“Am I a Bad Manager?” – Fixing RIA Back-Office Operations Problems

//“Am I a Bad Manager?” – Fixing RIA Back-Office Operations Problems

“Am I a Bad Manager?” – Fixing RIA Back-Office Operations Problems

RIA back-office operations problems may prompt you to ask a difficult question: “Am I a Bad Operating Manager?”

Perhaps you’re concerned about your team’s poor performance, the rising operational expenses, and/or the coming and going of employees.

It’s not a pleasant question, but self-criticism and reflection is a good thing. The very fact you’re here reading this is proof you care. Asking if you are a bad manager doesn’t mean you are a bad manager; it just means you think can do better. You can always do better.

Asking the Right Questions to Address RIA Back-Office Operations Problems

Have you seen improvement in your back-office operations performance?

Think about when you first became the COO or operating director. Can you say your operations is in a better position now than it was then?

Are the same reconciliation and performance reporting problems you saw back then still appearing today? What have you done or tried to do to remedy the situation?

Operational Improvement Tip:
Think about how you track and fix reconciliation reporting errors and the effectiveness of your current methods. Consider the benefits of implementing a Six Sigma program for your hedge fund or asset management operations.

How serious have you been about controlling operating costs?

Do you see your costs go up and up? What have you done, if anything, about them? To be fair, you’re not alone if you’ve seen an increase in expenditures.

But the measures you take in response to the costs is another way your management skills will be judged.

Operational Improvement Tip:
Rising operations and compliance costs are threatening wealth managers, so consider outsourcing middle- and back-office functions. Your costs can be fixed as opposed to variable, and the services you pay for can be anywhere from 25-50% lower compared to what it costs you in-house.

How long do your back-office portfolio associates last?

Does it feel like your back-office has become a revolving door? Employee turnover is no small matter.  For a departed staff member, it costs companies on average 6-9 months’ worth of their salary to replace them, as the money is spent on recruiting and training.

Operational Improvement Tip:
Consider improving your hiring practices and employee retention strategies.

In a strong economy, your job as an operations manager is harder because more employment opportunities means workers don’t feel “stuck” at their current job; they believe the grass is greener at another investment management firm.

But don’t solely rely on a healthy economy as an explanation for your back-office operations problems, because a Gallup poll found that 50% of employees quit their jobs because of a bad manager.

In that case, consider changes in your management style. One of our recent blogs offers great suggestions in how to be a better leader if you think you’re to blame for back-office operations performance.

What Are You Doing To Be More Efficient?

Do you ever feel like things are taking way too long to get done? After all, it’s 2018. Clearly you would hope that after a few years, some processes could and should get done in shorter time. The longer it takes to do something is a waste of your organization’s time and money.

Operational Improvement Tip:
Think about investing in new technology and automation. As workloads increase in volume and complexity, especially when it comes to handling separately managed accounts, having a more efficient method to handle the portfolios helps your bottom line.

When you’re working with numerous banks and custodians, having automated systems to retrieve and organize all of the data accurately and quickly will help in your reconciliation and performance reporting efforts. One of our previous blogs talked about how automation can help your back-office reporting.

If you’re not sure about your ability to implement the changes in-house or even where to begin with automated technology, you should speak with back-office portfolio accounting outsourcing experts who have the talent and resources to automate and simplify your processes.

Solutions for your RIA Back-Office Operations

It’s not for us to say whether you are or think you are a “bad manager”, but the major takeaway is there are solutions to the operational problems you’ve encountered.

Implementing Six Sigma can improve operational performance by reducing reporting errors,
outsourcing can significantly reduce your costs, modifying your hiring and retention practices can reduce turnover, and use of automated technology can improve your efficiency. Of course, these are only a few solutions, but implementing some or all of the changes could make a big difference.

It’s not easy asking questions in which the response could paint oneself in a negative light. After all, nobody wants to be seen as the leader that contributed to the advisory firm’s operational issues.

But being critical of yourself is not always a bad thing, as it shows the high expectations you set for yourself. You’re reading this because you want solutions, and you want to be better.

You can always be better, and if you make the right changes, you will be better.


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By |2019-01-18T22:17:19+00:00July 24th, 2018|Managing Operations|0 Comments