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Why are advisers turning to outsourced administration services?

We talked to Debbie Condon, director of Intuitive Support Services about how the market is developing and how adviser firms are using the services

Debbie Condon started her outsourced administration business in 2013 and employed her first member of staff in 2014. Now she has eight administrators working across a range of advisory and paraplanning firms.

We asked her about the growth in the market, why advisers are tending to use the services and how it works in practice.

Adviser Business Review: How has the market for outsourced admin services changed since you established in 2013?

Debbie Condon: In 2013 few people knew it was an option, and some enquiries were simply people who were curious about how it could work. We now work with advisers who are proud to talk about which elements of their business they outsource, and who they outsource to. Word is getting around that administration support can be outsourced as effectively any other part of an adviser’s business.

ABR: Typically, why are advisers outsourcing? What are the benefits for their business?

DC: We keep hearing how hard it is to recruit and retain good administrators. Some advisers don’t want the hassle of being an employer, and the thought of dealing with employment contracts, holiday pay, pension contributions and payroll is off-putting. Furthermore, some advisers work from home, so they don’t have office space where an administrator could be based. If an adviser only needs 10 hours of support a week, it’s hard to find an experienced administrator with the right experience who only wants to work those hours, and who wants to work from their own premises.

We can offer advisers access to experienced support without the expense or hassle of employing someone themselves. Also, because we operate on a Pay-as-You-Go basis, if they only need support for a few hours a week, that’s all they’ll need to pay for.

ABR: Does it tend to be a certain size or type of business that outsources?

DC: Around 85% of our advisers have three or less employees, and many already have experience outsourcing other elements of their business, such as Paraplanning, IT and Compliance support. Some work for national firms, where they don’t receive admin support within their organisation, and we also support some medium-sized firms who need help with overflow. We also support paraplanning firms who need assistance with data gathering.

Generally we work with advisers who require support on a regular ongoing basis, and whilst we may occasionally take on project work, it isn’t a core part of our business. Whilst there isn’t a minimum usage requirement, we tend to work with advisers that need at least five hours of support each week.

ABR: If advisers have not outsourced before does it take a while to adjust to working remotely with someone?

DC: Any change of process or procedure needs consideration and planning. A new administrator/adviser relationship takes time to form, regardless of whether sitting in your office or elsewhere, and both people need to learn about the other person’s work background, strengths, weaknesses and preferences. If you had an administrator sitting in an office down the hallway, it’s unlikely that you would walk over to them every time you needed to pass them work, and working remotely should be no different. Good communication on both side is really important, but that’s no different to any adviser/administrator relationship.

ABR: What do you find is the best working set up if advisers are to make the most efficient use of an outsourced service like your own?

DC: No two firms that we work with are the same. They all have different structure, business area, client type, IT systems, processes, meeting requirements, etc. It’s our job to learn about them and their preferences, and adapt the support that we provide to suit their needs.

The main foundation for a good adviser/administrator relationship is always trust. When an adviser starts to hand over work, and they see that the administrator is capable, diligent and trust worthy – we often see an increase in how much they are delegating.

ABR: Online security is a key issue for firms these days – what security measures and safeguards does an outsourced operation need to have in place?

DC: Whilst we’re not regulated by the FCA, we directly support firms who are, and therefore we take the FCA principles with regards to Data Security very seriously indeed. The FCA makes it clear that a firm cannot outsource its regulatory obligations and that regulatory responsibility for any material outsourced function remains with the regulated firm. That’s why we look to provide reassurance around how we’ll handle client data, and help firms adhere to the FCA Rules.

We have a detailed due diligence document, and our Data Security & Secure Desk Policy covers various areas, including:

• Authentication of Email Addresses

• Authentication of Caller

• Secure desk policy

• Electronic Storage Devices

• Personal Computers, Laptops and Personal Digital Assistants (PDAs)

• Printers, Photocopiers and Fax Machines

• Fax security

• Electronic Storage Devices

• Confidential Waste

We’re registered with the Information Commissioner’s Office for Data Protection, and we’re in the process of reviewing what action we need to take in preparation for the introduction of the General Data Protection Regulation (GDPR) which we expect to come into force in mid-2018. The General Data Protection Regulation is a Regulation in the making by which the European Commission intends to strengthen and unify data protection for individuals within the European Union (EU).

We have detailed company policies documenting our standards and should staff not adhere to these standards, this could be considered a disciplinary matter. All staff undertake training on Anti-Money Laundering & Data Protection and we send the training certificates to our adviser clients.

We operate with electronic files only, and we do not maintain paper files or records. Files are held on either on own secure remote server provided by Managed Networks, which is backed up daily, or on adviser clients’ own servers.

In terms of internal controls, staff can only access data that is essential in carrying out their role, and cannot access data for advisers whom they do not support. Access rights are fully disabled/changed if they leave or change their role within the firm, and staff are required to change their passwords once allocated, and on a regular basis thereafter. We also have a company policy on password strength. Staff are required to authenticate the identity of customers who contact them by telephone or by email, and we have a documented procedure in place relating to this. We also operate a clear desk policy, and have documented processes in place with regards to confidential waste.

ABR: If an adviser firm was considering outsourcing but was still unsure, what would you say to them to convince them to take up the service?

DC: Employing someone is a timely and expensive process, and employment contracts are legally binding. Compare this to outsourcing, where we operate on a Pay-as-You-Go basis, don’t tie advisers to minimum usage, or ask them to buy hours in advance. We’re proud to say that our advisers stay with us because they want to work with us, not because they are tied in. We are able to offer advisers access to long-term experienced support, without making a long-term commitment.

Visit the Intuitive Support Services website

 

 

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