What RIAs Get Out of Outsourcing

That level of business is usually a 2- to 3-advisor partnership that does not always have an operations manager but is "growing enough that the challenge to their team is that they don't have the time to think about what technology they'll use and how to integrate it," Mordecai says. (For sole practitioners, working with an outsourced back office is a "no brainer," he adds.)

"The advisors might have come out of a large institution … where they had full support and now they have to do it themselves or their business falls apart," he says. "Our account managers consider themselves to be personal technology and operations consultants." 

But Mordecai stress that does not mean AllBackoffice will shake up the advisor's technology, moving them to products they're unfamiliar and uncomfortable with.

Rather, the firm tries to get a big-picture view of what resources the advisor is already making use of and determine what systems work best together.

"He may have access to document storage that he does not know about; we'll help him with his due diligence and manage migration," he says, adding that "technology tends to work in suites."

While there is a lot of superb technology available, Mordecai says most advisors don't know how to leverage it. He compares it to the thousands of apps on an iPhone. While nobody is going to use all of them, the challenge is making optimal use of what is available.

Just as the iPhone user needs to be able to make phone calls, send text messages and view email, an advisor minimally will need portfolio accounting software and some sort of administrative infrastructure set up so that when he creates a client proposal, he has some place to put that — preferably, these days, in the cloud.

Those are the basics that keep an advisor's business alive, but other options — such as a CRM that is perhaps more robust than Microsoft Outlook — could be used to help the business thrive.

Advisors, of course, have different definitions of what success means. On the other end of the spectrum from the enterprise-building RIAs he works with, Mordecai also works with boutique RIAs more interested in spending time with their families or on their yachts.

Such advisors, he says, need to simplify.

"They're looking for as much leverage as possible" to acquire not books of business but time.

"One very good way of reducing meetings is encourage clients to meet over the phone (using software like GoToMeeting) and going paperless," Mordecai says. "An awful lot of advisors write their own newsletters — that causes a lot of stress; it drags through two or three weekends of their time. In that case, we'd recommend a content partner." 

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