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The cost of outsourcing should not be the only factor to think about when considering whether to outsource.

 

I believe the focus should be on you the financial advisor and how much value it can add to your business. Whilst, price is an important factor it is not necessarily all about how much you can save but how much your business can grow, consider the following first

 

• How much time do you currently spend on Admin tasks?

• Should you be using your time in this way?

• The value of your time as a Financial Advisor

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I believe the above are important key questions and should be considered first when looking at outsourcing admin. As an example, say your goal is to make £200,000 a year as an advisor the value of your time is £100 per hour ( based on a 40 hour week for 50 weeks of the year) so any admin task you do is costing your business £100 per hour . Off-loading as much admin as possible will therefore increase your productivity.

 

How I believe Outsourcing adds value

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I believe that by outsourcing you are accessing an experienced focused Administrator for whom you only pay for the actual hours worked as and when you need. Outsourced Administrators are usually very experienced and focused individuals, their prime aim is to add value and take away the admin tasks so you can concentrate on growing your business.

  

Once you have established the value of your time and how much of it you spend on Admin tasks the next point to consider is outsourcing over employing and the value that each option brings to your business. It is important that you calculate the true cost to your business of employing an administrator as it is not just their salary, employer national insurance, holiday pay, sick pay and pension provision all need to be taken into account as well.

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Typically an experienced administrator’s salary will be about £27,000 DOE once other costs have been added on the actual cost to the business is more in the region of about £32,140 ( £15.45 based on a 40 hour week with I hr for lunch paid for 52 weeks). Already you can see that getting an administrator to do your admin tasks is more profitable to your business since it is effectively a saving of £84.55 per hour.  Add on training costs as well.

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Assuming the hourly rate is £15.00 for an outsourced Administrator the cost based on a 35 hour week, no paid lunch for 52 weeks is £27,300. However, it is highly likely that the outsourced Administrator will need to take a month’s holiday per year so the actual cost reduces to £25,200 giving an added value to your business of £6,940 pa.