How to Choose the Best Back Office Outsourcing Provider for Wealth Managers

Are you a wealth manager who struggles to provide exceptional client service due to overwhelming administrative tasks? 

If you are, back-office support outsourcing can help you resolve this concern.  

What is Back-office Support Outsourcing? 

Back-office support outsourcing offers wealth managers an efficient way to delegate and pass on some of their administrative tasks to a specialized third-party provider. This includes things like accounting, payroll, and bookkeeping. 

Through this solution, your organization can free up time for more important work and reduce costs by not needing to hire additional in-house employees just to take care of these tasks. 

Read: When to Consider Back-Office Support for Your Company 

Why Wealth Managers Should Consider Outsourcing Back Office Work 

There are plenty of reasons why wealth managers should consider outsourcing their back-office tasks. Here are some of the top benefits they should take into account: 

• Access to Specialized Expertise 

The right outsourcing provider can help you get access to professionals who know the latest rules and technologies. These professionals stay updated with changes in the industry, ensuring your organization follows all necessary rules without needing extra in-house training or hiring. 

• Cost Savings 

Outsourcing can be a cost-effective way to get the services you need without having to hire full-time employees. This allows your firm to focus on its core competencies, which may be more profitable than managing back-office work. 

• Time Savings 

By outsourcing back-office tasks, your in-house team can focus on core responsibilities. This leads to better client service and improved focus on investment strategies.  

• Improved Accuracy 

Experienced outsourcing partners will often have systems and processes in place to ensure accuracy in financial reporting and compliance, helping you avoid costly mistakes.  

What to Look for in a Back Office Outsourcing Provider 

When choosing an outsourcing provider for your wealth management firm, there are several important things to keep in mind: 

1. Know Your Needs 

Remember the saying, "If you fail to plan, you plan to fail"? This is especially true when finding the right outsourcing company.  

Before anything else, you need to understand what your organization needs, whether it's having extra support with accounting or compliance reports or finding qualified accountants who have relevant experience in your industry. Every wealth management firm has different needs, so it is important to plan and know exactly which tasks your organization needs to outsource. 

For instance: 

• Finance and Accounting: Do you need help keeping track of your books, financial reports, or tax filings? A firm that specializes in these areas could be the perfect match. 
  

• Compliance Reporting: Keeping up with regulations can be tough, and errors in this area can be costly. If this is where you need help, look for an outsourcing provider with expertise in compliance for wealth management. 

• Client Reporting and Admin: Do you need help managing reports for clients or other admin tasks that take up too much of your team’s time? 
  

Once you identify your organization’s needs, it can be easier to shortlist potential providers that excel in these specific areas. 

2. Look for Industry Experience 

Another thing to consider is the outsourcing provider’s experience in dealing with clients from the wealth management industry. If they’ve helped organizations like yours before, they’ll understand your challenges better and offer solutions that fit. They can also have better familiarity with the types of financial reports and regulations you deal with day-to-day transactions, making the transition smoother. 

You may ask the potential partner several questions such as: 

• How many wealth management firms have you worked with and what kinds of services did you provide? 

• Can you provide case studies or examples of your work in this type of industry? 

• How familiar are you with managing portfolios, tax needs, and financial rules? 

3. Ask and Evaluate Their Technology 

Technology plays an important role, especially when working with an outsourcing provider. Make sure to find a partner that uses up-to-date technology and software systems. These outsourcing providers must also be able to integrate their advanced software with your current systems. By evaluating this, it'll make the processes run smoother and the collaboration much easier. 

4. Check their Data Security 

One thing to keep in mind when you outsource back-office tasks is that you will be sharing sensitive client information. Therefore, it is important to partner with an outsourcing provider that has stringent data protection measures in place to ensure your clients' data remains secure. 

You may consider asking them the following questions: 

• What security protocols do you have in place? Look for features like data encryption, secure servers, and access control.
  
• How do you handle client data? Understand how they store, process, and protect client information. 
• Do you have a dedicated in-house IT department to oversee data protection? Check if they have an IT team focused on maintaining data security.  
• Are you compliant with relevant data protection regulations? Make sure they comply with industry standards such as GDPR (for European clients) or other relevant data privacy laws. 

5. Service Scalability 

Another benefit of outsourcing finance and accounting services is scalability. Hence, it's important to choose a partner who can expand their services to meet your organization's needs. This way, you won’t have to switch partners down the line as your needs grow. 

Here are a few questions that you can consider asking: 

• Can you scale your services as our organization grows? A reliable outsourcing partner should have the flexibility to accommodate your growth, whether you’re managing 10 clients or 100. 

• What additional services do you provide beyond our current needs? Even if you don’t need certain services now (e.g., full-scale tax preparation), it’s helpful to know if they offer them for future needs. 

6. Clear Costs and Transparency 

Outsourcing is known for being cost effective; however, it is important to understand how the outsourcing provider charges for their services. Ask for a clear cost breakdown and check for any hidden fees. 

You may ask the potential partner several questions such as: 

• What is included in your pricing model? Get a detailed breakdown of what services you’ll be paying for. 

• Are there any hidden fees I should know about? Make sure there are no surprises in the billing process. 

• Do you offer flexible payment options? Some outsourcing providers offer per-project pricing, while others charge monthly fees. Find out what works best for your firm’s budget. 

Read Next: How Offshore Accounting helps your Company's Wealth Management 

7. Cultural Fit and Good Communication 

When selecting a back-office outsourcing provider, cultural fit and communication are crucial. In a recent blog, we highlighted how cultural compatibility plays an important role in a successful partnership. The same applies to good communication. Your provider should be easy to reach and proactive in keeping you updated. 

Here are a few questions that you can consider asking: 

• How do you ensure good communication with your clients? Whether through regular reports, calls, or emails, it’s important that they maintain open lines of communication. 

• Who will be our main point of contact? Knowing who to reach out to ensures smoother communication. It’s helpful to have a dedicated account manager who knows your business. 

• How do you handle urgent requests or issues? Understand how quickly they can respond in case of emergencies or time-sensitive tasks. 

The Bottom Line

Picking the best back-office outsourcing provider for wealth managers is important. By understanding your needs, checking out potential partners based on their expertise, technology, scalability, security, communication and asking the right question, you can make a well-informed choice. 

This partnership won’t just make your back-office work better but also help your wealth management firm stand out. 

Need Reliable Accounting Support for Your Wealth Management Firm?  

Consider D&V Philippines. We have a wide expertise in handling the numbers of companies across various industries and broad experience in working with wealth management firms. Through the support of our experienced accountants, you can gain more time to make the right decisions in managing your clients’ assets. Contact us today and we’ll help you find the right solution for your needs.  

You can also download our whitepaper Unlock the True Potential of Your Wealth Management to learn how we can be your reliable back-office support.