Growing demand for outsourced admin services 2021
Richard Allum, managing Director of The Paraplanners paraplanning company, said that there is a growing demand for their outsourced administration services.
Allum says that the firm created the administration capability in order to support its paraplanners, and it began offering the service to clients of the outsourced paraplanning Outsource admin services three years ago. As an outsourced service, adviser firms are increasingly requesting it.
Allum said, “We are now working closely with twice as many firms as we were one year ago, providing a purely administrative service.” Allum acknowledges these are small numbers compared to paraplanning services provided by larger firms. However, he believes that they will grow. The outsourcing concept is more common than ever. Many firms outsource their fund management, compliance and accounting. Why would they not?Harrison states that the firm also experienced a “phase where there was a lot demand for administration”.
She expects to see this trend continue as more advisers become more comfortable with outsourcing. She states that once an advisor is comfortable with outsourcing one aspect of their business, then they will look to outsource the rest. One firm managing paraplanning and administration can be a good idea as it allows for better communication and consistency. Technology is constantly improving and outsourcing will become more popular. Outsourced admin services are certain to be a benefit.
Allum claims that advisers can easily be drawn into daily administrative tasks. This includes time spent using back office platforms and platforms, or waiting on the phone for provider support. Allum and his colleagues refer to this as “being lulled into involuntary administrative”. Allum states, “The answer is outsourcing.”
Allum said that the majority of firms outsourcing administration services are small, with just one or two advisers. This means that they end up managing the admin and losing their primary job of seeing clients. Oder they hire someone who isn’t being used enough.
Allum explains that by outsourcing to a professional company, you know you’re getting qualified, experienced staff who are familiar with the inner workings of adviser administration. Because they are experts in the back-office processes, platforms and procedures, you can get people you would not be able to find if you tried to hire them yourself.
“A good administrator can be worth their weight in silver. They are an essential part of the company’s team. “Our business would not function as well without good administrators,” Allum said.
Paraplanners charge an hourly fee of PS30/hour. Allum explained that this means advisers only pay for what they use. Outsourcing is very cost-effective because it’s simple to set up and you only use it when it’s needed.