Originally published on ProfessionalAdviser
23rd October 2025
Growing a financial planning firm is not easy, but allocating time and resource and assessing when it is appropriate to outsource will lead to better decision-making and outcomes, writes Roderic Rennison
In my last article for PA , I talked about the importance for owners and senior managers of financial planning firms to have the data in place to effectively monitor the performance of the business.
This, combined with seeking constructive challenge, whether from within the firm, or externally, will help ensure that opportunities for growth and improvement and identified and acted on. I was planning to look at the sale process in my next article, but I have, as a result of some recent client work, realised that I should comment on the challenges of growing a financial planning firm first.
Growth in any firm needs to be managed in a controlled way and this was recently brought to life by David Jones from Dimensional, and his colleague Sarah Stacey in their presentation at the recent CISI national conference reported in Professional Adviser.
Their presentation highlighted the need for financial planning businesses to identify whether they face a growth or capacity challenge. A rush to scale without undertaking this analysis can lead to the business becoming overstretched and unstable, and in extreme cases, financial failure.
Most owners of smaller financial intermediary firms have finite amounts of time and resources, whether human or financial, so a systematic approach needs to be taken.
Much is made of the merits of outsourcing to enable the firm to focus on its core competency, financial planning, but what does this term actually mean and what are the risks?
Outsourcing is when a company hires an external, third-party organisation to complete specific services or tasks. Confusingly, some organisations offering services to financial planning firms refer to “insourcing” i.e. where the firm uses external resources rather than carrying out the work or a project internally. What is important is for any firm to be clear from the outset what its gaps and needs are before seeking external assistance and to consider whether some of the work or projects can be done in-house more cost-effectively.
The increasing adoption of artificial intelligence (AI) is supposed to help make life easier but there are now numerous options and suppliers, and making sound choices is key if both valuable time and money are not to be wasted.
There should be a rigorous process in place, and a typical sequence could be:
Any firm is likely to have a series of needs and requirements as it grows, and time and cost constraints mean that choices need to be made as to which should come first. Running multiple projects can and sometimes does lead to poor outcomes and wasted costs.
There should be a process for selection of external suppliers. This typically involves a tender process, and clearly specifying the requirements will enable meaningful comparisons to be made. The ensuing contract should be carefully reviewed to ensure that the scope is as agreed, what service levels and dispute mechanisms and timescales are in place, the timing of payments, and the termination provisions etc. If the agreement has any degree of complexity, then obtaining legal input is prudent.
Once the contract is agreed, the project starts, and it is important to ensure that sufficient time is allocated to maximise the likelihood of a good outcome. I have seen instances where because of client work pressures, there is not enough time available within the firm to work with the contractor/consultant, and this can lead to frustrations and recriminations. It is much better to defer the start of a project if there if time pressures are a possible issue.
A project may only last a few weeks, but some are ongoing and allocating responsibility within a firm for oversight is important so that the consultant has a point of contact and issues where they arise can be dealt with speedily and effectively.
Where there are ongoing contracts, there should be a formal review process. It is easy just to let existing contracts run on, and most of us will have let this happen on occasions, but maintaining a list of all external supplier contracts, and having review dates ensures that they are re-assessed periodically. Decisions can then be taken as to whether to maintain them in place or to put them out to tender or even terminate them. This will help ensure that clients are appropriately supported, and good service and outcomes are maintained, which the FCA continues to focus on.
Growing a financial planning firm is not easy, but allocating time and resource and assessing when it is appropriate to outsource will lead to better decision-making and outcomes.
In my next article, I will be looking at preparing for sale or other events such as management buyouts and employee ownership trusts and planning for what comes after. If you have any questions in the meantime, please send them to me at [email protected]
Roderic Rennison is a founding partner at Catalyst Partners