About 60 percent of advisors maintain their back office in-house, and cost is the least important consideration, according to a new survey by FTJ FundChoice and WealthManagement.com. Nearly 80 percent of respondents indicated that meeting compliance requirements was the top consideration when building a back-office infrastructure.
Efficiency (65 percent) and ease of use (61 percent) of the back office were other top considerations for advisors.
“Figuring out where to spend resources depends in large part on the customer experience the advisor wants to deliver,” said Cory Kendall, executive vice president of sales for FTJ FundChoice. “The advisor’s approach to operations plays a key role in the value a firm provides to its clients.”
More than a third of advisors use a mix of in-house and outside vendors to structure their back offices, with most using more than one provider.
Sixty-eight percent said they were either very satisfied or satisfied with their practice’s back-office operations. Twenty-nine percent said they were somewhat satisfied, while just 3 percent said they were not at all satisfied.
The study was based on a survey of 300 wealth management professionals.