Your Back-Office Decisions Also Require Due Diligence

Consider this conversation I had with an advisor – the advisor mentioned he was interested in a particular portfolio reporting software. I asked what he thought of it. In one sentence, he said that he hasn’t seen it, heard about it from an advisor, will have a demo on it in two days, and if he likes it, he will buy it. He then asked me how much the software cost because if it’s too expensive, he won’t look at. I didn’t bother to ask for the definition of “too expensive.”

There are areas of your business where due diligence efforts come into play such as the following:

  • If a prospect tells you he/she is considering another advisory firm, you probably would educate the prospect on the importance of asking the right questions before selecting an advisor, and provide some of those questions
  • When making investment and asset allocation decisions
  • Areas where your compliance manual states that due diligence is necessary
  • And then there’s your back-office…

    Don’t let due diligence take a back seat to a hasty decision-making process. Everyone is busy and loves a great sales pitch. However, the worst time to find out you didn’t ask enough questions is during the implementation. After the contract is signed and the check is written isn’t the time to be looking at the contract carefully.

    Due diligence needs to be effective, not complicated

    Your goal is to make the right decision, not a quick decision. The following are several due diligence strategies for your firm’s business decisions:

    Before making a decision based on a great sales pitch or time constraints, remember that due diligence also applies to your back-office.