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Back Office Services for Financial Advisor Firms


Managing advisor back office operations can be a time-consuming test of your ability to juggle multiple tasks when running your own firm. In simple terms, the back end is anything you do for your business that isn’t client-facing. Implementing systems and utilizing third-party solutions can make it easier to direct your focus back to your clients while ensuring that your financial advisor business continues running smoothly behind the scenes.

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What Is a Financial Advisor Back Office?

Financial advisor operations can be divided into specific spheres or zones: front office, middle office, and back office. The front office deals directly with clients, and your main tasks typically include offering financial advice, managing client portfolios and recommending financial products or services.

The advisor back office operations encompasses the activities that allow you to perform the front office functions. That can include:

  • Accounting and managing your book of business
  • Recruiting, hiring and training new talent
  • Ensuring compliance with all applicable regulatory guidelines
  • Managing your firm’s tech stack

In essence, the back office is the backbone of your firm’s operations. How well you manage advisor back office tasks can impact your firm’s overall success.

The middle office bridges the gap between the front and back offices. Much of what happens in the middle office centers on risk management, compliance and financial reporting.

Challenges of Managing the Advisor Back Office

Advisor back office operations include managing your book of business and ensuring compliance.

Managing back office operations often requires strong problem-solving skills, as you may be presented with numerous obstacles. Some of the most common back office challenges advisors face include:

  • Inefficiency. Inefficient operations can be a stumbling block to your firm’s growth if even the simplest of tasks take longer than they should. Inefficiencies may occur as the result of poor communications, a lack of accountability, or under-utilization of automation, integration and other tech tools.
  • Data collection, quality and preservation. Collecting data from your clients is an essential part of what you do; you need information to offer advice. Problems can arise when there are no controls in the back office to ensure that the data being collected is accurate and complete. Advisors can also run into trouble if data is not being collected, verified or stored in a compliant manner.
  • Communication. Communication breakdowns can be problematic if there’s confusion among your team members about who is responsible for certain tasks, what needs to be done, and when those tasks are completed. If that leads to conflict, team morale could take a hit and your firm’s productivity may suffer.
  • Employee retention. Attracting new talent to your firm is a core function of the back office, but it’s equally important to ensure that you’re doing everything possible to retain staff and keep them engaged. That includes those working in the front, middle and back offices.
  • Compliance and reporting. Failing to meet compliance requirements can have negative consequences for your firm, including potential damage to your brand reputation as well as fines or other penalties. The back office needs to be up to date on the latest regulations and have access to tools that can help meet compliance requirements efficiently.

Financial Advisor Back Office Solutions

Outsourcing back office responsibilities can free up more time that you can devote to serving your clients. Numerous platforms offer back office solutions for financial advisors; some are stand-alone services while others are comprehensive solutions.

Here are some of the ways you may be able to leverage third-party service providers to simplify the back office.

  • Operations and admin. Back office solutions providers can handle administrative and operations tasks including billing and reporting, trade settlement verification, bookkeeping and payroll, new client onboarding and client support. They can also assist with business development and marketing activities to help you scale and increase revenues. SmartAsset AMP, for instance, offers a holistic solution for managing marketing and lead generation on the back end so you can focus on serving your clients.
  • IT services. Information technology support can span a variety of activities from network management and technical user support to disaster recovery planning. Back office service providers may offer recommendations for choosing tech tools, assist you with their implementation and ensure that your team is trained to use them. They can also provide data conversion services if you need help with converting substantial amounts of data into different formats.
  • Accounting and reporting. Good accounting practices and regular reporting are both essential for managing your firm’s financial health. Some of the tasks you may choose to outsource include reconciliation and report generation at the advisor or firm level, reviews of closed accounts, fee comparisons, audits and backups of financial data.
  • Compliance. If you operate as a registered investment advisor (RIA), your chief compliance officer (CCO) may be charged with handling compliance-related tasks. A back office solutions provider may provide administrative support services to your CCO and ensure that all necessary compliance tasks are scheduled accordingly.

If you’re searching for a third-party service to outsource back end duties to, consider the range of services included and the fees you’ll pay. Also, consider how seamlessly those third-party solutions may integrate with your current tech tools or artificial intelligence (AI) solutions you might be using.

You may want to begin your search with your RIA custodian, as some custodians offer in-house solutions to client firms at a discounted rate. You could also ask other advisors in your network if they use any back office service providers and, if so, which ones they’d recommend.

Frequently Asked Questions (FAQs)

What Does Back Office Mean in Finance?

The back office represents the operation segment of a business that is not client-facing. In financial services, the back office may be responsible for performing administrative tasks along with bookkeeping, new client onboarding, scheduling and financial reporting.

What Is the Job of an Advisor’s Back Office?

The primary job of a financial advisor’s back office is supporting the front office. When the back office operates without any hiccups, it becomes easier for advisors to focus on serving the financial planning needs of their clients.

What Are the Benefits of Outsourcing Back Office Tasks?

Outsourcing back office tasks can benefit your advisory business if you’re able to save time and money, eliminate inefficiencies and provide a better user experience for your clients. Improving communication and engagement in the back office may also encourage higher employee retention rates and reduce turnover.

Bottom Line

By improving back end services, an advisor is able to provide more benefits for their clients.

Your back office serves a key role in your firm’s operations. The more improvements you make on your advisor back end services, the more benefits you and your clients can reap in the long term.   

Tips for Growing Your Advisory Business

  • Increasing your digital footprint can help you attract new clients to your business, but it may take some trial and error to find a marketing strategy that works. You can simplify things by utilizing an automated marketing platform that’s designed with financial advisors in mind. If you don’t have a lot of time to actively spend on marketing, you might consider using an online marketing service that brings leads to you. SmartAsset AMP (Advisor Marketing Platform) is our holistic marketing service financial advisors can use for client lead generation and automated marketing. Sign up for a free demo to explore how SmartAsset AMP can help you expand your practice’s marketing operation. Get started today.
  • Deciding which advisor back end tasks to outsource means identifying your firm’s biggest pain points. For some advisors, that may be bookkeeping and payroll; for others, it’s compliance. Polling your team members and having clients complete a satisfaction survey can shed some light on what may be working in the back office and what’s holding your business back.

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