Operations On My Mind

Here are some of the issues that the operations professionals who are HIFON members are thinking about these days.

Most of you know about HIFON (https://hifon.org), the membership organization for operations professionals.  If you haven’t read my article describing HIFON’s origins and purpose (the acroym stands for High-Impact Financial Operations Network), then you can find a more detailed article here: http://www.bobveres.com/practice-management/operations-community/, but the gist of it is that the organization is now up to 208 COOs and operations managers, who pay $600 a year for access to monthly conference calls facilitated on a rotating basis by volunteer members, plus a discussion forum that covers any operations topic you might think of. 

Members can bring up subjects that they’re wrestling with at their firms (Has anybody used this new software program we’re looking at?  How do you cover the work when somebody has an illness or has to take emergency personal leave?  How does your firm input the performance information on held-away accounts, or maintain the links to your account aggregation software?

There is also a shared library of documents and templates that members have contributed, which anybody can access.  This can include client data request forms for new clients, or client agreements, or sample requests from vendors as to their data security policies.

“HIFON brings together operations professionals into a community of like-minded professionals,” explains Shaun Kapusinski, director of operations at Sequoia Financial Group in Akron, OH, co-author of The Financial Advisor M&A Guidebook (https://amzn.to/2QAGhae), who founded HIFON back in 2010 as a study group for ops professionals.  “It puts the right people together and lets them have the conversations they want to have about the challenges and opportunities and issues that they all encounter,” he adds.  “What we’ve discovered is that there is a strong desire for connecting to specific areas of knowledge.” 

He cites two examples.  “There was an initial question where somebody asked: how many of you have marketing departments or a specific marketing person in-house?” says Kapusinski.  “The person posing the question was responsible for the marketing within their firm, and they asked that question: is there anybody else out there who would be interested in having a conversation specific to what we do from a marketing perspective?  Compared to a typical post that probably gets single-digit responses,” he adds, “this one attracted more than 40 respondents.

Volunteers were (and are) already managing an every-other-month conference call specifically devoted to compliance, in addition to the regular calls that would touch on any topic the participants wanted to talk about.  As a result of this request for more marketing information, HIFON added a second topic-specific bi-monthly call, where up to 50 people can discuss their marketing efforts.

Kapusinski says that the new women’s group has also attracted particular interest.  “A member asked, is anybody interested in having a discussion with other women who are operations professionals at RIA firms, talking about everything from career path to dealing with potential for partnership, and not being an advisor,” he says.  “We had the same type of response; more than 40 people responded and they set up a regular conference call.”

HIFON is also hosting privately-held monthly webinars with vendors and consultants who talk about their areas of expertise, offer insight into their products, and ask for feedback and features that the membership would like to see added.  “These have become increasingly popular,” says Kapusinski, “with regular attendance of around 50 members.”  Among the recent webinars: Scott Krawitz from PDSI [People-Driven Solutions, Inc.] on Marketing & Technology;  Maximizing Your ROI; Innovation in Wealth Management with Brad Felix & Will Lundstrom of Truepoint Wealth Counsel; and Jim Starcev of Nexa Insights on “Client Surveys for Financial Advisors.”

HIFON is also hosting a pre-conference workshop at the upcoming Insider’s Forum conference in Nashville, TN, relating to managing an ops professional’s career path by Xandra Pendergrass, COO of Signature Family Wealth Advisors; day-to-day compliance activities by Michael Del Priore, Director of Legal & Compliance at Bronfman Rothschild; and how to build out your operations team by Martine Lellis, COO of Sullivan, Bruyette, Speros & Blayney.

I asked Kapusinski to give me names of people who have led interesting recent discussions, on the chance that some of my readers might benefit from seeing what’s top-of-mind in the heart of the operations world these days.

Systematic training

One advisor posted a message on the HIFON discussion board asking whether any members had a process for training new advisors who were coming into the firm.  Several others reiterated that they, too, were looking for a process, and their observation was that most firms don’t seem to have one.  Adria Rosebrock, Manager of Advisor Training & Research at Hamilton Capital in Columbus, OH and Palm Beach, FL responded that she had spent the last five years developing a comprehensive new training program, and since then has trained over 20 new advisors and continuously expanded the program’s agenda.

“Every day, I have the HIFON notification come in with all the posts for the day,” she says.  “That one caught my interest, and I happened to have a few minutes to respond to it.”

One thing led to another, and before long, Rosebrock was hosting a webinar on the topic for one of the best attended sessions in HIFON history.

Rosebrock was recruited to her firm to be, as she puts it, “an advisor for advisors”—to help the firm’s advisors be better at their jobs.  “Early on in the job,” she says, “we hired a handful of advisors, and I sat down with the leadership team the week before they were going to start, and I said, “where’s your training manual?

The firm didn’t have one.  “They said, that’s what we’re meeting about today; to figure out what we’re going to do to train these people,” says Rosebrock.  “I had to scramble to learn what were the most important keys to being able to do the advisory work here.”

At that time, Hamilton Capital had 40 employees.  It now has 72, with 2,000 clients and $2.5 billion in AUM.  “In the webinar,” says Rosebrock, “we all talked about the fact that none of us are hiring advisors every day or every month,” so these training issues can sometimes get pushed to the back burner or are handled on a seat-of-the-pants basis.  Due to the flood of new hires, Rosebrock was forced to be more systematic, and she shared the process that was gradually honed over a period of years.

It starts with the essentials.  “There are so many little things that are confusing to a new hire, that people don’t think about that are really important,” says Rosebrock.  “Like: how do you get into the office?  Where’s the coffee?  Where is the printer paper at?  How do you use the printer?  How do you access email in our system?  Those are the things I would want to know on the first day.”

From there, she would focus on defining the core duties of the position.  “Why are we hiring an advisor?” says Rosebrock.  “They’re in our office because we have too much client work to do, and we can’t keep up with it.  They need to learn the duties very quickly that will allow our seasoned and lead advisors to leverage their time, get in front of more clients, respond to client messages, and provide advice.  So what are the things that our new hires can take off their plates?”

Then, after a week or two, Rosebrock would go over all the things that go into preparing for a client meeting, and what has to be done in the followup process.  How is a client onboarded, and what details need to be handled?  “I show them how to use our financial planning software, and the most basic functions: like intaking the data,” she adds.  “Then we work on becoming proficient at inputting and reading data, building out their financial plan [the firm uses eMoney] and creating the balance sheet and income statement.  What information is needed before each client meeting?  What are all the outputs going to look like?”

Rosebrock developed checklists that will help the new advisors, who will inevitably have trouble remembering everything they’ve learned.  It also helps standardize the workflows from the very beginning.  “You have to get a clear process that everybody agrees on,” she says.  “What is our process for the review meeting?  What is our process for how we onboard a client?”

In addition, the training covers the company’s philosophies on different aspects of financial planning.  For instance?  “Some people think whole life insurance is the best thing since sliced bread and every person should have as much as they can possibly afford,” says Rosebrock, adding that her firm’s philosophy leans toward buying term insurance to protect a family against premature loss of income, and investing the difference in a traditional portfolio. 

Another philosophy is working closely with a CPA when doing tax projections, and letting the CPA take the lead as the firm provides tax management advice.  Rosebrock says the firm’s planning team will still bunch charitable deductions and harvest losses, but it doesn’t prepare tax returns and the tax-related actions will be taken in consultation with the CPA. 

“We don’t want accountants to be surprised when March rolls around and our clients deliver their documents,” says Rosebrock.  “The client sees us as working together with them; it is not a separate relationship.  And as a result, we don’t have to worry about the CPA saying to one of our clients: they harvested all these losses, or they created all these gains, when they could have done this or that.

In all, new advisors hired by Hamilton Capital go through eight weeks of formalized training, where there are defined objectives.  “By that time, we will have covered all the processes that are core to the position, all of our procedures, and we will have provided guidance on financial planning and articulated our philosophy in various areas,” says Rosebrock.  “The goal is not to make someone a master advisor in eight weeks,” she adds.  “You touch on all of these topics and give them resources on how to remember whatever they might have missed the first time around.”

Rosebrock herself does most of the training, coordinating with other departments to help the new hires understand how to interact with them.  “About 80% of the time, they are sitting with me, me delegating work to them and overseeing how they handle it,” she says.

What, in her opinion, is the value of HIFON?  “What I love about HIFON is that it is made up of people who are working in RIA firms, who are focused on working ON the business rather than IN the business,” says Rosebrock.  “That is really unique and hard to find.

“One of the biggest realizations I’ve had from the HIFON group is that the problems we have are not unique to us,” she adds.  “It’s great to be able to compare the solutions we’ve come up with with the solutions that others have, and find the best way forward as a result.”

Finally, the community offers a sense of belonging that is hard to find in a world where the conferences and study groups all seem to cater to advisors.  “Sometimes it can feel like a lonely world where you are running what is essentially a small business with limited resources, and the solutions you hear about are all about working with clients,” Rosebrock says.  “It’s all about helping each other.  If I run into an issue, I’ll search through the discussion board to see if that question has been addressed.  If it has, then I’ll reach out to the people who responded and ask if I could talk to them a little bit more.  If it hasn’t, then I’ll post it myself and others will tell me what they know about the subject.”

As an example, the firm was recently looking at switching from Junxure to Salesforce, and she posted a question about real-world implementation of Salesforce in other firms.  “I was able to take back what I learned to our executive team,” says Rosebrock.  “Ultimately we decided not to make the switch because of how much work it was going to be, and we weren’t in a position to take on that much change after we’d just gone through an Orion conversion.  So we’re going to work with Junxure to push them toward the direction we need.”

Advisory board advice

MaryBess Gordon, Director of Client Services and Operations at BlueStem Financial Advisors in Champaign, IL, responded to a post from an operations person who was looking for advice on how to start a client advisory board.  “I replied that, yes, we did this about four years ago, and I would be happy to get on a call,” she says.

That offer for a one-on-one call quickly turned into a group discussion.  “After I posted, replies started coming in,” says Gordon.  “People said, oh, we’re thinking about this too.  I’d be interested in joining that call.  I reached to everyone, scheduled a call, and over an hour and 15 minutes, we talked about the process, what I learned through the process, some things not to do, some things that have worked out really well.”

What did she share?  “One of the first things I encouraged them to think about,” says Gordon, “is: don’t jump into it just because you think you need one, or that this is something you should do.  Focus first on why you want and need it.”

In the case of BlueStem, the firm was in the process of retiring its owner and founder Karen Folk and bringing in partner Jacob Kuebler as the managing partner.    “We’re also growing pretty fast and we realized that there were a lot of issues which, if done well, could really take us to the next level,” Gordon says.  “We wanted to hear from our clients because we genuinely feel that they’re the reason why we’re here.  What do they want to see and how can we approach these things?”  Among other changes, there was rebranding, a new marketing perspective and website, additional fee payment options and, for the first time, discretion over client assets.

Gordon, Kuebler and Folk looked at the client list, with an eye for a distinct and diverse perspective.  “It wasn’t our highest net worth clients,” Gordon says.  “But we definitely selected the people we most enjoyed working with, and that we felt like we were helping the most.”  In all, they picked ten clients from their three target niches: college professors, same-sex couples and late career pre-retirees. 

What did they learn from the exercise?  “Maybe the most shocking thing that came out of it emerged when we asked about our performance reports,” says Gordon.  “We were really surprised at how people were saying: I’m going to be honest; I don’t get it.  I’ve been a client for ten years and I’ve never understood these.” 

Since then, BlueStem has developed a simplified scorecard which reflects other feedback: that clients were more interested in being reminded of their goals, and seeing their progress toward achieving them.  “Instead of strictly performance reports, we now remind them of their goals and assess their progress,” says Gordon. “How am I doing on creating that bond ladder we talked about?  If I want to retire in ten years, am I on track?  Your estate plan hasn’t been updated in a while; let’s add that to the list for the next meeting.  We haven’t talked about your long-term care in a while—keeping those planning issues front and center.”

The firm also changed its primary message on its website based on feedback from the advisory board.  “We asked what was the benefit of working with us,” says Gordon, “and nobody came back with: it’s because you manage my money.  It was more around: you help me accomplish my goals.  You helped me retire at 55.  You help me live my best life.

Gordon says that HIFON is her primary resource for practice management information.  “I think one of the biggest things is simply having this amazing group of very talented smart people who are doing the same things I’m doing, where they can put so much information at my fingertips,” she says.  “There have been many times when I’d walk out of a staff meeting where somebody had posed a question, and my first response is: let me log onto HIFON and look real fast.  More often than not, there is something there.”

At the moment, Gordon is helping the firm research various options for financial planning software.  “You read in the articles about the features,” she says.  “But you log into HIFON and get feedback like: it doesn’t talk very well with Fidelity. Those are the kinds of detailed things you need to know.”

Bigger picture, HIFON is the only organization out there for operations professionals.  “In the financial planning industry, it can be kind of lonely being in operations,” says Gordon.  “So much of it is advisor-centric, which is fine.  But as a younger professional trying to grow and develop my role, I need resources to make me better and allow me to make my firm better.”

EOS experiences

When some HIFON members asked about the Entrepreneurial Operating System (EOS; best outlined in the book “Traction” by Gino Wickman), Kristie Clayton replied.  Clayton is “Integrator” (an EOS term) and Chief Compliance Officer at BCR Wealth Strategies in Birmingham, AL.  “I replied that we’ve been running on EOS for about five years, and it has been extremely successful for us, and has helped us grow and advance our company,” says Clayton. 

Since then, she has held ten individual calls with different HIFON members, answering their questions and talking about her experience.   

“I told them that EOS has helped us focus and share our vision, so that everyone knows what BCR is trying to achieve,” she says.  “People asked me what the implementation was like.  Was it easy to integrate it into the company?  It can mean looking at our operations scorecards for different departments to see if we’re on track and progressing.  Probably one of the biggest questions was: do I use an implementer or do I do it myself?  (BCR did employ an implementer.)

Clayton says that HIFON has been a hugely valuable resource for her and her firm.  “There is tremendous value in having peers together discussing issues,” she says.  “In this profession, there is very little available for the operations team outside of HIFON, where you have a network of people who are telling you what has worked for them from experience.”

Of course these discussions were pulled from hundreds of ongoing conversations, requests for information and feedback and conference calls.  But I think they give a taste not only of the value of HIFON membership, but also what operations professionals are thinking about these days.  Feel free to share this article with the operations members of your team, and consider joining their annual face-to-face get-together this fall at the Insider’s Forum conference.