When Jason Cutrupi built an outsourcing model to support his AFSL, he didn't imagine that this would eventually turn into a successful business in its own right. With more than 20 years' experience in the financial planning sector, Jason's vision enabled him to identify a gap in the market, creating a service for advisers wanting to outsource their paraplanning and administration. Jason shares his thoughts on how the advice industry has changed and future opportunities for the sector.
How did Atlas Outsourcing come about?
I ran my AFSL for around 17 years, up until 2019. While I was building this business, I also identified a gap in the market. I found that, as a smaller AFSL, I could only have so many resources to support the business. When one person would leave, there would be a period that we were less productive as I needed to recruit and train the replacement, and because of the technical nature of the job, it was quite an investment to have them trained to the level we needed. To help bridge that gap, I built a team offshore that meant that I could have continuity of resources, with many people available that were trained and understood the role they had to do.
Outsourcing is about business continuity
When it comes to outsourcing, that's one of the things to remember. It's not necessarily about saving the dollar (though there may be some savings there). For me, it has always been about business continuity; if people left, I didn't need to retrain and do a whole lot of other things to get people up to speed. Instead, I was able to rely on others that already had the background and training, so there was no impact on my clients' experience.
I built the business with my business partner to support my AFSL. And when we had the outsourced support team running smoothly, I realised that this was a service we could offer to other advisers moving forward.
What have been the significant changes you have seen impacting the financial planning industry?
One of the most significant changes has been on the compliance side of things. When I initially started, compliance was not that onerous, and it was relatively easy to manage in the background. But, over time, compliance obligations continued to grow, requiring more of my time and taking me away from what I wanted to be doing, which was spending time with clients.
I also think that technology has come a long way since I started, enabling you to put more processes in place. But technology is also a double-edged sword. To get technology to the way you want takes time. Technology's great, but the myth about plugging it in and everything working is all a myth. You need to build it. There's also an integration piece you need to manage with your legacy systems, and then if something with more potential comes along, you have to work out how you can integrate that too.
What are your thoughts on the future of outsourcing?
Outsourcing in the financial planning sector has increased significantly. I think accountants were the pioneers of outsourcing; they've done it for many years. As the admin beast continues to grow with financial services, for example with increasing compliance requirement, and the need to build the backend systems to support the changes, I think financial planners are beginning to embrace outsourcing opportunities.
You can't outsource the client relationship
When it comes to outsourcing for financial planners, the only area you can't outsource is the client relationship - spending time with the client and providing them advice. The rest of it is an administration function to some degree.
For people considering outsourcing, what are some of the questions they should be asking potential partners?
An adviser needs to sit down and decide what they want and what they don't want to do. They can then look at that list and determine what they can outsource. As part of this process, it's essential to decide on what your strengths and weaknesses are. And when you know what your weaknesses are, you can outsource them.
Choosing outsource partners can be difficult, but if you're with a licensee, discuss with the licensee your desire to outsource as they may already have recommended providers. You can also talk to other advisers to see who they use.
Doing your research is important
I think doing your research is very important. You want to ensure that your provider ticks off on all your values and requirements. Just because one adviser uses someone, it doesn't mean that provider will work for you.
When you are looking at outsourcing partners, it's essential to look at their track record. How long they've been doing this? Do they have all the right insurances in place? Who is the management team of the provider? What are their backgrounds?
Another area to look into is the governance aspect, which is very important. Look for things like whether they have compliance certifications in place, like ISO 27001 and data security protocols.
And what are your tips for maintaining successful partnerships with outsourcing providers?
Like any business relationship, the critical thing is to communicate with them often. Think of them as a part of your business and keep those communication lines open. Ensure that your communication with your outsourced provider is unambiguous and concise. As advisers, we can tend to be a little bit vague and assume that people understand what you're talking about, so make sure that they know your requirements so they can deliver to those in the way you want.
It's also vital that you listen to the outsource provider's feedback because they may see something that you don't; they have the advantage of looking at things with fresh eyes. They may see some of your processes that may need a bit of tweaking, and they can be vital to helping you with that.
Finally, how do you see the financial advice landscape changing in the future?
We've seen that the demand for advice has not declined, it's only become more robust. So, I think there are enormous opportunities there. With advisers getting more transparent on the cost to serve, I believe that client demographics will change. Part of that is because there is greater accountability on the advice that's provided.