In-House, Hybrid, or Outsourced CFO: How to Make the Right Choice for Your Firm

The in-house vs. outsource debate isn’t black and white, especially for the CFO role. Every firm is unique. Goals shift, team dynamics evolve, and financial priorities change. What worked for your launch might not continue to work as your firm matures.

That’s why we believe the debate is really about expertise, not headcount. The question isn’t where the person sits, it’s about what you need now and who has the right expertise to deliver it effectively.

Outsourcing your CFO function is about accessing the right expertise, exactly when and how you need it.  Staffing your firm with the right combination of skills could involve an in-house team, an outsourced team, or a hybrid of both.

So, how do you decide which approach is best? The correct path for your firm depends on your timeline, the nature of the work, your budget, and the make-up of your existing team (if you have one). Not sure which option is right for you? Here’s how to think it through.

Timeline: How Soon do you Need Support?

Whether your goals are immediate or you’re planning for the long haul, your timeline is a big factor in the decision. Outsourcing offers speed and flexibility with minimal onboarding, rapid deployment, and access to industry experts who are ready to deliver results.

Key questions to ask:

  • Has someone left your firm unexpectedly or gone on leave? Yes ⮕ Outsource.  
  • Do you have time for extensive training and onboarding? No ⮕ Outsource or Hybrid.
  • Is this an emergency project or regulatory response? Yes ⮕ Outsource or Hybrid.
  • Unsure how long you’ll need extra help? Yes ⮕ Hybrid or Outsource.

Scope of Work: What Kind of Expertise do you Really Need?

Be honest and realistic about your exposures. Do you need strategy or execution? What is more important, stop-gap support or senior level insight? The best approach is to match responsibilities with seniority.  You wouldn’t want to pay a CFO to reconcile cash, just as you wouldn’t task a fund accountant with approving detailed expense allocations.

Key questions to ask:

  • Do you need someone who has been in this position before? Yes ⮕ In-house or Outsource.
  • Do you need to remediate deficiencies found during regulatory exam? Yes ⮕ Outsource or Hybrid.
  • Are you lacking the policies and procedures to be ready for operational due diligence meetings?  Yes ⮕ Outsource or Hybrid.
  • Are you launching a new fund or raising capital? Yes ⮕ Hybrid or Outsource.
  • Do you have security and confidentiality concerns around your investment strategy? Yes ⮕ In-house.

Existing Team: Who’s Already in Place?

If you don’t have an existing team, outsourcing can give you full finance functionality without building a team from scratch. If you have a lean team, then a hybrid approach can fill skill gaps and handle overflow. Prioritizing in-person culture? An in-house team or leader is your best bet.

Key questions to ask:

  • Is the team lacking a range of experience or seniority? Yes ⮕ Outsource or Hybrid.
  • Do you have a rock-star in-house team that needs specific help? Yes ⮕ Hybrid.
  • Is in-office collaboration critical to corporate culture? Yes ⮕ In-house.

Budget: How Far Does Your Spend Go?

An outsourced or hybrid model offers a customized plan and access to qualified talent without the long-term cost of full-time salary + bonus, benefits and overhead. With outsourcing, you can achieve significantly more within the same budget.

Key questions to ask:

  • Can you afford the expertise and seniority you need? No ⮕ Outsource.
  • Do you need a team but only have the budget for one in-house hire? Yes ⮕ Outsource.
  • Will your budget scale in the very near-term? Yes ⮕ In-house.

The Bottom Line

Allocators understand budget constraints and know that emerging managers often need to be resourceful. What matters most is that you're taking clear steps to institutionalize your business—even if you’re not yet able to hire a full team.

Regardless of size, or structure, your firm has options.  From an extra set of hands to bridge a gap, to a CFO for your first two years, outsourced CFO services provide fast, customizable access to the expertise you need, without the overhead of a traditional team.

Still not sure which option is right for you? Let’s talk about your needs and develop a plan that makes sense for your firm.