Your RIA firm needs reliable IT, but it’s not always clear if you should hire someone or work with a Managed IT provider. Or, should you explore the idea of both (aka co-managed IT) and give your IT staff support from outside expertise?
Each approach has it’s benefits and drawbacks. What works for one RIA doesn’t necessarily work for another. What is common across the board though, is that whichever way you structure your team, you want worry-free IT and confidence in the support you have. And it also helps if you like the people or team you’re working with.
We’ve outlined the two main approaches RIA firms take to their IT support: internal staff and Managed IT – what it will cost (more or less) and some of the benefits and pitfalls of each.
What you should budget for IT staff
The website for Robert Half Technology (as of October 2018) suggests that a Network Administrator in Chicago should expect salary in the range of $92,316 and $156,536. Benefits, training, bonuses etc would be extra. You could also add onto that any outside consulting you’d need to provide expertise the employee doesn’t have or to support one-off projects. Many companies budget an additional 30% for those extras, which would bring the cost for the full-time employee to between $120,010 and $203,496. It might be safe to budget somewhere in the middle at $161,753 per year or $13,479 per month.
Benefits of full-time IT staff
- When you hire someone, they become part of the team and ideally become part of your corporate culture. While some managed IT providers also start to feel like part of the team, hiring an employee also gives you more control over what they do day-to-day and might let you change priorities easier.
- If your RIA or team members needs someone on site on a regular basis, an IT staffer might be a good investment. A good example would be an office that often needs something physically repaired or who has team members who expect someone in their office to help them resolve issues.
- If you currently have in-house IT staff and don’t want to change or disrupt how you do things, then hiring is the way to go. While good managed IT providers should be able to transition you smoothly to their service model, if disruption is out of the question, then stick with staff. You can always use an outside provider for project support or services that wouldn’t impact day-to-day operations.
Pitfalls of full-time IT staff
- Depending on the size of your firm and the size of your IT budget, the costs for a qualified professional might be too much.
- It’s not easy to find a Network Administrator (or other IT professional) who is good at everything you need them to be good at. The market for these people is very competitive and you should expect salaries to reflect that.
- Before you hire, prioritize what skills you want this person to have. It’s likely you’ll have to make sacrifices. Hiring someone with management skills for example, likely means that they’re not interested in or less experienced with hand-on tasks (or maybe are far enough into their career that they don’t want to do that work any longer). If you choose instead to hire someone with hands-on expertise, you should not expect as much from them strategically.
- Like other support roles at your RIA, you’ll need to find ways to fill in for vacation time or support after hours. You can’t expect an employee to be available 24/7.
- High turn-over is a reality in the IT industry. Hiring means expecting to have to replace and retrain frequently – no matter how great it is to work at your firm.
What you should budget for Managed IT services
Most outside IT support comes as one of two models. The first is a break-fix approach which is a when-needed service. Fees in Chicago can range from between $125 and $255 per hour. They often have a minimum 2-hour service call. Some providers will let you purchase a package or block of service hours at a discounted rate (between 5% and 10% typically) to help you budget. Individual projects can often be quoted independently based on the work needed.
The other service model is Managed IT services. It’s usually a better option for RIAs, and generally includes a comprehensive package of services for a fixed monthly fee per user. Typically, it includes maintenance, back up, and helpdesk support although each provider may be slightly different in what they offer. Some may offer cloud-based services as well. In Chicago, expect anywhere from $50 to $150 per user per month depending on the package. These service providers may also have the expertise to provide individual project support if needed.
Learn more about IT service models and fees in our free whitepaper:
RIA’s Guide to IT Support Services and Fees.
Benefits of Managed IT services
- Most RIAs find that, in the long run, this option is more economical. It will come down to the kind of support you need and the provider you work with.
- If you’re moving to the cloud, most managed IT providers will include the costs of moving to a cloud platform as part of their monthly fee. The savings can be significant.
- When you hire an outside firm, you’re getting a full team of professionals. They bring a broader range of expertise than a single employee could offer. Because of the nature of their business, they’ve probably already encountered and solved most of the problems you’ll experience at your RIA.
- You should expect nothing to be put on the back burner because of other priorities. Unlike a staff member who often gets pulled in different directions, a managed IT provider has a team to stay on top of everything. A good example is patches or updates which can be time consuming and are sometimes missed or forgotten by busy IT staff. A service provider should test and install all patches on schedule.
- A reputable managed IT provider will invest time and resources in ongoing staff training and education. They should be on top of recent technology changes and releases and be able to make recommendations that would benefit your RIA.
- A co-managed IT approach gives you the option to use the Managed IT provider to support or supplement your current IT staff. It’s common to see things like day-to-day helpdesk support, backup and security, general maintenance etc managed by a services provider while your staff member manages other aspects of the network.
- Most managed IT companies will offer some form of 24/7 support so you can expect help when you need it.
Pitfalls of Managed IT services
- While Managed IT contracts have a fixed monthly fee that lets you easily budget and scale your support, service providers who use an hourly break-fix model can become costly. Costs can sometimes be unknown for projects or problems that arise.
- Outside consultants will not typically provide someone onsite at your location unless you specifically negotiate this as part of their services. An issue or project that requires a physical presence to resolve would mean someone would have to be dispatched to your location.
- Be sure the service provider you work with gives your company an assigned point of contact. You will want to build a relationship with someone who is responsible for the service they offer to your company. You don’t want to have to deal with a different person every time you contact them.
- Establishing trust is paramount with outside service providers. They have access to your network and data and are responsible for security. Request references and do your due diligence before signing on with a company.
Ready to find out what a Managed IT package would cost for your RIA?
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