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Operations Community

The HIFON Network represents our profession’s first ops membership organization—and a great way to get answers and solutions.

Shaun Kapusinski, director of operations at Sequoia Financial Group in Akron, OH, is a former financial advisor who gravitated over to the operations side of the business and decided he liked it there better.  In fact, he became so passionate about the endless nuances or running an efficient, effective back office that he began organizing a comprehensive back office body of knowledge, similar to the CFP Board’s body of knowledge for financial planners.

In his spare time, Kapusinski also founded a private study group, similar to The Alpha Group, the Zero Alpha Group, Capstone, Blind Squirrels and other financial planning-related study groups, except exclusively related to operations professionals.

It would be an understatement to say that the study group, known as HIFON (High-Impact Financial Operations Network;, was successful.  At first it was a loose collection of people who were interested in comparing notes about what software others were using, and what workflows and procedures they had developed.  But as membership grew to over 100 professionals, HIFON evolved into an organized system of monthly group phone calls with rotating facilitators and a members-only discussion board where people could ask their peers what their experience was about any ops-related topic.

In  December, Kapusinski’s HIFON Network celebrated its seventh birthday, and at the same time it evolved once again, from the country’s only ops study group to America’s only ops-related membership organization.  Membership stands at 156 COOs and operations managers who regularly compare notes, pose questions on the discussion boards or make suggestions for discussion topics to be discussed in their monthly calls. 

There are presentations by key software and other vendors.  Since December, when the organization launched its upgraded discussion board, there are already 80 different ops-related topics under discussion.

“The purpose or why somebody joins is what it has always been: to be connected to a community of other operations professionals in the RIA industry,” says Kapusinski. 

Sharing Insights

How does it work?  The core of the service is the monthly conference calls, where HIFON members share insights and explore topics in depth.  “The membership is split into groups of 18-20 members,” Kapusinski explains. “There are usually anywhere from 8 to 12 people on each call, based on who can make it, and for each group there’s a volunteer facilitator who creates the agenda based on suggestions from the other members.” 

Every six months, these groups are rearranged more or less randomly, to keep the discussions fresh, although recently a premium service was added which allows larger firms to only be in discussion groups with firms of their size and scale.

What do the participants talk about?  “Anything and everything,” says Kapusinski.  Recent topics included: reducing employee turnover; the operations challenges of managing held-away accounts; the complications involved in custody issues; which client portals different firms were using and how they liked them; ways that members are soliciting client feedback (Surveys?  A rotating advisory board?); efficient communication of portfolio trades between the investment team and the planning team; a variety of CRM implementation issues and time-saving features that people might not know about; how to create key performance and efficiency metrics when managing an operations team; a variety of social media issues; how to better manage quarter-end workflows; issues associated with settling the accounts of a deceased client; best practices for collecting and recording client risk tolerances; how to manage the ops staff at a remote office; and training resources for operations associates (and what skills need to be enhanced with training to facilitate growth and movement up the career ladder).

During these calls, Kapusinski noticed a demand for certain topic-focused conversations; today, HIFON offers an every-other-month compliance-focused call, and is now hosting a small discussion group for people who run the planning department at their firms, who work on financial planning software.   “It’s about anything related to team-based financial planning,” Kapusinski explains.  “They’ll talk about rules and regulations as much as they’ll talk about the technology and how they use it, and about communications methods between advisors and clients and their team.   We’ve set them up with a separate discussion board as well,” he adds. “Planning forum, is what we call it.”

Discussion board

The other key benefit is the aforementioned discussion board, where members can quickly get answers to their questions about, say, software the firm is thinking about adding or changing, best practices for different back office activities or anything else that comes up—basically tapping the wisdom of the crowd on any issue where the firm needs outside guidance.

“We’re seeing daily posts, people putting things out there, daily replies and people can edit their notifications,” says Kapusinski.  “Some people want them to show up in their mailbox in real time, where they see it immediately, and others prefer a daily or a weekly or even a monthly digest,” he adds. 

These topics can be esoteric, like the COO who posed a question on temporary absence coverage.  “How do you make sure all the work is covered if somebody goes out unexpectedly on medical leave?” says Kapusinski. “What are people doing to make sure that doesn’t disrupt their operations flow?” 

Solutions can be very different.  In this thread, one firm offered specific cross-training protocols.  Another said it had a relationship with a temp agency that will immediately send somebody to handle rote work to free up more experienced staffers to fill in for the absent worker.

Another question related to held-away accounts started with the observation that they can use up a lot of staff time.  Do other firms have a full-time person handle these chores, or is the work distributed among several staffers who also have other responsibilities?  “Some people said that this is why their firms stay away from held-away accounts,” says Kapusinski.  “They realized that it was a lot of work and costing more money internally than it was worth.”

Other benefits

A third benefit is the ability to look at various data on HIFON members, which helps the COO/operations managers know who to go to when they have questions.  “When somebody joins, there is a survey they fill out that captures everything from how many employees they have, assets that they manage, their technology and the custodians that they use,” explains Kapusinski.  “The entry questionnaire asks about your CRM system, your portfolio management system, trading/rebalancing, planning software, billing software, accounting software, document management, risk analysis software, forms management software, compliance software, client vault, any research services, secure email system—all those things—so if I want to know something about software I’m interested in or I’m investigating a compliance service provider, I know who to call.”

In his director of operations role at Sequoia, Kapusinski is using this information for the benefit of his own firm.  “When we were contemplating a CRM change, I looked for a bunch of references through HIFON,” he says, “and was able to get a good cross-section of opinions from people who use different software programs.”

The HIFON Network has recently added additional member benefits, including one that might become extremely helpful to the membership: a jobs board for operations staff positions.  Kapusinski is also building a shared library of documents and templates.  “For example, there is the client data request list that one of our firms uses internally,” says Kapusinski.  “It includes cash flow and simple planning worksheets. 

Another document is a one-pager that asks clients to designate who advisors should be talking with or what should be done if/when the client gets to a state where they aren’t able to make their own decisions.  There are a lot of tools and ideas out there that can be incredibly valuable.”

The library also contains answers to questions that might be relevant to new members.  “In that folder, they might find that somebody asked the membership how much they’re paying for a particular role,” Kapusinski explains.  “What are these people called, how much are they paid, and how many people in the department do this?  Like, for example, the portfolio analyst role.  Or portfolio administrator.  It might be a role that nobody is currently playing,” he adds, “but you want to hire somebody on, and you’d like a job description and salary range.”

Is that all?  Kapusinski has begun negotiating conference discounts for HIFON members who want their staff to get outside training (including a discount to the annual Insider’s Forum conference, which hosts HIFON group meetings), and the private webinars have become increasingly popular within the group. 

“Those,” Kapusinski explains, “are hosted by somebody in the industry who either works for a company that provides a service to RIAs, like technology companies, or compliance or data security-related services.” 

Kapusinski has told the would-be presenters that HIFON members aren’t as opposed to a product pitch as they might expect.  “Our members want to know what they offer and what capabilities they have,” he says. 

But, interestingly, he’s found that the vendor or service provider is less interested in marketing than in feedback.  “They really want to have a conversation,” Kapusinski explains.  “They might spend 15 minutes on education, and then they’ll say: here is a problem that we’ve been asked about, and I’m curious to hear from you guys about what you want from us on that problem.  They want to listen and let people who are in the operations trenches tell them what kinds of projects to put on their drawing board, and it becomes this neat interaction.”

Purpose and cost

The overriding goal of HIFON is to raise the level of operations expertise across the profession by allowing the most savvy COO/operations managers to compare notes and brainstorm better ways of managing the hidden side of an advisory business. 

“People have asked me: am I providing the expert answer or the expert opinion?” says Kapusinski.  “Is HIFON providing me that?  I have always said: you are really joining a community of your peers,” he continues.  “You’ll find that the collective brain may be smarter than any one of us, and there are a lot of different perspectives that you might not have thought about, and a lot of experience that you may not have at your firm.”

Cost?  There are three levels of membership.  The “basic” level includes access to the discussion board, the vendor webinars, job postings and conference discounts, but not the conference calls.  The “core” membership level adds the monthly conference calls, plus access to the bi-monthly compliance discussions.

And then there’s HIFON Plus.  “The Plus level has one distinguishing factor: you are a billion dollar (AUM) firm,” says Kapusinski.

The “plus” level was added after Kapusinski was asked over and over again by certain firms whether they would be talking with other firms of their size.  “They would say, we are a $1.2 billion firm,” he says.  “Or: We’re a $4 billion firm, and we probably would rather have conversations with firms similar to our size rather than the $400 million firms.  So HIFON now charges a premium for being more exclusive in the conference calls. 

Basic membership costs $400 a year.  Core costs $600 a year for the firm.  Plus is priced at $800 a year.  “The price seems not to be the issue for membership,” says Kapusinski.  “If they get the value that we’re providing, then it pays for itself pretty quickly.”  In his experience, America’s ops membership group tends to attract people who have the same passion for operational excellence that he does.  “People who join HIFON will often say, I’ve found my tribe,” he says.

Bigger picture, he adds, there has been a gap in the industry for operations professionals to educate each other and trade ideas and compare notes.  “We need a community that we can go to,” says Kapusinski.  “It’s a component of being a good professional in this industry, where there are so many changes and new opportunities and new ideas being developed.  I think we are providing a solution to that.

“The more I can do to push this effort, and bring insights to operations professionals at their office, and access to people they can network with on a daily basis at any given time at a fraction of the cost of a conference—we should,” Kapusinski says, “be finding a way where every firm has something like this.”