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TAMP or Outsourcing Solutions Provider?
Download a supplemental research report created for turnkey asset management program (TAMP) and other outsourcing solutions providers.
How clients react to the news and the changes that result from outsourcing is the focus of Northern Trust Investment’s third biennial study on financial advisors’ increasing adoption of investment management outsourcing. Also in the research: advisors’ perspectives on the impact outsourcing has on their business and an updated look at advisors who are not outsourcing and their rationale.
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Most advisors provide one of two reasons when explaining their firms’ decision to outsource.
Nine out of 10 advisors say clients have a positive reaction to the outsourcing announcement. Four out of five advisors (80%) report no loss of clients and/or firm revenue as a result of outsourcing.
More time for clients, the ability to grow efficiently and the ability to develop a more consistent investment management process for the firm — surveyed advisors say these are the top three benefits of outsourcing. Download the whitepaper for the complete report.
A few differences can be seen across firm types. RIAs especially value the ability to offer a wider array of investment products while advisors from independent financial planning/investment advisory firms rank institutional-level due diligence and monitoring as a top benefit.
Overall, nine out of 10 advisors are satisfied — and four out of 10 are very satisfied — with their decision to outsource. This has been a consistent finding in the previous two surveys.
Why don’t advisors outsource investment management? The leading reason in 2014 has been the leading reason in the previous years’ research. Advisors say investment management is central to their firm’s value proposition.
Other reasons not to outsource include the desire to retain flexibility (14%), failure to find a solution that supports the firm’s business (10%) and inability to justify the expense (9%). Download the whitepaper for the complete report.
Self-sufficiency comes at a cost, though. The research breaks down the time spent per week by advisors who conduct their own investment manager research, portfolio construction and portfolio monitoring. New this year: Data on the time advisors spend working on related technology.
Source: “Investment Management Outsourcing: Impact on Clients,” Northern Trust, 2014
Northern Trust’s “Investment Management Outsourcing: Impact on Clients” survey is based on a survey of nearly 200 Advisor Perspectives subscribers in late November and early December 2013. For more about the survey and its findings, see the microsite at www.northerntrust.com/outsourcing.
Listen to the February 26, 2014, Webinar featuring Northern Trust’s release of “Investment Management Outsourcing: Impact on Clients” and a panel discussion moderated by Advisor Perspectives Publisher Robert Huebscher. Panelists included leading outsourcing solution providers and survey partners:
The first report, published in 2010, presented a lay of the land. Two reports were produced:
The 2012 report was focused on advisors’ expectations during the solutions provider vetting process versus their experience. Publications included:
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This material is provided for informational purposes only and does not constitute an offer of any security. Any opinions expressed herein are subject to change at any time without notice. Information stated is believed to be reliable but its accuracy and completeness are not guaranteed. Past performance is not indicative of future returns. This information is general in nature and should not be construed as legal, investment or tax advice. Your own advisors should be consulted as to how this information affects your personal circumstances.
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