Thursday, 1 March 2012

Why Are Financial Advisors Outsourcing Their Administration

By Gnifrus Urquart


Financial firms in the beginning had to only look after the financial aspects of a business house that paid them for the services. Consultants or advisors were their prime and only function. With time however, things have changed and now they have to also manage other aspects of the business house. This is placing these financial firms into time and resource crisis leading to the financial advisors outsourcing their administration to other agencies in turn.

Demands from clients are so many and so continuous that firms which were providing just financial advise had to include expertise in many other fields also. They were therefore finding it difficult to manage their own in-house administration and making plans for future expansion.

Financial firms have to provide these add-on services, as refusing to render them would means the client business house would remove them from their list of service provider. With such a binding force acting upon them the financial firms themselves have had to resort to outsourcing techniques.

Technology is supposed to have come to the aid of these consultancy firms, and so the book says. But that remains limited to the book only and not the real life scenario. In reality the technology does not help much to reduce manpower requirement and nor does it save much of time that it would enable the financial consultants to look after their own internal affairs.

The only manner in which the firms are able to manage their resources is to outsource some of the processes which are beyond their primary expertise. This way the financial advisory firms are able to make time to draw their own future plans also.

This shift of outsourcing by the financial consultancy firms itself has been found to be practiced by both small as well as larger sized firms. It may be felt that larger financial firms have more manpower and therefore may not necessitate outsourcing, but it must also be borne in mind that such firms also service more number of business clients.

In order to concentrate on their primary expertise, the financial advisors outsourcing their administration is the only way out for them. By doing so, they would be able to concentrate on what they are best at doing and that is to advise how to make finances grow.




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