Outside voices and views for advisers

Why operations teams are the unsung heroes behind breakaways

It's operations that ensures the success of an advisory team's transition to the RIA channel

Sep 20, 2017 @ 1:10 pm

By Anna Maria Garcia

The breakaway movement has continued to gain headlines as more teams have make the leap to the RIA channel. Most articles surrounding recent breakaways tend to focus on how much assets the adviser has managed, the adviser's experience in the industry and the custodians and technology firms that may have assisted the RIA formation. What everyone seems to overlook are the vital operations teams that are toiling away behind the scenes to ensure the transition's success.

Operations personnel are accustomed to working in the background, forever supporting the success of a firm. That's not necessarily a bad thing; the role of an operations employee is to ensure the company remains properly functioning, but it's typically a thankless job. Think about it. The only time one offers feedback to operations is when something goes wrong. People tend not to take notice when things are running smoothly. Operations teams are used to working hard without recognition, and their required contribution during a breakaway's transition is no different.

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Advisers of breakaway teams are often lauded as heroes for their entrepreneurial vision and courage, but that vision is typically executed post-break by a supporting operations staff. Operations teams conduct research, build out the firm's infrastructure and educate themselves on the nuances of the newly independent world so they can answer their colleagues' and clients' questions. Once the team members resign from their wirehouse employer, it is the operations staff that is responsible for managing the paperwork process as they procure client information and fill out documents prior to submitting it to the custodian to open and transfer accounts.

While handling the brunt of operations questions, they must simultaneously rebuild processes, customize workflows in entirely new systems and educate the rest of the team on how to use each of these systems. Multitasking is a required quality to have as an operations employee, but that doesn't make it any less tedious. All the while, the adviser is the face of the firm and gets awarded press coverage and credit for the success of their RIA's transition.

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Once an advisory team resigns from their employer and launches their new RIA, all focus shifts to their clients. They often question exactly how to contact all their clients in such a short amount of time. Advisers worry how best to educate clients on the benefits of the independent space and how to best convey that all the products and services they were accustomed to at the wirehouse are still available to them at the RIA. They are most anxious thinking about transitioning assets efficiently, providing the same level of support and guidance through the entire process, knowing the message to the clients must be that everything will remain the same, but better.

Advisers need to realize part of that messaging to clients should include their most important (but far too often overlooked) asset of all: their operations team. The same team that has handled their clients' accounts for years will still be handling the same accounts at the new firm; Operations is here to take care of both the advisers and clients alike, just as they always have. Advisers must remember to take care of their operations staff during the time of transition. They should remind these key personnel on a regular basis how much they are appreciated and how integral they are to the new firm's success. While the advisers get the headlines and accolades in the press, we all need to realize it's the operations teams that are the true unsung heroes in the proliferation of assets transferring from the wirehouses to the independent space.

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Anna Maria Garcia is an analyst with PFI Advisors.


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