Why More Independent Financial Advisors Are Considering Outsourcing

According to Fidelity research, 96% of advisors who made the move to an independent firm are happy with their decision. And Cerulli Associates indicates that by 2025, more than a quarter of the industry’s assets will be managed by advisors in RIA channels. 

The top reasons behind making a move to independence underscore the ongoing exodus from wirehouses and broker-dealers, as well as the subsequent advisor satisfaction. Advisors report their top five influencing factors for transitioning their firms include more freedom and control, higher levels of client services, access to better tools and resources, greater opportunities to maximize revenue, and more room for growth. 

But in spite of the benefits, transitioning to independence isn’t without its challenges, including uncertainty about the time and expertise required to manage administrative tasks and responsibilities previously handled by their wirehouse or brokerage firm. 

Without those resources to support their back-office, investment management, compliance, marketing and administrative needs, independent advisors also navigating their new role as business owner may find themselves overwhelmed with operational burdens. As a result, they feel unable to provide the same level of service to their clients as they did previously and have much less focus on business growth, which is especially critical in a firm’s early stages.

In fact, according to a Financial Planning Association report, 33% of advisors indicated that administrative burdens were the greatest obstacle to increased productivity, resulting in less time spent on revenue-generating and/or client-facing activities. 

The Case for Outsourcing

Especially in the early stages of a new business, advisors may not have the capacity nor the capital to recruit and hire administrative help in house. But that doesn’t mean they have to face the staggering mountain of tasks to be done alone. Outsourcing can provide significant relief for the operational burdens they’re facing without the upfront and ongoing investments full-time employees require. 

A Fidelity outsourcing study found that 43% of financial advisors currently leverage external providers for operational and administrative functions. 

Of those that do, 77% reported that outsourcing saved time, while 66% indicated that outsourcing increased productivity, and 57% believe outsourcing optimizes efficiencies within their practices. 

4 Reasons Transitioning Advisors Are Turning to Outsourcing

  1. Access to specialized expertise: When it comes to critical advisory business functions like compliance and investment management, some advisors simply may not have the knowledge or experience necessary to manage them effectively. Outsourcing these applications to an expert third party ensures their firms can continue running smoothly without disruption, especially from regulators as compliance legislation changes. 
  2. Scalability: Growth is the goal of any advisory firm, but with growth comes additional challenges. As advisors add to their client roster, the volume of back-office and operational tasks increases, making managing them exponentially more challenging. Having an outsourced solution enables advisors to scale with the business, enabling advisors to grow without limitations.
  3. Enhanced confidence: Transitioning to independence isn’t for the faint of heart. Advisors take the leap with some level of trepidation, knowing they’re leaving the comfort of the proverbial support blanket they’ve enjoyed at their wirehouse or brokerage firm. An outsourcing partner can alleviate a number of those initial concerns and uncertainties, empowering advisors’ independence with access to the support and resources they need to be successful.
  4. Additional time with clients: As recent years have shown us, clients need their advisors to be more than glorified stock pickers. The most successful advisors are financial behavioral coaches, therapists, and guidance counselors, building the relationships with their clients that drive loyalty, retention and consolidated assets. But Invesco research indicates that to inspire referrals from clients, advisors need 12 meaningful interactions with them a year – which is almost impossible when they’re overburdened with back-office tasks. Outsourcing eliminates those obstacles to client connections.

CG Advisor Network empowers independent advisors to focus on what matters most – serving their clients and growing their businesses – with superior back-office support, technology and compliance services. To learn more about how we support independent advisors, read the CGAN story now!


Fidelity Investments. (2022). Top 5 Reasons to Consider Going Independent. Retrieved January 25, 2023, from https://arizent.brightspotcdn.com/b5/e5/c877cdb5465e94d30c1a22aad7ce/9906298.PDF

Evernest. (2015, July). Outsourcing: Drive Growth and Profitability, Focus on Core Competencies. Retrieved January 25, 2023, from https://www.envestnet.com/sites/default/files/documents/ENV-WP-OUT-0715-OutsourcingWhitePaper-Final.pdf

Paikert, C. (2021, May 28). How advisors should approach outsourcing. Financial Planning. https://www.financial-planning.com/news/fidelity-survey-shows-outsourcing-benefits-for-financial-advisors

Why Breakaway Advisors Need Outsourced Support. (2019, August 19). InsuranceNewsNet. https://insurancenewsnet.com/innarticle/why-breakaway-advisors-need-outsourced-support

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