Unleashing the Value of the Entire Team


How does your office team think? The investment management support office is often synonymous with bulk processing. It has traditionally been viewed as a procedure-laden, compliance driven machine. And depending on the efficiency and recency of the support office process design, many investment management support offices are legacy-laden. This is particularly true in the retail world, but I find it is often true across the investment management spectrum. And most of the time it’s not until an investment manager reaches the tipping point where cost growth threatens to exceed revenue growth that the support office comes under scrutiny. What a shame! The human potential, creativity, and collective experience of most investment management support offices present a gold mine of opportunity for investment managers.

In his 2015 book Humans are Underrated, Geoff Colvin, Fortune magazine’s senior editor in charge, talks about the profitability impact of business’ human assets, using Southwest Airlines in the following example excerpted from his book.

This company succeeds in one of the world’s most miserable industries. All three of its largest US competitors – American, Delta, and United – have gone bankrupt at one time or another, in some cases more than once. Yet Southwest has earned a profit in each of its forty-plus years of existence. It prospers because, as its managers have always understood, it knows the value of human interaction externally and internally…

The ability of employees to engage customers with humor, energy, and generosity is crucial to creating value in an experience that is not, on its face, all that appealing. This is an airline that won’t give you an assigned seat, serve you a meal, or transfer your luggage to or from other airlines. But when you’re dealing with nice people in a good mood, somehow it’s okay.

So how does this translate to the world of investment management? Here’s a perfect example, from a firm with which I’ve been in relationship for several years. Employee-owned and operated, everyone at the firm is vested in growing the business. Growth benefits all, so sharp eyes and minds critically assess whether tasks make an impact on growth. When faced with new challenges or inefficiencies, team members seek and find solutions. It may be to leverage technology, to re-jigger an existing process to overcome the new challenge, or to find someone else to provide the service. What these motivated and creative support office team members know is that the firm may only have $80,000 of a $5MM client’s wealth. And with outstanding service, such as personalized reports, smart presentations by the portfolio manager, and compelling investment intelligence and commentary, the support office can actually impact the client’s experience and help the manager to gain more of the client’s wealth.

FundFire published an August 2015 article by Danielle Verbrigghe about sponsor firms seeking boutique money managers to round out the sponsors’ separately managed accounts offerings. But the boutique managers, once they get onto sponsor platforms, spoke of their difficulty in getting advisors’ attention. Verbrigghe’s article suggested that building relationships with advisors, such as attending road shows, providing advisor education materials, and generally being available to assist the advisor with investor relationships, are all strategies leading to successful asset growth.

Now isn’t the access to information, collective experience, and human creativity of the support office team perfect for these types of activities? When investment managers apply technology to the rote and repetitive challenges of the support office and use expert partners to offload tasks, the entire team is freed to focus on tasks requiring their uniquely human skills, solidifying relationships with clients and contributing to a firm’s success in a way that brilliant machines never will.

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