Finding Your Virtual Assistant As A Financial Advisor

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#OfficeHours with @MichaelKitces Video Transcript

Well, welcome everyone! Welcome to Office Hours with Michael Kitces!

For the topic this week, I wanted to field a question I'm hearing more and more often. It came in most recently from Brandon, who asked:

"I'm thinking about hiring a virtual assistant, but how do I find one in my time zone, or does that even matter?"

I'm hearing more interest in virtual assistants. The cool thing is that they don't have to be geographically located where you are, they can be anywhere that they want to be. And then, of course, the challenge is they don't have to be where you are, they can be anywhere they want to be. A whole lot of dynamics change when it comes to working effectively with a virtual assistant.

So I wanted to talk about this, because I live it myself. I built a large portion of my business off of virtual assistance, and I'm supported by a wide array of part-time people, each of whom have their own specialized function. So I've got a virtual web developer, he's 150 miles away. I've never met him in person. My full-time executive assistant is 600 miles away in Chicago. My graphic designer is 800 miles away in Kansas. My marketing assistant is 1,200 miles away in Texas. Spanning a lot of the country and multiple time zones.

Virtues of a Virtual Assistant: Start With Delegating

It's certainly been transformative for me to be able to find good people that I can delegate to, to give specific tasks, and know it will get done. It lets me leverage my time. Frankly, it's taught me to get better at delegating. Some of you may have seen the article I wrote in the past about how I got better at delegating using screencasting software to capture what I do and then delegate it to someone and never do it again. For me, it started with bookkeeping, some client agreements and contracts and such. And then it expanded over time, to the depth of the virtual team that I've got today.

As advisors, we have lots of opportunities to leverage virtual assistants and help in the business. It can be anything from outsourcing operational tasks, such as downloads and reconciliation of your portfolio accounting software, or preparing reports (at least digital ones, obviously not physical print-out reports!). Other tasks could include handling client agreements, making sure meetings are getting scheduled, and that follow-up is happening when it's supposed to on administrative tasks. Even things like preparing financial plans, outsourcing your bookkeeping and accounting for the business, or outsourcing some support on blogging, social media and marketing activities.

In advisory firms, the reality is that most of what we do can be virtual. We're knowledge workers. We interact with clients and contribute intellectual value, not physical stuff. We're not making things, we're not making widgets. There's almost nothing that actually has to be done physically in person in an advisory firm to support an advisory firm. It can all be outsourced out.

Time Zones Do Matter...A Little...

But this does raise practical questions, like "do time zones matter" and does the location of the virtual assistant actually matter?

As someone that's lived this, I have to admit, I think it matters a little. At one point, I did some virtual work where I actually outsourced it overseas. There's a lot of virtual assistant companies out of southeast Asia that are extremely inexpensive, so you get a lot of bang for the buck.

But it didn't work well for me. The halfway-around-the-world thing means there's almost no contemporaneous communication. No way to go back and forth in real time. You send a message before going to sleep, they work on it while you asleep, you wake up in the morning, there it is. All right, well, that's fine if it was a specific item that's done. But if there's back and forth edits, then you have to respond to something, then wait another day for them to get into it. I didn't like the halfway-around-the-world virtual experience.

But I've found that time zones differences within the U.S. are negligible. Most of my team is actually not East Coast time, they're either Central time or Mountain time. And I've had almost no issue with that dynamic in particular. Because the truth is, you don't always need to be in constant contact. You need some chunk of time when you overlap with your virtual assistant so you can delegate tasks and give feedback on prior tasks coming back to you. But you're not going to be with them continuously. In reality, even the staff that's physically in your office, you may only see them an hour or two here or there through the day, because the rest of the time you're in client meetings or doing other stuff. So it wouldn't really matter if they were there much, anyway!

But again, while you don't need a virtual assistant perfectly time-aligned with you all day every day, but you do need some reasonable overlap of time. I think almost anything in the U.S. is pretty feasible. When you start crossing oceans and you start shifting five-plus time zones at a time, it gets a little bit harder. Having tried both, I do now lean U.S.-based for that reason, even though U.S.-based is going to be more expensive than outsourcing to some other countries where the labor is cheaper.

Where Do You Find A Virtual Assistant?

Now, that still raises the question: how do you find a virtual assistant?

You can go about this in a lot of ways. There are generic virtual assistant sites that are really not specific to our industry but can be done for a wide range of operational, administrative or personal tasks. Zirtual is a growing upstart in this space, VirtualAssistants.com, or VirtualStaffFinder.com (which is run by a gentleman named Chris Ducker, who's big into leveraging yourself with virtual assistants). Ducker's team mostly is based in the Philippines but reportedly is very well-run and executed as a foreign virtual service team.

You can also look at general freelancing sites like Upwork, which helps you find people for specific freelancing projects. Fiverr is another one where you can delegate little tasks for $5 (thus the name). A lot of those tasks end out with add-ons, that cost a little more, but it's a good place to outsource one-off tasks.

What About a Specialized Virtual Assistant For Financial Advisors?

The aforementioned sites may work well for one-off tasks to delegate. But for a lot of us advisors, we need someone that's more focused and dedicated to the advisory practice on an ongoing basis.

When you start going down that road, there are actually a lot of industry-based solutions - virtual providers in the advisory world that work primarily or solely with advisors. These solutions are very underappreciated! There are options like Jessica Riner's Consider It Done, Donnie Carpenter's Back Office Solutions, Sherry Carnahan's Total Office, and Jan DeProspero's Virtual Office Solutions. They all help with a wide range of operational and administrative tasks in advisory firms.

In addition, you can outsource specific advisory-firm-related tasks like financial planning prep work to Sue Chesney's Delegated Planning or Burt Williamson's PlanPrep. You may even know, we have a business for outsourcing financial advisor bookkeeping and accounting called FA Bean Counters!

So there are actually a lot of specialized services to help you get work done virtually. But an important thing to recognize in using virtual assistants well is that you're not necessarily trying to find one person to do everything. The point is often just to find focused experts that do particular things well.

Are There Compliance Issues When Using A Virtual Assistant?

There's a question here [from Periscope]:

"Are there compliance issues to be concerned about?"

Any time someone will have access to private client information, you should have a privacy agreement with the service provider (the virtual assistant) that acknowledges that they're supposed to respect the privacy of the clients while engaged as an independent contractor.

Of course, ultimately you're likely going to connect with them via web-based software? And we already have cloud-based CRM and other software. So it's not new that your might access the CRM and other client information from a different place than where you are. But there are some important tips, true for virtual or in-person staff. Any staff member that touches your client information or your CRM should have a controlled log-in. You should have an audit trail to track what's being done in client records. And any staff member should be acknowledging that they're going to honor the privacy policy of the firm.

So you'll still need that done, working virtually or in person. But beyond that, I'm not aware of any specific impediments around compliance beyond the issues that, frankly, you should have as an obligation for any employee of the firm, virtual contractor or otherwise.

Another compliance tip, though, it to make sure that you're using software where you can control access to the software itself. So don't give your virtual assistant your personal login to your advisor CRM. Buy them a separate license. I know it's a little bit more expensive to buy them a license. But when you buy them a license, if you let them go, you can turn the license off! If you give them direct access to all your personal logins, it's hard to stop them from accessing it if you terminate the relationship! Whether you fire them for cause or they're just moving on, if they had access via your personal login, you need to change all your passwords and logins to protect the information. That's more problematic than just disabling their license!

So get them their own logins, or use a system that controls and limits their access, like Meldium, where you're not sharing your personal passwords directly, and you can turn off their access to client information when you terminate.

I suppose I have to also make the obligatory statement that you should run this by your compliance consultant as well, as maybe your compliance consultant has something else to say about it. But at least for financial advisors I've commonly seen using virtual assistants, these are the primary compliance issues to handle.

Where Else To Find A Virtual Assistant: Your Personal Network!

One last tactic I should note regarding where to find a virtual assistant: your own personal network. The people you know.

My original virtual assistant actually came from my personal network. It was someone that I knew who had worked in the work force, did great work, she took time off to start a family, she was out of the work force for a couple of years, her kids got to the point where they were going to kindergarten, she wanted to come back into the work force, and so she started working with me. And as her kids have gotten older and are a little bit more independent and my business needs have grown, she went from 5 hours a week to 10 hours a week to 15 hours a week to 20 hours a week and now works with me full-time. It evolved in a way that worked for the both of us.

So even for me, finding my virtual team has been a blend. My virtual executive assistant came from my personal network. Actually, most of the team, as I think about it, came from personal networking, trying to find people who are good at certain things. And the good news was that I didn't care where they were, I could work with them virtually. That's actually very freeing. I get to leverage my whole network to answer the question: "Do you know anybody who does ____ well?"

So not to knock Zirtual and Upwork and the other places. I've used Upwork and Fiverr a number of times as well, but for a lot of the ongoing relationships, you may find actually come from your personal network.

What's the Cost of a Virtual Assistant?

So what about cost? I get this question a lot:

"What do you pay for a virtual assistant?"

The cost varies greatly, depending on the kinds of tasks you're delegating. The broad base of administrative-style tasks and operational stuff, I find tends to start at about $15/hour and goes up to maybe $30/hour for that sort of work. A lot of the work can get done at about $20 to $25 an hour, that's a healthy professional hourly rate for someone that does reasonable work. Particularly when they get the flexibility on their end. They get flex time and don't have to go to an office!

The more experienced they are and the more competent they are, the more the cost moves up the line. And the more specialized the experience, the more it moves up. So if you're trying to find people that have deep background experience in our industry, you might find it costs $30 an hour, $40, or $50 an hour. If you're looking at outsourcing things like financial plan preparation, where you probably need someone that's got a CFP and a lot of experience to be able to do that fairly unsupervised and just give you a quality finished product, it gets more expensive. You might pay $100 an hour or $150 or even $200 an hour for that work.

But again, recognize this in the context of the value of your own time as a financial advisor. The simple math is if you work 40 hours a week for 50 weeks a year, there's about 2,000 hours a year of working time. And so if you want to be productive on your end, if your goal is, "Hey, someday I want to make $200,000/year as an advisor," then the value of your time should be $100 an hour. Anything you can let go of that isn't worth $100 an hour, you need to let go of. So it doesn't matter whether they cost $80, $60, or $50, or $30. Actually if they cost $30, it can take them three times as long to do something as it takes you. You'll still be ahead by delegating that!

Another nice thing about virtual assistants is the flexibility of just buying the time you need. The person who's working with you, they're only expecting to get paid for the hours they do stuff for you. So relative to hiring full-time staff member, where as a solo advisor your headcount is going to go up by 100% because you added a second human being, and you have to swallow a full-time salary and benefits and all the rest at once... a virtual assistant is a blessed middle ground. If you just need to delegate 10 hours a week of work, bring someone on for 10 hours. Only pay for that 10 hours, not a full-timer where you only have 10 hours of stuff for them to do.

And then as your business grows, you may find that 10 hours becomes 20, and 20 becomes 30, and then maybe you graduate up into having a full-timer. But you get there more slowly and steadily in a manner that better aligns with the growth of the business, rather than taking on a big hiring chunk all at once.

Also, don't forget the benefit of getting people who are really specialized at what they do. When you hire a virtual assistant, you'll have to train them on your process, how you want to work with them, how you're going to interact, what you expect out of the work quality. But you generally don't have to train them about the details of how to do their job? You don't have to train FA Bean Counters about how to do accounting for advisors, that's what we do. You don't have to train outsourced operations people for advisory firms how to do operations, that's what they do.

And so when you find more focused and dedicated virtual staff, you also relieve at least a big portion of that training obligation that I know is very burdensome for a lot of advisors. You should really just have to show them or explain it to them once, and then you still have to occasionally check in and make sure that it's being done the way you expected. But it's not the same kind of hands-on, intensive training experience, as taking on a full-time staff member who has time but doesn't know the work at all.

Managing Quality Standards and Hours for a Virtual Team

Andy, you have another great question here [from Periscope]:

"How do you oversee quality standards and their hours?"

As with anything regarding work quality, I think you're going to judge by outcomes. You're going to judge by the quality of the work that comes back to you.

When I started with my virtual assistants, I started by routing all work through me. Because then I could be the ultimate quality control check. As they got more competent, and I got more comfortable, I loosened the reins on that, and allowed them to communicate directly with each other. So basically, you'll graduate them up in complexity of tasks over time, as you see the outcomes to evaluate whether ultimately it's good work quality.

Now, in terms of evaluating their hours and whether they're putting in the hours, frankly, it'ts going to come down to trust. That's true even if someone's physically in our office, too. Unless I hover in their doorway and keep looking over their shoulder, at some point, even the people who are physically in our office, you judge by work product and outcomes. Did the stuff that was supposed to get done, actually get done. And frankly, you should have some sense as to how long it takes, because you know how long it took you to do it in the past before you delegated it. That should give you some sense of timing. Add a little because they're not as trained on it or experienced on it necessarily as you (although maybe for some tasks, they'll be faster and more efficient!). But you can compare how long they're taking to how long it used to take you, and get some sense of their hours.

[Another Periscope Question]:

"So is billing by task or time?"

In terms of billing, it's typically by time for almost every virtual assistant relationship I've seen. Because frankly, virtual assistants are in the business of trading time for dollars. So when they do it based on task, frankly, they don't want the risk that it takes longer or that you interact with them more and ask more questions and make them do more changes. Because then it comes out of their margin, if they quoted the wrong time and cost up front.

I suppose you might find some project-based items that fit into project-based fees. I think some of the outsourced plan delegation folks actually have the option to let you delegate it as "Here's a plan, it costs 'blank.' Here's what we'll produce for you."

But most of the ongoing virtual assistant work I find, it's billed based on time. Hopefully, their cost of time is comparable to yours, maybe slightly lower. Though even if it's higher cost, it may work if you're trying to leverage yourself more.

Another question here [Periscope]:

"Bill per project on one-offs?"

Yeah, I think you could try to do it that way, but again, it's a two-sided deal here. Why, from the advisor end, do you want to bill a single project on a one-off basis? Because you're hoping to get more time out of them for a single project. Right? That's why we do it. So if you're the virtual assistant, why do you want to do bill for projects when you can just bill hourly? Well, same thing on the other end, they'd rather bill hourly! And we go through this with our clients, too. Our clients want us to bill us a fixed fee for the plan, we want to bill hourly so that if the plan takes 47 hours, we don't get screwed on the scope project. You're going to find the same dynamic, I think, with a virtual assistant. With a specific one-off project, maybe it's feasible. With a more ongoing relationship, which I think is what you'll find a lot of these turn into if they go well, it's not project-based in the first place, it's more ongoing time-based. You say "Here's the stuff I need help with" and they put in the time and the exchange happens.

So I hope that's helpful food for thought. Great questions, everyone, thanks for joining in!

This is Office Hours with Michael Kitces, 1 p.m. East Coast time on Tuesdays. And have a great day, everyone. Thank you!

So what do you think? Have you ever worked with a virtual assistant? How did it work out for you? Any tips you can offer? Any questions you have if you've never used a virtual assistant in the past but are thinking about it now? Please share in the comments below!