As your firm continues to bring in new clients, or clients with more complex planning needs, your team of advisors and support staff are stretched thinner and thinner. Over time, the need for additional support becomes more urgent — but the process of hiring another investment professional is time-consuming, expensive, and challenging.
To continue providing a high-touch client experience without putting too much stress and responsibility on your current team members, you may find it helpful to work with an outsourced Chief Investment Officer, or OCIO.
What Does an OCIO Do?
An OCIO can handle as much or as little of your firm’s investment-related responsibilities as you need in order to regain your time and meet the ongoing demands of your firm and your clients. As a knowledgeable and unbiased third party, an OCIO can help your key leaders facilitate a smooth transition, make forward-focused decisions for the firm, and provide a professional second opinion on all investment-related matters.
Because an OCIO is experienced in managing investment tasks, they can also help you understand what responsibilities you may not be aware of now but should start doing in the future to better serve your clients.
Depending on what you’re looking for in an OCIO, they can be client-facing or work entirely behind the scenes to support your current team members. Some firms choose, for example, to forward emails with investment-related questions from clients to their OCIO, then either relay the information back to the client or schedule a call for everyone to work through it.
How an In-House CIO and OCIO Can Work Together
While an OCIO can completely replace the role of an internal CIO in a firm, they can also offer additional support for in-house advisors who wish to offload some of their investment-related responsibilities.
Internal CIOs are pulled in many directions, from managing their team to serving their clients and executing investment strategies. For many CIOs and advisors, being able to work one-on-one with clients was a big reason why they got into the business of financial services in the first place. The problem is, there are a number of ancillary tasks that have to be done during the workweek — but there are only so many hours in a day to do them.
The more a CIO or senior advisor can outsource — and feel comfortable with who they’re outsourcing to — the more they’re able to focus their time and energy on meaningful tasks that they enjoy doing.
See an OCIO in Action
While some assume that OCIOs are meant to replace in-house CIOs, East Bay Investment Solutions has helped a number of advisory firms by supporting their internal team with expanded capabilities.
In one particular instance, one advisory firm’s internal CIO (we’ll call him Frank) was balancing far too many responsibilities on his plate. He knew something needed to change, which is why he turned to us to discuss his options.
Frank came to the conclusion that he had two options:
Option #1: Continue managing all the work himself, which would increase his risk of burnout, as well as increase the odds that he’d make costly mistakes or important tasks would slip through the cracks. Frank recognized that this was not a viable long-term solution, especially as the firm continued to grow its AUM and add new clients.
Option #2: Frank could hire someone internally to help him out. The problem was, expanding your firm’s team is no easy feat. It’s a time-consuming process, payroll is expensive, and this decision lacks flexibility (should demand drop in the future, for example, and the help is no longer needed). Not to mention, hiring internally is risky. The candidate may be a bad culture fit or they might decide to leave soon after starting. In which case the process would start all over again.
Frank didn’t like either option #1 or #2, so we introduced him to option #3: outsourcing his additional responsibilities to an OCIO.
We explained to Frank what an OCIO does, and together we talked about what his specific needs are and whether our team would be a good fit for him — which is a critical step in hiring an OCIO. Once he saw the expansive list of services we provide and the help we can give him, he decided it would be a much better investment to work with us than hire more internal staff members.
Now, we’re available to support Frank and his firm however we can, from conducting research to taking time-consuming and repeatable tasks off his plate.
Expand Your Capabilities With an OCIO
Whether you’re looking to replace a retiring CIO or support your current leadership team with experienced outside help, you need people you can trust. When working with a knowledgeable and responsive OCIO, you have the peace of mind and freedom that comes with knowing your investment-related tasks and responsibilities are well-cared for. To learn more about East Bay Investment Solutions and our OCIO services for RIAs, contact us today.
East Bay Investment Solutions, a Registered Investment Advisory firm, supplies investment research services under contract.
This document contains general information, may be based on authorities that are subject to change, and is not a substitute for professional advice or services. This document does not constitute tax, consulting, business, financial, investment, legal or other professional advice, and you should consult a qualified professional advisor before taking any action based on the information herein. This document is intended for the exclusive use of East Bay clients, and/or clients or prospective clients of the advisory firm for whom this analysis was prepared in conjunction with the EAST BAY TERMS OF USE, supplied under separate cover. Content is privileged and confidential. Information has been obtained by a variety of sources believed to be reliable though not independently verified. To the extent capital markets assumptions or projections are used, actual returns, volatility measures, correlation, and other statistics used will differ from assumptions. Historical and forecasted information does not include advisory fees, transaction fees, custody fees, taxes or any other expenses associated with investable products unless otherwise noted. Actual expenses will detract from performance. Past performance does not indicate future performance.
The sole purpose of this document is to inform, and it is not intended to be an offer or solicitation to purchase or sell any security, or investment or service. Investments mentioned in this document may not be suitable for investors. Before making any investment, each investor should carefully consider the risks associated with the investment and make a determination based on the investor’s own particular circumstances, that the investment is consistent with the investor’s investment objectives. Information in this document was prepared by East Bay Investment Solutions. Although information in this document has been obtained from sources believed to be reliable, East Bay Investment Solutions does not guarantee its accuracy, completeness, or reliability and are not responsible or liable for any direct, indirect or consequential losses from its use. Any such information may be incomplete or condensed and is subject to change without notice.
Visit eastbayis.com for more information regarding East Bay Investment Solutions.