In the world of financial advisors, there are those who have chosen to be all things to all people: a generalist. By definition, a generalist is someone with knowledge, skills or interests in many areas but with no specialty.

In days gone by, we might have referred to them as "a jack of all trades, master of none." And, while the reference might at first appear demeaning, the full quote was "Jack of all trades, master of none though ofttimes better than master of one." A generalist might be considered a master of integration, someone who is familiar with many disciplines and is capable of bringing those skills together to form a cohesive whole. In this light, the generalist might describe most advisors, who bring together advice on investment management, financial planning, taxes and legal issues to form a plan of action for a client. Still, the question is, how much is too much for one person to handle?

For some practices, it may boil down to what is affordable and sustainable. Operating a true family office, with in-house legal counsel, tax preparation, investment management and financial planning, not to mention a laundry list of other services, can be complex and expensive. Simply maintaining the salaries of the various employees needed for such an operation can be daunting. Advisors who seek to create this atmosphere, but with lower costs, outsource many of the services to create what might be called a concierge practice. The financial advisor acts as the integrator and may even arrange for all meetings to be held in his office to better maintain control. Both models, family office and concierge, require a high degree of integration and cooperation among the various disciplines involved.

In a concierge practice, outsourcing is the key to optimizing profitability and making the best use of the advisor's schedule and resources. Typical choices available for outsourcing could be:
Financial planning
Investment management
Estate planning
Tax preparation
Lifestyle planning
Travel planning

While few firms would consider outsourcing all of these, many firms have chosen to cherry-pick one or two items from the list. In the case of financial planning, for example, the back-office work in preparing a financial plan often is outsourced. In other words, the financial advisor meets with the client, gathers the data and then sends this to an outsource provider to do the software inputs and initial analysis. The advisor then finishes the plan and delivers it to the client. The outsource provider, in effect, takes the place of an in-house paraplanner or another staffer. Assuming that a staff person would cost at least $35,000 to $40,000 per year and the outsource service would cost $600 to $1,000 per plan and provide 20 plans per year, the firm could save as much as half of that staff position's salary with such a service. Granted, paraplanners are likely to do much more than just prepare plans, but the cost comparison does raise the question of when an outsource provider might make sense for a practice.

Another critical question is which outsource provider is the right one for your practice. To find the answer, the firm needs to look at the outsource provider's work, peruse examples of output and talk with the provider about coordination, delivery speed, content quality, and so on. Working with a firm that writes plans with the software you use is probably essential except in the unlikely case that you are willing to switch platforms. More than that, the style the outsource provider uses to develop the financial plan is important. Does it match the advisor's style? Sometimes a provider may write a financial plan with paragraphs that do not sound like the advisor's words. Or, worse, the advisor adds paragraphs that sound completely different. The key is to coordinate the language and feel of the narrative so that it is seamless and transparent to the client, and appears to have been completely written by the advisor. The outsource provider must be highly skillful to pull this off and be willing to go beyond the "cookie-cutter" approach to preparing the plan. One company that embraces this approach is Back Office Solutions (

Many firms also use outsourced solutions for investment management and reporting. The question is which provider is right for a particular firm's needs. Again, doing homework on the various offerings could save you thousands. Anecdotal evidence on companies often is unreliable at best. For example, a colleague might have told you that a particular company had difficulties with its platform and advised you to steer clear of that provider. Yet, the colleague may not know that the provider learned from those difficulties and made changes that now positions it to better serve your firm.

One example is Black Diamond Reporting (, which had its share of platform issues but has worked hard to make itself a solid choice for advisors. According to Reed Colley, CEO, "Black Diamond's mission is to transform the industry by inspiring advisors to focus on being great." He adds that his firm has documented significant savings for firms that switched from legacy software-based systems for portfolio accounting and reporting to outsourced, online solutions. "The savings are significant, ranging north of 50% per year," he says.

Marketing and communications are other functions that could be outsourced. There are many ways to get the word out (see "Getting The Word Out," May 2008), but most advisors fall short in this area because of limited time or expertise. Many outsourcers provide these services, but two stand out. Boulevard R ( is a turnkey marketing solution for advisors that is both cost-effective and results driven. Its Advisor Branded Marketing Platform (AMP) is designed to drive prospects to the advisor through multiple channels while building the local brand of the firm.  Another firm with a good reputation is Impact Communications ( Impact has made a name for itself by delivering effective marketing campaigns that use advanced advertising graphics and communication concepts to focus on an advisory firm's unique capabilities and strengths.

Only a few outsourcing solutions are mentioned above, but they are intended to serve as examples of what advisors can find in the marketplace and to help them determine how much is too much to do by themselves.

David L. Lawrence, RFC, ChFE, AIF, is a practice efficiency consultant and is president of David Lawrence and Associates (DLA), a practice-consulting firm based in Tampa, Fla. DLA publishes a monthly subscription newsletter, "The Efficient Practice," which focuses on operational efficiency. ( and hosts the Efficient Practice Advisor Network. He can be reached at [email protected].