Founders of RIAs have it hard. As a professional Financial Advisor, you’re the best at what you do—but now you also have a million and one other hats to wear. You’re the business owner, operator, financial manager, marketing officer, strategic consultant, and sometimes even the plumber if things take a turn for the worse. Wouldn’t it be great if you could share that load with someone with specific expertise, no conflict of interest, and a vested interest in the success of your business? Enter the outsourced c-suite.
The idea of outsourced c-suite roles like COO, CIO, and others isn’t a new one, but it’s certainly taken off in popularity here in the age of the startup. As small companies like yours evolve and start to scale, all those upper-level responsibilities become crucial to your success long before you can afford to assign someone to that role full time. By hiring on a part-time or fractional basis, you’re able to tap into the expertise of an executive without footing the bill for a full-time hire.
What role should you start with? Well, it depends on you.
Chief Investment Officer (CIO)
An experienced Chief Investment Officer (CIO) will liberate you from the confines of third-party asset management. As you grow, your margins should grow too…but if you are tied to a TAMP and/or a third-party asset manager, your practice will never reach “escape velocity”, since these are variable costs to your business. For your practice to become a truly scalable and profitable business, asset management should be a fixed cost. Only then can you truly achieve economies of scale, or “operational leverage.” The best way to do this is through an Outsourced CIO (OCIO).
It’s simple. Rather than pay an outside manager a basis point fee, pay a fixed OCIO fee. As your revenue grows, the cost for asset management remains fixed. Result? Profit. As an Executive Recruiter within the Asset and Wealth Management industries, I have established relationships with some of the best and the brightest CIOs and Portfolio Managers in the U.S—and many of them are fixed-fee. Now that’s value that goes not only to client experience, but also to your bottom line.
Chief Operations Officer (COO)
A strong Chief Operations Officer (COO) can skyrocket a young business’s success by providing tactical know-how on scaling, operability, and business management. Not all great Financial Advisors are also great at running a business for profit. As the owner and CEO, you have a lot of big ideas, and your COO will help you make those dreams a reality with a down-to-earth action plan. You’ll be able to take a step back from the operations of your business as it is and focus on the future.
One benefit of this role as an outsourced one is that it is also a great way to learn more about what efficient operations actually looks like. If you want the COO to be temporary and may not look to hire again after their stint is done, think of this as a serious apprenticeship in operations management. Learn from this individual, so that you can manage your business more efficiently after they’re gone.
Chief Executive Officer (CEO)
But wait, you’re thinking. This is my business, I’m the CEO—so why would I hire another CEO, even on a fractional basis? The answer is simple: You don’t have enough time. Maybe you’re tired, maybe you want to start another business, or need to step back and focus on your family for a while, and you just don’t want to give up your business quite yet. This is the area where an outsourced CEO really shines.
You can enjoy all the benefits of delegating the day-to-day leadership of the business you’ve worked so hard to build, without committing to longer than 3-6 months away from the helm. If you change your mind, since the outsourced role is contractual, you can always take back the reins whenever you’re ready. We’ve seen this type of outsourced c-suite function serve many business owners very well over the years.
Whatever role or roles you choose to outsource, know that by doing so, you’re laying a strong foundation for your company’s next phase of growth. By bringing in these talented, experienced individuals, you’re able to do more, with less—just until you’re ready for the big leagues. If you’re ready to connect with your new outsourced c-suite, contact us today. We have a wide network of contacts around the nation, and can work to connect you with the right individual for your company’s needs.