Outsourcing peripheral tasks lets advisers focus on growth, clients

When David Marotta started his advisory practice in 2000, he was tempted to get involved with the design of its website and the deployment of software and computer resources for the office. After all, he has been a computer scientist before becoming an investment adviser. “It’s what I used to do for a living and I still think of myself as a software engineer,” said Mr. Marotta, who runs Marotta Wealth Management Inc. in Charlottesville, Va.

But he hired someone outside the firm to do the website design. He also eventually found someone to handle the payroll. And he left the performance reporting and billing to his wife, Krisan, who runs her own business doing performance reporting for investment managers.

The most important thing that enabled Mr. Marotta to build his business — he now has 170 clients and more than $200 million in assets under management — was his willingness to outsource functions peripheral to the investment management and financial planning he does for clients. “It has allowed me to focus on building my practice and on servicing clients,” he said. “You can’t outsource those kinds of things.”

Like most entrepreneurs, his instinct was originally to do more himself in order to save money. He said he soon realized that the more he tried to do on his own, the less he accomplished in terms of expanding his business.

“Penny-wise and pound-foolish,” Mr. Marotta said. “I think it’s a mistake many financial advisers make. They don’t want to spend money, but they fail to realize the opportunity cost of doing more things themselves, and not focusing on building their firm.”

While he has outsourced as many operational functions as he can, and delegated much of the rest to his support staff of three employees, he has kept software integration in-house. He has also created accessible profiles for all his clients to make sure that he and the three other advisers who now work with him remain attuned to what clients need. The profiles include the goals and aspirations of each client and specific planning and investment actions to be taken on their behalf.

“If a client says they want to do a Roth IRA conversion, our system kicks out all the next steps required to do it,” he explained. “It’s an online to-do system linked to our portfolio center database that really streamlines work flow.”

E-mail Andrew Osterland at [email protected].

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