Is Your Back-Office Operations Person Retiring? 4 Replacement Options

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 retire.

At this point, you appreciate their work more than ever, but you’re not looking forward to their departure.

Finding a replacement is often stressful, but you can make it a little easier. Consider the options below.

4 Back-Office Operations Replacement Options

1. Outsource Operational Functions; Hire a BPO Services Provider

Today's workplace is more flexible and remote than ever. You don’t necessarily need someone to come in to the office every day to get the work done.

Rather, you can have a team of outsourced investment operations specialists handle your back-office processing.

It’s a less expensive option, and you don’t have to worry about the hiring and training. A BPO services and solutions provider like Empaxis does all of it for you.  

The outsourced path is an attractive option, especially if you work in an area where the local talent pool is limited.

And according to a Northern Trust survey, 32% of respondents said they outsource, up 27% from 2 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.

2. Leverage RIA Technology and Automation Tools

Check Out Our Automation Guide for RIAs

If your back office processes are routine and predictable, you could use asset and wealth management technology like automation.

Automated bots for wealth and asset managers can be programmed to do things like data entry and report generation, among other tasks.

If you’re invested in alternatives, 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.

What else can RPA do? Check out one of our earlier posts.

Don’t worry if you think you lack the technical skills; you don’t have to set it up yourself. A team like Empaxis has automation solutions for wealth and asset managers, and we will set up and maintain the bots.

All you need is the vision, and we will implement.

3. Existing Team Members Take On the Work

If you prefer not to find a replacement, you could have the remaining team do the job.

But the questions are:

  • Do they really want to do it?
  • Do they have the capacity?

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 your resources thin, it will lead to burnout and ultimately less productivity.

Remember, employees know they have options, too.

4. Traditional Hires

To be honest, this is the most stressful path.

You’ve had someone all these years, but now you’ve got to:

  • create a back office operations job posting
  • share it across multiple platforms
  • sift through applications
  • interview people
  • hire and negotiate their employment contract
  • train them up
  • hope they work well with you and stay for a long time

In today’s tight labor market, you’ll 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.

Build Your Back Office for the Future

It’s inevitable that one day the longtime and trusted operations expert would retire.

Having a longtime and 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 isn’t always the best choice. 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 they save you time and money, but you 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.

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