Back-Office Outsourcing Services: Helping RIAs Reduce Inflationary Risk

A cost-cutting solution, back-office outsourcing services help wealth and asset managers fight back against inflation.

Inflation is on the rise.

Demand for goods and services is up, and supply chains are a mess. Furthermore, the labor market is the tightest it’s been in 10 years. “Knowledge-intensive” industries, including financial services, will be most affected by the labor shortage.

At some point, something’s got to give. Prices will go up.

That said, you’re not entirely helpless against inflation. Investment managers can cut costs by leveraging back-office outsourcing services providers for their operation.

How Back-Office Outsourcing Services Help RIAs Control Costs

1. The Outsourcing Services Provider Has the Means to Keep Costs Down

Because their focus is strictly investment operations, they’ve spent their time finding ways to get back-office work done more efficiently. They can automate workflows for you, too.

They have the tech and talent to get reconciliation and performance reports done faster and at a lower cost, and they pass the savings on to you.

2. Your Investment Operations Costs are Fixed (with Empaxis)

Other back-office outsourcing services providers like to charge relative to your AUM. That means your costs are not stable.

When the markets are up, you pay more, even if the workloads haven’t changed.

Sure, you pay less when the markets go down, but less revenue for the provider could hurt their bottom line. Cashflow problems may lead to staffing cuts, stretching existing employees’ capacity thin and compromising service quality.

Empaxis, however, is different. Our pricing is fixed and is customized to fit exactly for back-office services you need. After a thorough analysis of your operation, we arrive at a rate that is agreeable for both parties.

3. Pay for What's Needed, and Nothing More

With outsourcing, you’re just paying for the work you need to get done.

Compare that with in-house employees, where you pay for more than a salary.

Costs of In-House Hiring             

  • Labor
  • Benefits
  • Medical
  • Dental
  • Vision
  • 401(k)s
  • Perks
  • Bonuses
  • Vacation time
  • Sick time
  • Recruiting
  • Hiring/Onboarding
  • Training
  • Severance packages

Costs of Outsourcing

  • Labor
Download Our White Paper: Making Outsourcing Work

In-house costs are all well and good, especially if your employees are doing higher-level work that generates revenue for your firm. And by taking care of your team, they’ll reward you with their hard work and loyalty.

But if your team isn’t doing what brings the most returns, move them into roles that bring max value.

Then, offload the operations and admin work to a trusted back-office outsourcing services provider like Empaxis. Empaxis, for its part, takes care of its team members who serve you.

It’s a job-seekers market, and applicants may come in with “demands." Be that as it may, just make sure they're doing what's most beneficial for you.

4. You Have More Capacity to Generate Revenue

In addition to cost savings and paying just for what you need, outsourcing allows you more time to focus on areas that matter most:

  • Client servicing
  • Investing
  • Asset gathering

Focusing on these activities, that means making more money and mitigating the impact of inflation.

RIAs, Make the Choice to Cut Your Operations Costs

Inflation is at a 30-year high, and it isn’t going away anytime soon. It’s time to start thinking about serious cost-cutting measures. Outsourcing your back office is one of the best places to start.

Check out a few more helpful resources as you explore options:

Curious to learn more about outsourcing and if it’s right your firm? Have a brief chat with us, free of charge.

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