BUILDING YOUR SECRET WEAPON: THE SIGNIFICANCE OF A DYNAMIC OPERATIONS TEAM

FPA-DFW 2017

Shaun Kapusinski

Sequoia Financial Group

Thursday, May 11, 2017

Who’s In The Room?

• Advisors/CEO

• Operations/COO

• Compliance

• Technology

• Portfolio/Research

• Other

Why I’m Here

1. Managing Director of Operations @ Sequoia Financial Group a) 60 employees

b) 4 locations

c) $3 billion AUA

d) Joined in 2003 i. 10 –ees

ii. $100 million AUM

2. HIFON a) Network of operations professionals

3. To make the case for investing in and building a solid operations team

“Ultimately, the holy grail of operations is not the best technology but the inspired leadership of an experienced and dedicated chief operations officer (COO), supported by a talented team of operations specialists. Currently, the biggest weakness in advisory firms is the lack of leadership and a career track in operations. Turnover is high, and the price of experienced talent is increasing. With their energy focused on client relationships and business development, principals rarely have the time or direct experience to devote to operational issues.

* Mark Tibergien & Rebecca Pomering in Practice Made More Perfect

Why Would We Care? Should We? Do We?

• Efficient, Effective Systems • Provide clients with a seamless, enjoyable experience

• Comfort • Consistency

• Make employees as productive as possible • Focus on the correct actions • Documented systems make it easy to train and also adjust

• Build tangible value in your business • Equity is built in the systems themselves

* Building A High-End Financial Services Practice by Cliff Oberlin & Jill Powers

Starts with a Vision, with Leadership

• Practices of Exemplary Leadership

• Model the Way

• Inspire a Shared Vision

• Challenge the Process

• Enable Others to Act

• Encourage the Heart

The Leadership Challenge, Kouzes/Posner

http://www.leadershipchallenge.com

Service Standards For Your Firm

• Why are we in this business?*

• Why do prospects come to us?*

• Why would you want to work here?*

• What does quality service mean in each role?

• Healthy organization is made up of health members

• Commit to your core values

* “Start with Why” by Simon Sinek

https://www.startwithwhy.com/

For Sequoia, that means…

• Trust

• Planning Approach

• Team Based

• Invest in Long Term Relationships

• Independence

For Our Service Team, that means…

• We are here to serve others.

• Clients first, advisors second, team third, me last.

• Think objective, not just task.

• Do all things right the first time.

• Every little thing matters.

• Display professionalism.

• Exhibit politeness.

• Strive for perfection.

Your Talent is Your Team

• Growth mentality – find those who think, act and behave with this mindset

• History of results: what matters to them relative to Client Service?

• Hiring the right people • Jim Collins, Good To Great

• Get the right people on the bus, then in the right seats, and the wrong people off the bus

• Eric Herrenkohl, How to Hire “A” Players • Thriving teams are built by hiring & keeping A-players

• Hiring A-players needs to be a business priority

• Always be talking to people to consider hiring www.howtohireaplayers.com

Culture of Innovation

• Who’s in charge? Who’s making the decision?

• Who’s up for change?

• Who’s with me?

What Got You Here…

http://heathbrothers.com/

Building Your Team

• Hire Experience or Grow Your Own?

• What works? • Your investment

• Your involvement

• Flexibility

• What doesn’t? • Island experiences (Isolation)

• Wild Wild West

• We’ve always done it that way

Importance of Ops team structure

1. Silo practices • Pros: Advisor-centric; things done the way each advisor wants

• Cons: As you grow, becomes increasingly inefficient

2. Centralized team • What all is included?

• Pros: Process-centric; approach to clients is standardized with established protocol for every step

• Cons: Could be costly if you are not big enough; could lose benefits of knowing relationships well

Importance of Ops team structure (con’t)

3. Teams/Pods • Pros: Client-centric; better the more complex your client’s lives are; more customized

service based on knowledge of each client; dedicated staff

• Cons: Could be costly if it drives you toward too many customized approaches to serving a similar client base

4. Geographic (if multiple locations) • Pros: similar to Team/Pods; comfort for advisors

• Cons: risk of dissimilar service offering is high

What Do You Want Your Clients to Experience?

• How to run your ops is hugely impacted by your decisions on the agreed upon Client Experience

• Are all clients expected to be tech-savvy?

• Does everyone receive on-demand, concierge-style service?

• Will you segment your client base, and service them differently?

• Are you big enough to have departments, to split up & segregate work?

Training

• How will your team learn / get better / improve? • Define the client experience: Client Experience Calendar*

• Work together on what it will take to get there

• Educate: • Registered ParaplannerSM

• CFP®

• CIMA ®

• Others?

* Source: Angie Herbers & Kristen Luke’s White Paper – “X-Cell: The New Frontier of Advisory Client Service”

Training @ Sequoia

• Sequoia University • Classes designed to teach not only the industry, but our firm / culture /

process / way of doing business

• Regular meetings to train • Use time each week to help each other out – share experiences, teach new-

found knowledge, warn against mistakes made & how to prevent them

• Staff Meetings • Sharing success stories

Tribes

• Seth Godin, Tribes: A tribe only needs a shared interest and a way to communicate; they are connected to an idea, a leader, and one another

• Bob Veres – the planning profession has tribes; defined by their organizations, FPA, IMCA, NAPFA, AICPA PFP, SIFMA, FSI

• Sheryl O’Loughlin, Killing It!: gathering together with like-minded people experiencing the same thing (“tribe members”) is healing and uplifting

• Nothing is off the table

• Views from a fresh perspective

My Tribe

• HIFON • Overview

• Some benefits of joining your tribe 1. Take the blinders off & listen

2. Commiserate & counsel as needed

3. Share your expertise

Topics From Recent HIFON Calls

• Staffing the Operations Team • When to add; Measuring capacity; Who does what

• Employee Structures • Teams, Departments, Groups

• DOL Rule Compliance preparation • Checklists? Change of procedures?

• Trading Procedures • Who executes on your team? What is the process?

• Client Acceptance Process • What are the targets? Clearly defined? Process to approve/accept new clients?

HIFON Shared Documents

• Incapacity of Clients

• Deceased Client Checklists

• Job descriptions

• Maternity leave policies

• Vendor Confidentiality Agreements

HIFON Discussion Threads (Questions Asked) • Does anyone use a program to automatically attach email signatures

and/or disclaimers?

• Anyone out there using Collegiate Funding Solutions?

• Does anyone use a secure email service/add on?

• Does anyone use HubSpot, or work with a digital marketing company for inbound marketing?

• Has anyone done a client journey map or incorporated how you provide an outstanding client experience into your operations manual?

• Our firm is trying to make the decision between using Worldox or Laserfiche for electronic document storage. Has anyone used either and what can you share with us about what you like and don't like with each?

12.5%

12.5%

12.5%

12.5%

12.5%

12.5%

18.8%

18.8%

18.8%

31.3%

31.3%

37.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

TEAMWORK

EFFICIENT USE OF TECHNOLOGY

HIRING THE RIGHT FIT FOR YOUR FIRM

STRONG CULTURE / COMMON VALUES & BELIEFS

STRONG LEADERSHIP

INNOVATION

EVERYONE KNOWS THE BIG PICTURE

ACCOUNTABILITY

CAREER PLANS

DEVELOPMENT/TRAINING OF PROFESSIONALS

EXCELLENT COMMUNICATION

DEFINED WORKFLOWS AND PROCESSES

Keys to a Strong Operations Team

6.3%

6.3%

6.3%

12.5%

12.5%

12.5%

18.8%

18.8%

18.8%

18.8%

25.0%

56.3%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

ALLOW US TO KEEP A LEAN TEAM

FEWER ERRORS

CREATE AUTOMATION OF REPEATABLE ACTIVITIES

WEAK TEAM PULLS OTHER RESOURCES DOWN

STRENGTHENED RELATIONSHIPS WITH CLIENTS

ADVISOR CONFIDENCE IN DELIVERY OF SERVICES

FOUNDATION OF THE BUSINESS

ESTABLISH EFFICIENCIES

IMPROVEMENT OF THE CLIENT EXPERIENCE

CONSISTENT EXECUTION OF SERVICES

SCALABILITY TO GROW

LEVERAGE ADVISORS/OWNERS TIME

Business Impact of a Strong Operations Team

Ideas For Objectively Determining Productivity

• David Lawrence in The Efficient Practice • Leveraging an advisor’s time

• Lower Costs + Higher Revenue = High Profit (staff doing back-office activities) + (advisor spending more time with clients & prospects)

• Have advisor metrics (or firm goals) tied to staff incentives • Use specific, objective performance criteria

• On-time completion of tasks

• Accuracy

• Error-free work

How do you assess the performance of your operations staff?

Rewarding Your Team • Verbal appreciation

• Public recognition (“The Redwood Award”)

• Quality time together (listening, showing interest)

• Tokens of appreciation

• More education

• Conference attendance

• Cash bonuses

• Dan Pink, in Drive • Autonomy • Mastery • Purpose

Greatest Risk?

• Talent retention and development* • Does growth cause us to lose focus?

• How to combat? • Conscious training strategy • Continued emphasis on firm values • Regular performance evaluations

• Benefits to both parties

* “The Enduring Advisory Firm” by Mark Tibergien & Kim Dellarocca

In Closing: Malcolm Gladwell

• The Numbers Game (soccer vs. basketball)

• Weak link vs Strong link improvements

• Why don't we make the transition to weak link?

• Same goes for our industry • Our vulnerabilities are with lowest level employees: not just security, but

service

• Gladwell says we're moving to a soccer type world

Questions?

Thank You