Management & Legal

February 26, 2019 — BOSTON–(BUSINESS WIRE)–Nearly half (43 percent) of advisors say their firms currently leverage external consultants, third-party providers or individual specialists for select business functions, according to a new study1 by Fidelity Clearing & Custody Solutions®, the division of Fidelity Investments® that provides clearing and custody to registered investment advisors (RIAs), broker-dealer firms, family offices, retirement record-keepers and banks.

The No. 1 reason advisors and firms chose to outsource investment management specifically was to create more value for clients (49 percent). Advisors feel that successful outsourcing of functions like investment management, legal and compliance, and marketing/communications allowed them to focus on deepening client relationships. Outsourcing of investment management also allowed for a “seamless” experience for clients.

The research uncovered that outsourcing appears to be good for business, too. Advisors that outsourced two or three of the top three outsourced functions reported experiencing higher growth in the number of clients in the past year (81 percent vs. 71 percent) and also reported experiencing growth in AUM in the past year more often (95 percent vs. 89 percent). At the advisor and individual team level, outsourcing allowed advisors to manage more assets ($145M vs. $110M) and resulted in greater compensation ($365K vs. $335K). In fact, 43 percent agreed that outsourcing is essential to achieving scale in growing a firm or practice2.

Who are the most successful advisors?

“We believe the future’s most successful financial advisors won’t allocate their time and energy the same way they do today,” said Todd Roadman, senior vice president for Fidelity Clearing & Custody Solutions. “We’re asking wealth management firms to take a hard look at their firm’s functions and ask themselves, ‘Is this driving value?’ Advisors shouldn’t be afraid to consider letting go of the areas outside their core competencies.

“Outsourcing helps free up time and mindshare. Advisors are able to focus on building deeper relationships with their clients by focusing on what matters most to investors which, increasingly, is planning-centric and goals-based financial advice,” continued Roadman.

The top functions that firms outsource are IT/technology (48 percent), investment management and portfolio construction (40 percent), and legal and compliance (37 percent). The top three reasons identified for hiring specialists were optimizing overall firm efficiency and productivity (70 percent), filling a gap in internal expertise in the outsourced area (62 percent), and saving time (60 percent). Advisors also indicated it allowed more time to dedicate to client service (53 percent) and enabled firms to create more value for their clients (49 percent).

We believe the future’s most successful financial advisors won’t allocate their time and energy the same way they do today...

Of the firms and advisors who hired specialists, 84 percent indicated they had a successful experience. In our study, the top reasons behind the success were:

  • Helped save time – 77 percent
  • Vendor had qualified expertise – 70 percent
  • Helped increasing productivity – 66 percent
  • Helped optimize efficiency – 57 percent
  • Allowed firm to focus on deepening client relationships – 53 percent

For more on outsourcing and how it can impact firm performance, visit





1 The 2018 Fidelity Financial Advisor Community: Outsourcing Trends study was fielded from May 18th through 31st, 2018. Participants included 383 advisors who manage client assets either individually or as a team, and work primarily with individual investors. These advisors are from a mix of banks, independent broker-dealers, insurance companies, regional broker-dealers, RIAs, and national brokerage firms (commonly referred to as wirehouses), with findings weighted to reflect industry composition. Fidelity is not identified as the sponsor of the study and all research is conducted by an independent firm not affiliated with Fidelity Investments.
2 The business needs and results of these participants may not reflect the experience of other Fidelity Clearing & Custody Solutions clients.
About Fidelity Investments
Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $7.1 trillion, including managed assets of $2.6 trillion as of January 31, 2019, we focus on meeting the unique needs of a diverse set of customers: helping more than 30 million people invest their own life savings, 22,000 businesses manage employee benefit programs, as well as providing more than 13,500 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for more than 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit
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