Providers
Ask what the client sees, and whose name is on it.
If a third party manages the portfolios and reports on them, what stops them becoming the relationship? The answer is structural, not reassuring.
Every advisor considering outsourcing asks some version of this, and usually not out loud. If a third party manages the portfolios, reports on them, and appears anywhere near the client, what stops them from becoming the relationship?
It is a reasonable question and it has a structural answer rather than a reassuring one.
Whose agreement the client signs. The advisory agreement, the fiduciary relationship, and the discretion sit with your firm or they do not. This is not a matter of goodwill; it is documented, and you should read the documents.
Who the client can reach. If the client's route to answers runs through you, you are the relationship. If the provider offers the client a direct channel, that is a different arrangement and you should know you are entering it.
Whose name is on what the client sees. Statements, reports, portals, review materials. A provider that puts its brand in front of your client has made a choice about whose relationship it is.
A provider that also serves clients directly, or that owns advisory firms, has an interest in your clients that a provider serving only advisors does not. This does not make them dishonest. It makes the incentive different, and you are entitled to ask about it plainly.
Non-solicitation of your clients. Clarity on who may contact them and in what circumstances. What happens to client data if the relationship ends, and confirmation that it leaves with you.
Firms rarely negotiate these terms and almost always could.
Outsourcing the work does not outsource the relationship, but neglecting the relationship will end it regardless of who manages the money. The advisors who lose clients after outsourcing generally lost them by disappearing — the freed-up time went somewhere other than the client.
The point of handing off the work is to spend the recovered hours in front of people. Firms that do that keep every client. Firms that do not were going to have a problem either way.
What to hand off and what to keep →
Questions this did not answer? Ask them directly — that is what the twenty minutes is for.
Schedule a call to see for yourself