What is an Outsourced CIO and How to Hire One?

As businesses continue to search for cost-effective and efficient solutions, outsourcing has emerged as a key strategy for delegating critical business functions. One of the more recent trends in this realm is the rising popularity of outsourced Chief Investment Officers (OCIOs).

The global assets under advisement for OCIOs were valued at $2.46 trillion in 2021 and are projected to grow at a rate of 69%, reaching $4.15 trillion by 2026. Given this trajectory, many companies are seizing the opportunity to capitalize on this booming market and benefit from the expertise of institutional investors.

What Is an Outsourced CIO?

An outsourced CIO is a third-party chief investment officer or investment committee to whom a company delegates its investment programs. Because of the provider’s investment management expertise, companies use them to help with strategic asset allocation, manage risks, and monitor performance.

An outsourced CIO can offer different levels of outsourcing, depending on the client’s needs and preferences. Some clients may choose to outsource their entire investment function, while others may opt for a partial or collaborative outsourcing model, where they retain some control and input over the investment decisions.

An outsourced CIO can work with different types of organizations, such as:

• Medium to large companies. 
• Accounting firms. 
• Private and family foundations
• Charitable organizations and other not-for-profits
• Family offices and associates

How Can an Outsourced CIO Benefit Your Business?

Given the evolving complexities of financial markets and the need for specialized knowledge in managing investment portfolios, the benefits of having an outsourced CIO have become increasingly apparent.

• Saving time and resources: By delegating the investment tasks to an outsourced CIO, you can free up your staff and board members to focus on other strategic priorities, such as development, impact measurement, and governance. You can also reduce the administrative burden and costs associated with managing your own investment portfolio.
• Accessing expertise and experience: An outsourced CIO can provide you with access to a team of professionals who have deep knowledge and experience in the investment industry. They can help you design a customized portfolio that aligns with your goals, risk tolerance, and liquidity needs. They can also leverage their network and platform to source and select top-tier investment managers, as well as capitalize on market opportunities and trends.
• Enhancing risk management: An outsourced CIO can help you manage the various risks that may affect your investment performance, such as market volatility, inflation, interest rate changes, currency fluctuations, and regulatory changes. They can employ a robust risk management system that includes portfolio stress testing, risk modeling and monitoring, and liability modeling. They can also help you implement sustainable investment practices that align with your values and mission
• Improving performance and transparency: An outsourced CIO can help you achieve your desired return objectives while maintaining a diversified portfolio across asset classes. They can also provide you with comprehensive reports and support that include monthly statements, performance analysis, real-time data, education, and thought leadership. They can also advise you on best practices and industry standards for your organization7

With these advantages, it's no surprise that many companies, including those in the accounting and finance sectors, are opting for outsourced CIO services. The practice not only addresses the challenges related to investment management but also contributes to overall business success.

How to Choose the Right Outsourced CIO for Your Business?

If you are considering outsourcing your investment function, you should look for an outsourced CIO that meets the following criteria:

• Compatible with your culture and vision: You should look for an outsourced CIO that understands your organization’s mission, values, and goals, and can tailor their services accordingly. You should also look for an outsourced CIO that has a similar communication style and frequency as yours, and can build a trusting and collaborative relationship with you.
• Flexible and adaptable: Outsourced CIO can offer you different levels of outsourcing depending on your needs and preferences. You should also look for one that can adjust their strategy and portfolio according to changing market conditions and your feedback.
• Transparent and accountable: You should look for an outsourced CIO that provides you with clear and detailed information about their fees, processes, performance, risks, managers, and investments. You should also look for an outsourced CIO that follows ethical standards and complies with relevant regulations.
• Experienced and reputable: You should look for an outsourced CIO that has a proven track record of delivering successful outcomes for clients similar to yours. You should also look for an outsourced CIO that has positive reviews and testimonials from their current and past clients.

Harnessing the Power of Accounting Virtual Recruiting

Outsourcing the investment function to a third-party chief investment officer or investment committee can be a smart move for many accounting and finance firms. It can help them save time and resources, access expertise and experience, enhance risk management, improve performance and transparency, among other benefits.

However, not all outsourced CIOs are created equal. You should do your due diligence and research before choosing the right outsourced CIO for your business. You should also consider using accounting virtual recruiting services to help you find and hire the best talent for your accounting and finance needs. Accounting virtual recruiting is a process of finding, screening, and hiring accounting and finance professionals online, using platforms like Upwork, FlexJobs, and LinkedIn8

Accounting virtual recruiting can offer you many advantages, such as:

Expanding your talent pool

By using accounting virtual recruiting, you can access a larger and more diverse pool of candidates from different locations, backgrounds, and skill sets. You can also find candidates who are looking for remote or flexible work arrangements, which can increase your retention and satisfaction rates.

Reducing your hiring costs

By using accounting virtual recruiting, you can reduce the costs associated with traditional hiring methods, such as advertising, travel, relocation, and overhead. You can also save time and resources by using online tools and platforms to streamline and automate your hiring process.

Improving your hiring quality

By using accounting virtual recruiting, you can improve the quality of your hires by using data-driven and objective methods to evaluate and compare candidates. You can also use online tests, assessments, and interviews to measure candidates’ skills, knowledge, and fit for your organization.

Key Considerations When Using Accounting Virtual Recruiting

While accounting virtual recruiting offers numerous advantages, it’s important to approach it thoughtfully to maximize its benefits. Here are some key considerations:

• Define Your Needs: Clearly outline the responsibilities and qualifications for the outsourced CIO position. This will not only help you in your search but will also set clear expectations for potential candidates.
• Choose the Right Platform: There are many digital platforms for virtual recruiting, but they're not all created equal. Select a platform that caters to your specific needs, whether it's a general recruitment site or one that specializes in finance and accounting professionals.
• Take Advantage of Technology: Use technology to streamline the recruitment process, from applicant tracking systems to video conferencing tools for interviews. Technology can make the process more efficient and provide a better experience for both you and the candidates.
• Consider Cultural Fit: Although skills and experience are critical, don’t overlook the importance of cultural fit. The outsourced CIO will be working closely with your team, so it's vital that they share your company’s values and work style.