December 7, 2021

Why an Operations Specialist Should Be Your Next Hire in 2022

Written By Charesse Spiller

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Let’s dig into why operations management and administration often isn’t a priority in the financial services industry, and how advisors can take steps at year-end to positively change this in their firms.

In many industries, having an operations expert on staff is one of the first priorities for most business owners. Whether that’s a COO or an operations manager, having someone available to manage the day-to-day and level up their business is critical to ensuring things run smoothly. 

However, this isn’t always the case in the world of financial planning. In fact, most firms hire associate advisors, paraplanners, or other client support professionals before bringing in an operations specialist. Unfortunately, this has a dramatic impact on the business’s ability to run efficiently. Let’s dig into why operations management and administration often isn’t a priority in the financial services industry, and how advisors can take steps at year-end to positively change this in their firms. 

Why Is Operations Not a Priority?

The truth is that in the financial planning profession, emphasis is often put on the advisor track career path. Most resources and continuing education available are geared toward advisors, and most people who come into the industry stick around to eventually become an advisor at a larger firm, or to start their own practice. This is, in part, because operations (and other non-advice career paths) are often viewed as non-revenue-generating. 

In the mind of a firm owner, more advisors or client service professionals mean a higher level of service, more clients served, and more gross revenue. They’re not wrong! Having a strong client service and financial advice team is critical to growing a long-lasting practice. However, having a client-service-heavy firm also means that nobody is solely focused on helping the business itself run well. Even the most detailed and high-touch financial planning services fall apart without a back-office staff to focus on the business operation. This can lead to low productivity, a nosedive in profit, and a variety of other problems – including dissatisfied clients. 

The Benefits of Focusing on Business Operations and Administration

Firms who have a dedicated operations or administrative position in their firm reap a number of benefits. In fact, I often recommend that this is the first (or next, if the firm is already sizable) hire a financial planning practice makes. This person can be either a COO, an office administrator, or an operations manager or specialist. Let’s look at some of the benefits of having an operations-focused employee on your team.

Higher revenue. When an advisor doesn’t have to step out of advice, client touch points, or sales, the firm thrives. Advisors can invest their time and resources into developing cutting edge skills, and leveling up their ability to serve clients on a deeper and more engaged level. At the same time, operations specialists on the team can lean into learning more about technology, streamlined processes, workflows, and more to create a scalable business model. This frees up time, energy, and resources to help the firm grow financially. 

More responsibility is given to team members. When team members are allowed to dedicate time and energy to focusing on the business operation, they’re able to improve processes, technology, and hone their craft. This empowers them to take the lead on a number of tasks that may be distracting or burning out an advisor who only wants to be client facing. In other words, the initial operations projects you tackle are just the tip of the iceberg. Employees will continue to lean in and improve the business in ways a lead advisor doesn’t have time to imagine or implement.

Better relationships with vendors. Firms with a dedicated back office employee or operations specialist often have a better understanding of their tech stack, and a positive relationship with their technology vendors. They can identify pain points and search for solutions. 

Improved client service. Firms who have a dedicated operations professional are more likely to follow through on client service calendars and requests, and ensure all clients are on track. An operations specialist can also help to add additional client touch points that enhance your relationships, such as streamlining billing or performance reports, sending holiday gifts, and reaching out proactively to schedule review meetings.

The Downfalls to Not Having an Operation Lead on Your Team

Although it’s hugely beneficial to have an operations lead on your team, many advisors argue that it’s too expensive, or that their firm is doing fine without someone in that role. I wanted to take a moment to highlight a few key pain points and problems I see firms of all sizes and tenure run into when they don’t have an operations specialist on their team. 
Technology problems drag on. Often, when there isn’t someone dedicated to managing a firm’s technology and processes, tech issues are never resolved. Firm employees panic when something breaks or goes wrong, and nobody is entirely sure how to fix it. Usually, the person who winds up taking charge of the situation is the firm owner who implemented the technology systems in the first place – and they don’t have the time or energy to dedicate to the project. Alternatively, tech pain points that are low-level irritants, but still hinder the firm’s productivity, are never addressed. The firm continues to operate with technology that isn’t benefiting them or their clients, and productivity and profit both suffer.

The client journey is reactive. Advisors who don’t have a back office or operations support employee are often just getting by, or barely staying afloat, when it comes to serving their clients. Without someone streamlining technology, workflows, and processes, advisors are stuck maintaining the entire client service machine – something that’s both time consuming and energy-draining when combined with their standard duties as an advisor. 

The client journey is non-existent. Worse still than having a reactive client service model is having a client service calendar that isn’t being executed at all. There are times when firms without a dedicated operations professional don’t provide clients with a service calendar at all. They may justify this because their services are high-touch and don’t fall into a standard calendar. However, the root reason is often because they’re concerned they will overpromise and not be able to execute effectively as their firm scales. It’s important to have a calendar in place to clarify the relationship between your firm and your clients, and to offer a clear picture of what they’ll be getting by working with you. An operations specialist or back-office support person can help organize this, and ensure that all current and future clients have a clear understanding of the work you do and accurate expectations for your services. 

Advisors hit capacity more quickly. When an advisor is pushed to do non-advice-driven tasks, they’re much more likely to hit capacity. Every day, they have to choose:

Am I going to work on the business, in the business, or manage my team? 

An operations specialist can help to free advisors up to do what they do best, and to help scale and grow the firm according to their goals.  The operations manager can then focus on ensuring those new clients and current clients are receiving exceptional, standardized services across the board – all without missing any of the key logistics that come with running the firm (think: technology onboarding, scheduling meetings, etc.).

How Should This Impact Year-End Planning?

As we close out the year, spend time reflecting on where your business is, and whether or not an operations-focused employee would positively impact your clients and your team. A few ideas for making this decision might be:

  1. Getting feedback from existing team members on how the business is run, and whether they think certain tasks should be delegated.

  2. Tracking both your time, and the time of your team members, to better understand where you spend your energy each day.

  3. Connecting with a business coach to identify how your operations can be enhanced, and whether an operations specialist or manager of some sort would benefit your business as a whole.

Remember – not all operations specialists need to be full time! Having a part time operations assistant or manager can often do the trick for smaller firms who need to delegate a set number of tasks each month. Starting small is better than not starting at all. During your 2022 planning, consider what type of operations support you may need and whether that person can be an outsourced provider or an in-house operations manager. Either way, finding the right fit will drastically improve your business and your daily life in the new year. 

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