5 Things Your Back-Office Staff Would Like You to Know

If asked how well you understand your business, you can probably boast how well you know and manage your clients. You can forever talk about how good you are at managing money and giving investment advice.

It’s great that you understand the front end of your business. What about the back-office?

The place that keeps your business up and running

The role of the back-office has evolved from an administrative role to servicing clients, processing information and managing the business. The back-office does not get the credit it deserves for your business’s success. This may be because you are not 100% sure what goes on back there. Here are 5 things you should know about your back-office.

1. “Operations Professional” is not an oxymoron

Gone are the days when “back-office staff” is associated with “administrative assistants.” Your staff probably comprises of college graduates and may have a CFA or CFP. They are the ones who enter your trades, understand the CRM, and know how to retrieve information from your portfolio accounting and reporting system. They are your interface to custodians, vendors, IT staff, and other service providers. Depending on their skillset, they may also serve as your Constant Contact writer, website designer, and PowerPoint expert. These employees need to be considered as an integral part of your firm.

2. It’s about the number of accounts the back-office is servicing, not the number of households you are managing

While it is common for advisors to talk about clients in terms of households, or families, the back-office must service each account. Your 400 households can easily translate into 2,000 accounts. For every one household, the back-office can be servicing a joint account, two IRAs, and three children’s trust accounts. Your software tools store data at the account level – data gets consolidated to the household level. Your staff ensures all transactions are handled properly at the account level – though the staff reports household level information to you.

3. Though not considered “rainmakers”, a good back-office helps keep clients happy

Servicing clients should be considered at least as important as bringing in new clients. However your back-office is structured, the goal is to ensure that client retention rates remain high. A good back-office staff may know more about your clients than you think and may be the first to sense a client’s pattern (i.e. recurring withdrawals). The staff should be included in developing ways to enhance client services.

4. When developing the firm’s work-flow processes and procedures, make sure they streamline the operations, not create more bottlenecks

Work-flow process is currently a popular topic for advisors (either through the CRM or other software). However, the built-in flowcharts, or procedures, may not be right for your firm. The steps may be too detailed or are not aligned with your firm’s organizational structure. If there are steps currently not being done, review whether they are necessary for compliance. If compliance is not a factor, review whether the additional steps will streamline the process or have the opposite effect.

5. Utilizing outsourcing services still require back-office review

Hiring outsourcing firms can ease the burden on your back-office and increase its efficiencies. However, a review process needs to be implemented so that their services are being monitored. The back-office also needs to ensure that all client transactions were properly executed (i.e. correct trades were placed), client information is correct, and reports are accurate. Clients will be looking to you for answers, not the outsourcing service.