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Outsourcing – Ways to Cut Overhead Expenses

Outsourcing – Ways to Cut Overhead Expenses

00:00 01 June in Articles Written by Jon Henschen

by Jonathan Henschen, CFS and featured in Producers Web
June, 2006:

It’s not uncommon for me to run into advisors who are paying up to five salaried assistants, and whose production is down around $500,000 in Gross Dealer Concession–their total net revenues from commission product sales and fee-based income. That’s a lot of overhead eroding what these advisors are actually netting at the end of the year!

Even though our industry thinks almost exclusively in terms of “GDC,” an advisor’s “net revenues” are the true benchmarks of success. That means, the lower the cost of doing business, the more profitable the advisor! To prove my point, I recently began making highly profitable use of the outsourcing resources described here. As a result, my modest little experiment has reduced my business overhead. Big Time!

See if you don’t come away from this article with a brand-new perspective on outsourcing. Try it! Catch the wave of the future; I think you’ll like where it leads. Let’s get started with…

Imagine being able to outsource all of the many administrative duties normally assigned to assistants, and, in doing so, avoiding all the headaches that come with full-time employees:

  • Social security taxes
  • Vacation pay
  • Sick days
  • Health & Dental Insurance
  • No personal conversations interrupting your focus!

The “International Virtual Assistants Association” (IVAA) is a non-profit organization dedicated to the professional education and development of “Virtual Assistants.” What is a Virtual Assistant you ask?

A Virtual Assistant (VA) is an independent entrepreneur providing administrative, creative and/or technical services. Using advanced technological, communication and data delivery, professional VA’s assist clients (that would be you and me!) in their areas of expertise from their own offices, and on a contractual basis.

Several years ago I hired a Virtual Assistant through and have since reaped many benefits. To give it a try, go to to check your “job and educational requirements”. Access to this process costs $75 per year (and is worth every penny!).

A day or two after submitting your work order, you’ll get responses from several VAs fitting your parameters (you can, however, limit your search to your state, to the United States; or to overseas, if you prefer). At the time, I needed a VA with strong marketing and website backgrounds. The third responder was a perfect fit, complete with Master’s Degree in Marketing and a strong internet website management. My VA is used when and as I need her; at $50 per hour, her services have been averaging 12-hours per month.

I’m in Minnesota, but my VA was in Cleveland–although she recently moved to Atlanta due to her husband’s work transfer. The beauty of having a VA is that normally business-killing, life- changing disruptions like that are now irrelevant! What’s more, since most advisors need at least one assistant to greet clients and do hands-on office duties, as your business grows, VA’s can be hired to perform additional duties on an as-needed basis. You can even have several VA’s at your disposal; each having specialties, such as scheduling seminars, prospecting and sending out invitations, and designing, writing and producing your marketing materials.

The bottom line? Using one or more VAs versus hiring additional full-time staff will do wonders your overhead.
Next in line: Elance and Guru are outstanding resources for getting competitive bids from independent contractors to do virtually anything your back office needs doing. Here are just a few options that apply to financial services advisors:

Website Development – Make your website stand out in the crowd. Online marketing brings visitors to your website with optimized search engine content, banner ads and effective e-mail marketing.
Printing – You can get competitive bids on printing jobs from around the corner to around the country. Why not use competition to your advantage, rather than settling for local printers time after expensive time?
Graphic Design & Art – Make use of professional design and art talent for your brochures, marketing kits, sales material and multi-media presentations. Competitive bids are available for layout, benefit-driven service descriptions and illustration for books, brochures, newsletters or whatever else you may have on tap.

Writing & Translation – Find experienced marketing and technical writers for powerful sales letters and web content that raises search rankings and increases conversation rates. This will simplify your life by creating monthly newsletters and professional, high impact articles. You can also hire proof readers or copy editors to give your own drafts polished appeal.

Sales & Marketing – Find sales and marketing professionals to help target the right marketplace, craft compelling messages and sell your audience. They can also assist in business planning and market research that identifies the right groups to target with your ideas. Marketing and sales consultants can help build winning marketing plans and craft just the right sales messages; while promotional experts help you get the word out. At the same time, an experienced copywriter will power-up your advertising, e-mail campaigns, direct marketing materials, sales presentations and public relations pieces. You can even get help from telemarketing and lead generation specialists.
Administrative Support – Have a big job or project on the table? Get help with typing, data entry and travel planning. An administrative support person can format your presentations for style and impact. In fact, this is a great resource for managing bulk mailings and organizing mailing lists. These folks also offer event coordination, which make meeting planning virtually effortless. Outsourcing administrative tasks is a cost-effective way of freeing up your time while growing your business.
Audio, Video & Multimedia – Bring high-production quality to tight-budget projects. It makes sense to outsource AV expertise, voice-over talent for radio commercials, help with streaming media, or any types of AV jobs.

Other areas of possible interest would be Accounting & Finance, as well as Legal. With legal services, get competitive bids based on your needs to incorporate, for instance, or to set up an LLC or partnership formation. Need a securities attorney due to a recent customer complaint or dispute with your broker/dealer? Rather than thumb-checking the Yellow Pages, go straight to or to find the right person, with the right knowledge and skills, at the right price.

Next, we frequently meet advisors who want to do business through outside sources, such as Schwab. Besides having to be with a broker/dealer that will allow you to have your own RIA, your business need to be administratively self-sufficient. That means buying expensive programs with DB Cam, Advent or Centerpiece, as well as dealing with labor-intensive client-information and cost-basis data entry. Moreover, in addition to performance-reporting, you’re on your own when it comes to account billing and fee deduction.

Or not…!

BridgePortfolio is a great way to outsource all that administration work in a highly cost-effective manner. Besides outsourcing your Accounting & Reporting, you can also outsource these typical advisor functions:

  • Web-based Technology
  • Private Label Website Development & Hosting
  • Client, Advisor, Portfolio Manager & Compliance-Level Access
  • On-line Client Data Capture & Account Opening Process
  • On-line Suitability Analysis & Investment Proposal
  • Portfolio Reporting Viewing
  • Administrative & Marketing Support
  • Account Opening Paperwork & Transfer Processing
  • On-going Liaison between Advisor & Custodian(s)
  • Dynamic Portfolio Modeling & Trading
  • Web-based Interface For Manager and/or Advisor
  • Block Trading & Allocation
  • Dynamic, Non-Static Models
  • Manager/Advisor Can Manage Multiple Portfolio Models
  • Manager/Advisor Can Manage Thousands of Accounts As One
  • Manager Due Diligence & Selection
  • Access To Unique Top-Tier Managers
  • Manager Research, Analytics & Selection
  • Negotiation of Management Fee


Advisors occasionally think and rethink how and where they want to run their businesses. Some would like offices at home, but feel they need to be somewhere to meet clients—a place with a professional appearance that is technologically well-equipped for power-point presentations, and the like.

Enter: HQ Corporate Headquarters (HQ.COM), which provides the best alternative I’ve found to that dilemma. “HQ” has a national presence, with office alternatives that meet a variety of needs. For home office reps, the part-time office is perfect: You only pay for the office time used, while enjoying the full benefits of administration and IT support while you’re there. With 80 hours a month of private office time, a part-time office is perfect for professionals who require local market presence, but don’t need an office full-time. Besides part-time offices, you have these added options:

  • Full-time Office
  • Branch Office
  • Project Office
  • Start-up Office
  • Team Office
  • Hot Desking
  • Cubes
  • Network Access

In addition to those, consider these Administration and Technology options:

  • Receptionist and welcoming area
  • On-site center manager
  • Telephone answering
  • Fully Furnished meeting & video conference rooms
  • Common areas
  • Fully stocked kitchen
  • Private, secure work areas
  • Printers, fax machines, scanners & copiers
  • Mail delivery and postage machinery
  • Multi-access TI & telephone ports
  • Continuous IT maintenance & support
  • Digital telephones
  • Three-point security system
  • Daily office cleaning services
  • High-speed Internet access
  • Local area Network
  • 24/7 availability
  • On-site utilities & maintenance

To recap these on-line outsourcing resources, we have:

IVAA.ORG – Educating and developing members of the Virtual Assistance profession, and educating the public on the role and function of the Virtual Assistant.
ELANCE.COM – Enabling businesses to outsource their administrative, design and web-development work.
GURU.COM – Connecting with top professionals to complete your projects.
BRIDGEPORTFOLIO.COM – Providing a platform to investment advisory firms seeking a method to profitably deliver portfolio management to their clients in a customized, private-label platform.
HQ.COM – Acquiring business-ready offices, meeting rooms and virtual offices.

Check Out Those Websites!

Think-through the impact these resources can have your business. To be competitive, many broker/dealers are using these outsourcing resources to cut back on staffing and cut other overhead costs as needs arise. To share my personal experience in outsourcing, I’ve had a VA for about three years, with costs averaging $600 per month. In addition to my VA, I also have a consultant, a talented writer/copy editor, and a cartoonist.  The cartoonist I found on GURU.COM, and my VA checks ELANCE and GURU for cost savings on printing and projects on an as-needed basis.

All together, my outsourcing costs totaled just over $18,000 last year, which is a fraction of what I would have spent doing the same functions in-house. As mentioned, many broker/dealers have caught on to outsourcing as way of cutting expenses; but as an advisor, you have even more options at your disposal.

Catch the Wave!

Why not catch the wave of the future? Make good use of the time and cost-savings that these and other outsourcing resources can and do provide!