"The reality is that advisors outsource a lot. Advisors using mutual funds, SMAs or ETFs outsource…"

Sunday, March 4th, 2012 at 5:00 pm

“The reality is that advisors outsource a lot. Advisors using mutual funds, SMAs or ETFs outsource the investment management function, even if they determine the asset allocation. Investment managers investing directly in stocks and bonds often outsource much of the research that informs those decisions. Advisors utilizing a custodian or broker-dealer outsource many of their middle- and back-office functions and delegate the safe holding of securities to another entity. RIA firms regularly and systematically outsource many of the processes related to compliance, though, in the end, they are accountable for the activities of their firm and for adhering to regulatory requirements.”

Turning Inside Out