Why Financial Institutions and Family Offices Are Adopting Outsourced Accounting and Investment Reporting Solutions to Serve Their Ultra High-Net-Worth Clients
In some corners of the private wealth management world, the word outsourcing, sometimes referred to as business process outsourcing (BPO), has become taboo. Oftentimes considered synonymous with offshoring, outsourcing has erroneously been painted as cheap work performed by unskilled labor.
But it only takes a bit of due diligence to find that these negative connotations are often an inaccurate portrayal of the true value of an outsourced service offering.
To that end, like other outsourced service providers to family offices and financial institutions, Archway is frequently faced with questions about our people, our processes and our technology and, ultimately, why outsourcing may be the right solution.
To help answer this question, here are 10 reasons private wealth managers are leaning into outsourced services.
1. They enable you to grow, quickly.
A new advisor joins your firm and brings a dozen new clients into the firm. Is your team prepared to absorb the account aggregation and report preparation responsibilities that will soon follow?
When you’re in high growth mode, the last thing you want to do is realize your team is not equipped to scale. An outsourced service provider like Archway can help financial institutions and family offices smoothly onboard new clients or households, so that wealth managers can focus on helping their clients achieve their wealth goals.
2. They can enhance your quality of service.
Enhanced service quality tops the list and it’s quite a simple notion.
Instead of spending time normalizing data, performing consolidations, paying bills or preparing and reviewing report packages, private wealth managers can focus on their passion: serving their clients and delivering results that build client wealth.
3. They provide business continuity in the event of disaster or significant change.
We’ve learned some tough lessons throughout the pandemic, but one that stands out for businesses is strengthening their ability to overcome disruption. Whether you’re trying to minimize the effects of a health crisis, employee departures or just a simple power outage, having a dependable outsourced service partner helps ensure that you can continue to meet the demands and expectations of your clients despite forces beyond your control.
4. They offer workforce stability in the face of employee turnover.
Key person risk is one of the chief concerns amongst family offices and financial institutions. If an employee departs or a position needs to be eliminated, how do you ensure that your operations don’t falter?
From our vantage point, outsourced service providers should operate as a seamless extension of your internal team. Using operational documentation, thorough communication and repeatable processes, an outsourced service team can quickly take on additional responsibilities in the absence of key personnel.
5. They are built on operational expertise.
There’s an adage that says, “You can be great at one thing or good at many.” We believe that you should always strive for greatness, which may mean leveraging third-party resources to perform key tasks that sit outside of your expertise or aren’t a valuable use of your time.
By partnering with an experienced BPO team, you will be able to work with subject matter experts and highly-skilled operations professionals that are solely focused on a single function. Examples of commonly outsourced activities include:
6. They help you manage risk.
In some cases, particularly amongst private banks and other financial institutions, there may be compliance requirements related to particular service offerings that necessitate the need for third-party oversight. This oftentimes translates to creating a business relationship with an outsourced service provider.
Financial institutions and family offices can further manage their risk exposure by establishing service-level agreements (SLAs) with outsourced service providers that help define the who, what and when of service delivery.
7. They allow you to customize your solutions offering.
We’ve all watched this scene play out before: you’re courting a new client who presents a unique set of wealth management demands and you need to spin up a new solution offering quickly. It can be an anxiety-inducing situation if you don’t already know what’s out there.
On the other hand, if your financial institution or family office has a pre-established relationship with an outsourced service partner, it’s much easier to explore other available services and expand your relationship on an as-needed basis. Additionally, you can craft tiered service offerings that span the range of your clientele to ensure you’re delivering the right solutions to the right clients.
8. They provide efficiencies in your back office.
Most outsourced services focus on one of two areas: highly repetitive processes or highly specialized processes. The common thread between these two areas is that they both require a significant amount of time to complete.
By allowing an outsourced service team to absorb click-heavy, recurring operations like portfolio reconciliation, or time-consuming, tedious operations like family office partnership accounting, your staff can focus on doing what they do best and not worry about the monotony of data.
9. They can offer access to purpose-built technology.
While some envision BPO firms as shops filled with endless rows of desks and people, the reality is that most outsourced service organizations rely on a key tool to help drive efficiency: specialized technology.
At Archway, our BPO teams use our proprietary family office software, the Archway Platform℠, to perform the nuanced operations that exist within family offices and financial institutions serving high-net-worth clients.
Then, using the Archway Client Portal, we can securely deliver the processed and formatted data to family office professionals, advisors and their end-clients in an intuitive, easy-to-use platform. This gives them the opportunity to engage with their financial information in an interactive, tech-forward way that may not exist if the family office was exclusively responsible for designing and developing the end-client reporting experience.
10. They can reduce your firm’s overhead costs.
Maintaining technology can be expensive, especially if you are the designer, developer, quality assurer and information systems architect.
An outsourced service partner alleviates the need to maintain the technology and the servers that run it, which can ultimately reduce your overhead IT costs. As both an experienced technology firm and an award-winning outsourcing provider, our services include:
- Hosting and server maintenance
- Data backup and disaster recovery
- Ongoing technology enhancements via product upgrades and feature releases
- Software quality assurance
- Data collection and normalization
- System connectivity troubleshooting
- Product documentation and training
We know that outsourcing doesn’t always receive the recognition and appreciation it deserves, but the benefits of partnering with an outsourced service provider are demonstrated to be plentiful for private wealth management firms.
Whether you are seeking to ease the burden of client reporting, add new concierge services like client bill payment or offload the complex process of private fund bookkeeping and reporting, Archway is prepared to work and grow alongside your firm.
Check out our full suite of technology and outsourced service solutions for family offices and financial institutions to find out how we can help you better serve your high-net-worth clients.
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