Back-office operations is the backbone of investment management firms.
And having reliable individuals who consistently handle daily reconciliation and performance reports is a huge benefit.
… yet their true value often goes unnoticed—until the day they announce they’re switching firms or retiring.
For operations managers, this can be a jarring wake-up call, especially when the back office had seemed to be running smoothly on “auto-pilot.”
And for the first time in a long time, you now have to find a back-office replacement.
Consider the options below.
Instead of recruiting, hiring, and training new employees yourself, it may be easier (and more cost-effective) to leverage third-party back-office services providers.
Outsourced providers like Empaxis handle the hiring, training, and deployment of MBO resources for investment firms.
And such vendors have already developed the talent, internal efficiencies, and labor arbitrage to pass on the savings to you.
Is your company located in a smaller market with a limited talent pool? It’s just another reason to consider outsourcing, as you can tap into larger talent pools globally that aren’t available in your immediate vicinity.
And according to one survey, 95% of RIAs said they were satisfied or very satisfied with their outsourced solutions. 53% said they directly correlated their outsourcing activities with allowing them to generate more revenue.
If you have routine and predictable back-office processes, let technology (especially automation and AI ) do the job, or at least a good chunk of it.
Automated bots and AI-powered tools for wealth and asset managers can be programmed to handle tasks like data entry, report generation, and exception handling, freeing up your team for higher-level work.
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.”
Want to learn more about what else automation and RPA can do? Check out one of our earlier posts.
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 and systems integration 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:
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, leveraging technology via AI and automation are more attractive options not only because RIAs save time and money, but because they 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 ahead of the competition and make things easier for yourself by letting technology and outsourced solutions work for you.
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