OCIO: An Opportunity to Elevate Your Investment Experience

Financial Advisors striving to grow their firms are often bogged down by the challenges of running their businesses, including prospecting and marketing. On top of that, they’re typically providing financial and tax planning, coaching and education, and portfolio management—and they have compliance and regulatory responsibilities.

For many Advisors, trying to do all of the above is nearly impossible. Time and resources aren’t infinite. And specialized expertise is often required, especially when it comes to investments.

This is where using an outsourced Chief Investment Officer (OCIO) solution can make a real difference, freeing up your time and helping you deliver a better investment experience.

What Is an OCIO?

An OCIO provides strategic investment advice and oversees your firm’s investment management, asset allocation, and due diligence (including risk management). Acting as a fiduciary, an OCIO can free up internal resources and provide streamlined governance.

By outsourcing CIO responsibilities, your firm can leverage and optimize external expertise—without an in-house investment team. With this approach, your firm’s investment management can become more efficient and scalable.

And you can spend your valuable time focusing on the other aspects of your business—namely serving and supporting your clients.

Most importantly, the models and portfolios created for you by your OCIO will be grounded in data, research, and extensive expertise.

The Value of Focus

How much time, on average, do you spend:

  • Learning how to use software and data analytics tools?
  • Analyzing information from sources like Bloomberg, Morningstar, and YCharts?
  • Trying to understand the impact of external trends?
  • Creating custom portfolios for clients?
  • Researching managers and strategies?
  • Trying to build risk-adjusted, well-diversified models

“If you’re acting in a fiduciary capacity, spending the appropriate time on portfolio construction is necessary. Very few Advisors can both plan and manage portfolios,” explains Tom Romano, Head of Strategic Relationships and Product Development at Symmetry Partners.

Hiring a Chartered Financial Analyst (CFA) could help; however, these high-earning individuals need to be onboarded, managed, and compensated. A similar option would be hiring a full-time CIO—but bear in mind their average annual salary is around $185,000.[1]

Because they’re outsourced, OCIOs typically don’t require as much of a financial commitment—including recruiting, retaining, and providing all the up-to-date systems required for policy design, risk management, back-office operations, and performance measurement.[2]

An OCIO has access to these resources—and proficiency in using them. An OCIO also has the expertise and flexibility to create firm-level investment policies and build portfolios that meet your client’s needs.

Additionally, an OCIO can save your firm money by negotiating lower manager fees, eliminating fund-of-fund fees, and minimizing costs associated with other third-party providers[3].

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Why Outsource?

Financial Advisors aren’t the only ones to benefit from outsourcing a CIO. According to a report from research and consulting firm Cerulli Associates, approximately 25% of asset owners expect to use an OCIO in some capacity between 2023 and 2025. And the services they seek include:[4]

  • managing alternative asset classes
  • risk analytics
  • bundled plan administration
  • online portal access

In a report that surveyed more than 450 investment professionals, including institutional investors, RIAs, asset managers, and investment consultants, the key drivers of OCIO hires were:[5]

  • 75% – governance advisory and all-in fees
  • 40% – investment performance track record
  • 33% – Environmental, Social, and Governance (ESG) advisory
  • 25% – depth of alternative asset class options

Alignment

“When you’re looking for an OCIO partner it’s important to understand their investment philosophy. You have to know they understand and align with your firm’s mission and they’re providing advice through that specific lens,” explains Tom.

“Without that true north, it will be challenging for an OCIO to implement the most effective strategies. With it, there is the greatest likelihood for investors to have success,” he emphasizes.

How can you ensure the OCIO you choose to partner with has values that align with your firm? Do your research.

“Be sure to ask questions to find out if the OCIO is the right fit. Ask about their policy design approach and portfolio construction process. Find out how they’ll collaborate with your firm,” Tom encourages.

“An OCIO should be able to explain why you’re using the investments you’re using—and why you’re not using certain investments,” he adds.

How Symmetry Can Help

If you’re thinking about expanding your investment team and capabilities while controlling your costs consider partnering with Symmetry. Our focus is on providing flexible, expertly tailored white-label solutions that align with your firm’s objectives—and that you can call your own.

You can customize your offerings using many of Symmetry’s fully constructed products or platform-agnostic solutions—all supported by Symmetry’s investment research and due diligence. And your offerings can include different asset classes, geographies, and research factor exposures.

“Our team provides objective recommendations and implementation,” explains Symmetry Investment Associate Brendan Kruh. “We’ll partner with your firm to provide an investment platform and work with you to select investment products that have a methodology and investment policy associated that meets your specific needs.”

Interested in learning more about OCIO services from Symmetry Partners? Schedule a meeting today with our Investments Team.

 


Information is intended for Financial Professionals. Symmetry Partners, LLC is an investment advisory firm registered with the Securities and Exchange Commission (SEC). The firm only transacts business in states where it is properly registered or excluded or exempted from registration requirements. Registration with the SEC or any state securities authority does not imply a certain level of skill or training. No one should assume that future performance of any specific investment, investment strategy, product or non-investment-related content made reference to directly or indirectly in this material will be profitable. All data is from sources believed to be reliable but cannot be guaranteed or warranted. 

Symmetry provides this communication on this site as a matter of general information. Information contained herein, including data or statistics quoted, is from sources believed to be reliable but cannot be guaranteed or warranted. Due to various factors, including changing market conditions and/or applicable laws, the content may not be reflective of current opinions or positions. All content on this site is for educational purposes and should not be considered investment advice, recommendation, or offer of any security for sale. Symmetry Partners does not provide tax or legal advice and nothing either stated or implied in this material should be inferred as providing such advice. Symmetry Partners does not approve or endorse any third-party communications on this site and will not be liable for any such posts.

[1] Payscale https://www.payscale.com/research/US/Job=Chief_Investment_Officer_(CIO)/Salary (accessed January 30, 2024)

[2] OCIO.org https://ocio.org/why-choose-ocio (accessed January 30, 2024)

[3] OCIO.org https://ocio.org/why-choose-ocio (accessed January 30, 2024)

[4] Chief Investment Officer https://www.ai-cio.com/news/ocio-industry-set-for-strong-growth-alts-expansion (January 25, 2023)

[5] Institutional Investor https://www.institutionalinvestor.com/article/2bstnug68kijmzi7a3aww/portfolio/the-growing-ocio-industry-intensifies-market-competition-for-managers-and-consultants (January 25, 2022)

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