9 Wealth Management Functions You Can Easily Outsource

Resource outsourcing helps firms work better and save money. It also lets internal teams focus on important projects. If you are a financial advisor, manager, or part of a wealth management firm, consider outsourcing some tasks. This can help improve your operations. It can also enhance your service. Here are 10 wealth management functions you can easily outsource to improve your operations.

1. Compliance and Regulatory Reporting

One of the most time-consuming and highly regulated aspects of wealth management is compliance. Firms often struggle to keep up with changing regulations and ensure they meet all legal requirements. Outsourcing regulatory compliance functions, such as CAT reporting, CAIS reporting, or regulatory filings, ensures that your firm remains in full compliance with SEC and FINRA regulations without the added internal burden.

Outsourced functions:

• CAT and CAIS reporting
• Regulatory filings like Form Custody, SIPC 6 & 7, and Focus Schedule I
• Support during SEC and FINRA examinations
• Required annual testing such as branch exams

2. Chief Compliance Officer (CCO) Services

Hiring an in-house CCO can be costly, especially for small or mid-sized wealth management firms. Fractional CCO services allow you to benefit from the expertise of professionals who specialize in managing compliance and regulatory risk. Whether conducting reviews, developing compliance programs, or training staff, an outsourced CCO can handle it all.

Outsourced functions:

• Development of compliance programs
• Conducting compliance reviews (both onsite and remote)
• Employee training on compliance topics

3. Compliance Reviews

Managing compliance tasks, such as email review, is essential for wealth management firms. Outsourcing these tasks helps ensure accuracy and timeliness. It also helps meet regulatory requirements. This allows internal teams to focus on more important work.

Outsourced functions:

• Reviewing email
• Enhanced Due Diligence

4. Transaction Flow and Operational Procedures

Efficient transaction flow and well-defined operational procedures are critical for wealth management firms. Outsourcing back-office tasks, like trade desk activities and market-making rules, helps ensure these functions are done well. It also makes sure they follow industry standards.

Outsourced functions:

• Supervision of trade desk activities
• Transaction flow management
• Operational procedures for front-, middle-, and back-office functions

5. Testing Policies, Procedures, and Internal Controls

Testing and assessing the effectiveness of your firm’s policies and internal controls is crucial for maintaining compliance. Outsourcing these tasks ensures that someone executes them properly, providing the added benefit of external expertise.

Outsourced functions:

• Testing policies and procedures
• Internal controls assessments
• Policy and process reviews

6. Outsourced FINOP Services

An outsourced FINOP (Financial Operations Principal) can help wealth management firms manage their financial operations effectively while ensuring compliance with financial regulations. Outsourcing this function provides firms with access to experienced professionals who specialize in the regulatory environment.

Outsourced functions:

• FINOP services for financial management
• Reviewing financial reports and accuracy
• Monthly and quarterly filings such as FOCUS Reports
  

7. Risk Management Services

Wealth management firms must maintain a robust risk management strategy to protect client assets. Outsourcing risk management tasks, such as classification and categorization of risk, analysis of risk structure and parameters, monitoring, and risk assessments, can help your firm mitigate risk while maintaining efficient operations.

Outsourced functions:

• Risk management for trading and portfolios
• Profitability analysis for trade desks
• Sales coordination and performance metrics

8. Documenting and Developing Operating Procedures

Creating, maintaining, and updating operating procedures can be an ongoing challenge for wealth management firms. Outsourcing this function helps you document your procedures correctly and keep them up to date with industry best practices.

Outsourced functions:

• Documenting processes and procedures
• Supporting development of operating procedures
• Policy development and training

9. Client Relationship Management

Outsourcing client relationship management functions can help wealth management firms improve service delivery without the need to expand in-house teams. You can outsource tasks such as managing client communications, onboarding, and client engagement to specialists, ensuring high-quality service.

Outsourced functions:

• Client communication management
• Client onboarding and support
• Client engagement and reporting

Benefits of Outsourcing Wealth Management Functions

Outsourcing these key wealth management functions offers several benefits, including:

• Increased operational efficiency by freeing up resources for core business functions.
• Access to specialized expertise in areas like compliance, accounting, risk management, and investment strategies.
• Cost savings as outsourcing allows firms to avoid the overhead costs of hiring full-time employees for specialized roles.
• Improved regulatory compliance, ensuring that your firm meets industry standards and stays ahead of ever-changing regulations.

Final Thoughts

Outsourcing can significantly enhance the efficiency and effectiveness of wealth management firms by offloading time-consuming tasks to experts. Outsourcing helps your firm manage compliance, reporting, and client relationships. This allows you to focus on important areas like gaining new clients and growing your business. It also ensures that your operations run smoothly.

Next Steps:

If you’re considering outside services for specific wealth management functions, contact Oyster Consulting today to learn how we can support your business with tailored outsourcing solutions. We provide expertise and services in compliance and investment management for registered investment advisors and broker dealers. Our goal is to simplify your operations and help you stay ahead of the competition.