There are so many things available for new business owners to spend their money on. It often feels as though there are too many options – and financial planners who have founded a new RIA are overwhelmed with sticker shock. Deciding what expenses are worth the cost, or will provide a large enough return on investment to be worth it is difficult.

As much as we want to keep our business expenses minimal, focusing only on cost and ignoring the return on investment, could be more costly in the long run.

What’s A “Good” ROI?

Before you dive into deciding where you should be spending your limited budget, it makes sense to define what kind of return on investment you’re looking for. “ROI” is a term that gets thrown around often. The truth is, there is no one true measurement of whether or not your investment is “performing.” What’s worth it to someone may not be worth it to someone else. That being said, we typically recommend that you look at a few indicators to determine whether a cost is going to pay off in the long run.

Is it saving you money, or making you money?

If an expense is saving you money, than its usually a good investment for your business. Keep in mind that some business expenses will save you money in unexpected ways. A CRM, for example, helps you to track leads and interact with them in a way that makes it easier for them to sign on with you. Over time, having an organized way to track your pipeline is likely to make you money – which indicates that its a cost with an excellent ROI.

Is it saving you time?

As a business owner, time is money. If a business expense is costly, but saves you time, it may have a good return on investment. Outsourcing some business tasks is a perfect example. Whether you’re hiring a virtual assistant, an operations consultant, or a paraplanner – all of these roles can save you a significant amount of time working on your business so that you can focus on revenue-generating, or client-facing activities.

For example, let’s say you spend 20 hours of your time each month filling out custodian paperwork and following up on NIGO alerts. You might be perfectly happy doing this yourself, but by outsourcing this task to a virtual assistant, your time is freed up to build your business.  Perhaps you spend $500-$750 for a VA to do these tasks, but if you used that time to sign an extra client worth $2,400, than your ROI is almost immediate!

Is it giving you peace of mind?

Although some business expenses may not directly generate revenue or save you time, that doesn’t mean they have a bad return on investment. Some expenses make your life easier as a business owner. Peace of mind is tough to put a price on, but can still be worth it if it helps you refocus in your business, or achieve a higher level of performance. One example might be a more expensive invoicing or accounting software that simplifies paying quarterly taxes. Although the added expense may not seem like a good ROI at first glance, the positive feeling you’ll have knowing that your quarterly estimated taxes are correct and taken care of may be invaluable.

What Expenses Are Worth It?

Whether you’re a brand new RIA owner, or you’ve been in business for a while, it’s always good to take a pulse check of your expenses and eliminate anything that isn’t actively adding value to your business. At New Heights Solutions, we believe that a few key expenses tend to consistently have the biggest ROI.


A CRM that’s tailored specifically to advisors, like Wealthbox or Redtail, is ideal for advisors regardless of where they’re at in their RIA journey. New advisors still have room to grow into their CRM without having to worry about “upgrading” the cost down the road. Seasoned advisors have all of the features and integrations that their booming practice needs.

Financial Planning Software

Can you put together a financial plan using a pen and paper? Sure. Does crunching the numbers using a spreadsheet and a calculator sound efficient or fun? Probably not. A solid financial planning software that helps to build a client’s portfolio and automate asset allocation can be a time saver. It also allows for less room for error – meaning that you could be saving your clients a lot of money!

Invoicing or Accounting Program

This is both a time, money, and peace-of-mind investment for your business. Being able to automate invoicing, and ensure that your books are in order can help to increase your business’s cash flow, coordinate your tax payments, and record every cent of deductions you qualify for as a business owner. Committing to an effective invoicing, accounting, or hybrid program that serves your business’s needs and makes client payments a breeze will continue to be a life saver over the course of your entire career.

Outsourced Tasks

Whether you’re outsourcing paraplanning, admin tasks, or any other non-revenue-generating work, we believe that this expense serves you on multiple levels. Giving work to contractors who are experienced means that you’re receiving the best work available – possibly even better than what you, as a busy business owner, would have time to produce! Excellent work that supports your practice makes for an exceptional client experience. This builds strong client relationships, increases referrals, and draws leads to your business. In short – outsourced tasks can hit all three of our ROI check boxes: saving money, saving time, and giving you peace of mind knowing that tasks are being executed well for your business.

Knowing What’s Best For You

There’s no “right” answer when it comes to knowing whether or not the ROI for a business expense outweighs the cost. The key is to determine what works best for you and your financial planning practice, and decide what kind of ROI you’re looking for. Knowing whether you want expenses to save money (or generate revenue directly), save time, or provide you with peace of mind can help you to weed out unnecessary expenses and spend more freely on the items that help your business thrive.