By David B Partain
Head of Marketing
FlexShares Exchange Traded Funds
For two years, the FlexShares Advisor Wellness Survey revealed that regulatory issues were among the top two stressors experienced by financial advisors. While many advisors are trying to stay abreast of changing regulatory requirements on their own, our survey found that more than a third are outsourcing the compliance function. About the same percentage of advisors cited outsourcing the investment management function, and 17% utilized third-party resources for marketing. Unfortunately, less stress or an improved feeling of wellness was not an outcome of such delegation.
More time and efficiency, if not less stress
While using third-party providers doesn’t necessarily relieve stress, we do know that it can make your business more efficient. In fact, FlexShares’ Race to Scalability 2018 research found that advisors grew their client base as a result of using external investment managers for at least some of their investment activities. This delegation freed up time to enhance personalized planning for existing clients and to prospect for new clients. Interestingly, in our Advisor Wellness Survey, advisors enduring the highest levels of stress were those with more holistic, planning-based service models. Those who strictly managed money were the least stressed. So while advisors may be getting more done by outsourcing, they are still dealing with the stresses that relationships can bring.
Finding the right fit
For advisors managing their own investments, a host of options can lighten the load if more time and focus are needed for client engagement. Recommended security lists and turnkey models are available from home offices. And, at FlexShares, we offer both easy-to-implement, outcome-oriented exchange-traded funds and strategic models that are designed to help advisors implement well-diversified, cost-efficient portfolio solutions. Some advisors seek increased efficiencies through back- and middle-office technology solutions. Each scenario can help create more time for advisors to focus on relationship-building activities.
Whether regulatory concerns or other functions are causing you stress, it’s important to understand where you add the most value within your business. Do you have the ability to delegate functions you're currently managing that are taking you away from what you do best? What is the best path of growth for your firm? Are you a better money manager or client manager? Once you figure that out, put people with the right experience levels (inside or out) in the correct roles. Not surprisingly, our study found that stress levels were lower with age, experience, and higher levels of assets under management.