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Should you be outsourcing your back-office administration?

Outsourcing of back-office administration by adviser firms is on the increase. Rob Kingsbury talked to Debbie Condon, director of Intuitive Support Services, about how the firm operates, as an insight into how outsourcing of this part of an adviser business works in practice

Debbie Condon incorporated her outsourced support service for financial advisers in May 2014, when she was working on her own providing the service to three clients. Just over a year on and she employs five administrators serving 20 clients and she is looking for her sixth member of staff as demand keeps on growing, she says.

Yet, she adds, growth is still “on a slow burn” as it can take a while for advisers to realise the benefits of outsourcing their administration and personal assistant roles, both of which are provided by Intuitive, and to start to outsource.

Condon says: “At the moment I think many advisers aren’t aware that outsourcing their administration is an option – but we find once word gets around then it does generate interest. What we’re seeing is that with advances in technology, increased connectivity speeds and cloud services, for example, advisers are realising they don’t necessarily need an office, they can work from anywhere and by using outsourced administration support they can run their business efficiently and cost effectively and reduce their overheads.”

Intuitive’s client bank largely is made up of three types of adviser firm:

• Small, directly authorised, one or two man firms;

• Advisers in networks that offer no administrative support and where the adviser tends to work from home;

• Larger advisory firms, where Intuitive provides overflow support and integrates as part of the firm’s team.

The majority of the work Intuitive undertakes is on an ongoing basis.

Intuitive works with the adviser firm to offer the type of service it needs, Condon says, offering a range of support from full admin and personal assistant roles, through to an overflow service. “Some advisers want us to refer to ourselves as their office manager while others want us to pick up on certain parts of their work. Some may want us for an hour a day others for three hours or more,” she says. “The majority of the firms we work for want us to provide full PA and admin support.”

The service is Pay-As-You-Go, so advisers are charged only for the time that they use the service and for postage costs. Typically, everything else is included in the hourly rate, Condon says.

“We can save advisers not just the time, resource and and cost of recruiting and employing – paying tax and NI, sick pay, office space and furniture, PC and IT – but also time managing staff, a part of a business that cannot be underestimated. By outsourcing, advisers have someone there when they need them and they only pay for the service they use.

“Also, we set the benchmark very high when we recruit. We want people with experience of the industry. It can make it difficult to get the right people but we want to be able to provide the best.”

Dedicated support

Each administrator is dedicated to their adviser firms, which means they get to know the adviser they work with and how they like to operate. Condon then provides roving support to the team using her own knowledge of the industry built up over 23 years in administrative, operational and management roles.

Condon says Intuitive dedicates staff to individual adviser firms rather than using a pooled system primarily because every adviser likes to work in a different way and the administrators need to build up a rapport with the adviser and to work in the way the adviser prefers.

“Advisers have completely different types of client banks, they use different systems and have different processes and procedures. By dedicating an administrator to an adviser firm they can adapt and bespoke the support they provide to that adviser’s requirements. It would be very difficult to do that if we had a pool of people providing the support.

“Probably the biggest learning curve for an administrator, bearing in mind they are already experienced in the industry, is finding out how the adviser likes to work and the type of support they need.”

Normally advisers will set up an email address for the administrator on their domain name and a log in to their system, which might be a web based back-office or a system such as Dropbox or iDrive for file sharing, while others use remote desktop systems accessed through their servers, says Condon.

Advisers also provide a user ID to access their platforms and product provider websites. “This is in exactly the same way as they would if we were an employee of their firm. We would register in the same way,” says Condon.

Security

This brings us to the question of security and data protection. Condon says that she and the individual administrator are the only people who have access to the adviser’s systems, for security reasons.

Intuitive’s company standards, rules and procedures are clearly set down and staff must adhere to them at all times, Condon says. The firm has a comprehensive due diligence document that details the policies and procedures which Intuitive’s staff must work to, in particular around client confidentiality, and which is sent to advisers.

“All our staff undertake data protection training and testing when they first join and on an annual basis. They also undertake annual anti-money laundering training as well.

“Everything an individual administrator does is saved to the adviser firm’s system or to Intuitive’s secure server, nothing is saved to an individual’s PC or laptop,” Condon stresses. “And an individual’s access to all systems can be closed down at the press of a button.”

Initial approach

Prospective clients first have a telephone meeting with Condon so she can ascertain more about the company, their type of business, the kind of support they are looking for and the level of support they will need on a weekly basis. “We realise the level of support needed may fluctuate but it allows us to ensure we allocate an administrator with the right knowledge and sufficient resource to cover that work. The adviser is not committed to using us a set number of hours but it means we have the resource in place.”

Condon will then send out the due diligence document, a profile of the allocated administrator with details of their experience, and terms and conditions of service for the adviser to sign and return. If the adviser wants to go ahead a start date will be decided. “If we can we like to set up the systems in advance of the start date so that we are ready to go from day one. On the first day the administrator will get in touch to introduce themselves and talk through the work. We don’t usually charge for the first few hours in which we are setting up the service so the adviser is paying straight away for the administrative work we are doing.”

Condon says Intuitive can take on clients anywhere, with one adviser client with a UK client base living nine months of the year in Australia. “We do encourage where possible that the administrators meet the advisers they will be working with, as we feel it helps to build the relationship but it’s not a requirement and sometimes the geographical logistics preclude it. But we are always at the end of an email or the telephone,” Condon says.

Demand taking off

Condon believes that just as outsourced paraplanning has begun to take off in a big way, outsourced administration will not be far behind it.

“There is a shift in where people work because technology means they can be anywhere and still access their systems. That is making people aware of the fact that they maybe don’t need an office or don’t need as big an office, which in turn is opening their eyes to the possibilities and benefits of outsourcing.

“Likewise, they are realising that recruiting someone to do their administration is not the only option. You don’t need someone physically there – it’s viable and can be more cost effective to work with someone remotely.

“People are looking more closely at what they do and the costs of doing it and if they already outsource their compliance, discretionary fund management or paraplanning, it can makes sense to outsource their PA and administrative support as well. It saves the cost of hiring and employing someone, with all the costs of employment, including auto enrolment which at most is two years away for most small companies.”

Visit Intuitive Support Services website

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