Back-office operations is the backbone of any investment management firm.
And having someone who consistently handles daily reconciliation and performance reports is a huge benefit.
If you’re lucky, you’ve had this investment ops person for a number of years.
… but now they plan to switch firms or retire.
At this point, you appreciate their work more than ever, but you’re not looking forward to their departure.
Finding a back-office replacement is often stressful, but it doesn't have to be. Consider the options below.
Today's workplace is more flexible and remote than ever. Not all investment operations work has to be done physically at your office.
Instead, a team of outsourced back-office operations specialists can do it remotely.
Not only is outsourcing a less expensive option, but you don’t have to worry about hiring and training the replacement. An outsourced provider like Empaxis handles all those activities for investment firms.
Additionally, the outsourcing path is an attractive option if you work in an area with a small local talent pool.
And according to a Northern Trust survey, 32% of respondents said they outsource, up 27% from 3 years ago.
And of those that outsourced, 95% were satisfied or very satisfied with their outsourced solutions. 53% said it directly correlated with generating more revenue.
If you have routine and predictable back-office processes, let technology do the job, or at least a good chunk of it.
Automated bots for wealth and asset managers can be programmed to do things like data entry and report generation, among other tasks.
Do you in alternatives assets? Private equity processing is a huge area of opportunity for automation. Through a process known as RPA (Robotic Process Automation), bots cam take care of all the statement downloads and subsequent workflows.
John Beatty, the COO of Schwab Wealth Advisory Services, shared his thoughts on the importance of data and automation used together:
“In some ways, data and automation is a one-two punch. Data can help advisors know when clients need them, and automation can tee them up to be there when clients need them.”
And don’t worry if you're not a technical person; you don’t have to set anything up yourself.
A team like Empaxis has automation solutions for wealth and asset managers, and we will set up and maintain everything you.
If you don't think you need a replacement, existing staff can do the job.
But the questions are:
If the workloads are heavy, fixing cash and position reconciliation breaks can take a lot of time. Even more so for Separately Managed Accounts reconciliation.
And if you push the team too far and stretch resources thin, it will lead to burnout and ultimately less productivity.
This is a tricky option, but if you divide up the work properly among the right staff, it could work, at least for the time being.
This could be a challenge for a number of reasons.
You’ve had someone all these years, but now you’ve got to:
In what is still a relative tight labor market, you may find yourself repeating the above processes.
The war for talent is real, and recruiting talent is “by far ‘the biggest concern’ RIAs say they face today,” according RIA consultancy firm, DeVoe & Co.
It’s inevitable that one day a longtime and trusted operations expert would switch jobs or retire altogether.
Having such a reliable person in your back office is nice, but once they’re gone, you need a long-term solution.
In-house hiring and spreading out the work among existing staff are not always good choices. After all, employees are not afraid to leave, and if they get burnt out, they know where the exit door is.
Outsourcing and automating are more attractive options not only because RIAs save time and money, but firms get better results and avoid the perpetual hassle of hiring and training staff.
The RIA landscape is changing rapidly, as the top wealth and asset management firms increasingly leverage technology and compete fiercely for talent. Stay with the competition and make things easier for yourself by letting automation and outsourced solutions do things for you.