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What's Keeping the Top BDs of 2020 Up at Night?

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IA: What’s been your broker-dealer’s greatest challenge due to the pandemic?

Lon Dolber, American Portfolios: Generally, for the last four years, the biggest challenge is cybersecurity and information security. When you go to digital transformation, you’re going to be allowing a lot more people into your world, and that’s a significant challenge.

We have roughly 115 employees, over 700 advisors and about 700,000 end customers. That’s a very big ongoing challenge — monitoring all these systems.

We’ve developed the ability for people to work remotely, but also for the end client to get into the client portal. This helps the advisor … but cyber/information security becomes a very big issue.

For monitoring, we outsource some of it to Secureworks for our whole network. For the network perimeter, you don’t control what the end customer is doing. … Your control is limited as you go further out.

We realized with all the work we’re doing that we needed the help of an outside company to monitor our systems and to deal with all the cloud alerts we’re getting.

If you’re in the cloud, you’re constantly getting alerts and you’ve got to analyze those alerts. But do you have the bandwidth and the resources to do it?

There’s also simple things like two-factor authentication. We instituted that some of the time, and we’ve centralized logins, etc.

Ryan Diachok, Geneos: Cybersecurity is a big challenge. But we’ve been on top of that for the past few years, to the point where we’ve been doing the remote monitoring of our advisors and home office [staff].

Like others said, we didn’t make a big announcement about our home office staff working from home. We had multiple advisors say to us, “If you wouldn’t have told us, we wouldn’t have even known you guys were primarily remote.”

There have been challenges with some administrative things that can’t be done remotely. We have a handful of employees rotating in and out of our office. I think we’ve done a good job of taking the proper safety precautions, and our employees have been very comfortable with how we’ve done that.

How are we going to do branch inspections? And there’s the issue of not being able to have conferences this year and have that interaction with our advisors. We have to … be more innovative in how we [do some activities and in how we] communicate and connect with our clients.

Dolber: What am I going to do with my 45,000 square feet [of office space]? Are we going to transform the way we think about going forward, as far as our physical plant?

We are. We’re going into a hybrid scenario where we’re going to allow employees to elect whether they want to go, with conditions and rules, and whether they want to work remotely. And I’m sure the regulators are going to weigh in on this.

John Burmeister, Lion Street: We have until March 2021 to get branch audits done.

Diachok: We’re lucky that we have in-house branch auditors and … a couple are in different parts of the country. We’ll work through it, and maybe FINRA will give a little relief on this.

Burmeister: Yes. Our compliance team has been doing branch exams during this time. We’re documenting what we’re doing and how we’re doing the examination and the interaction. The interaction with the offices has actually been quite comforting and has gone from a standard branch exam to almost business consulting, because they’re trying to find out the right ways to operate in the new environment.

This is a relationship business, so how do you communicate in today’s environment? The use of Microsoft Teams has been phenomenal for us internally. There’s a lot more FaceTime communication — you ping someone and do a visual call. The chat feature has been working tremendously, too.

When I look at the statistics for the usage of these kinds of systems, it’s just gone through the roof. That’s how we’ve been able to account for not having [real] face-to-face communications. It’s not just with our home office employees, but it’s also with our advisors.

We had to look at the security of Zoom meetings. That’s where we focused our training. Initially, we created a business resiliency center. We said, “Here’s how you conduct a meeting, so it’s secure. Don’t forget about lighting, and don’t show your ceiling fan.”

It was a lot of back to the basics around how to continue to meet with your clients, add value and operate in this new environment.

Around sales, we started posting ideas in this business resiliency center. We have an ownership-based model. We have the opportunity to [help] firms work with other firms.

If you’ve got somebody who has an opportunity in the executive benefits market, they tap into one of our owner firms that can help them subsidize a downturn that they had, say, in their assets-under-management business with a potentially new line of revenue based on the capabilities that we have within our other firm.

Amy Webber, Cambridge: There’s the saying, “Never let a good crisis go to waste.” We really used this [situation] to leverage where the gaps were, not from a processing or operational perspective, but in other areas.

Our advisors and our associates needed us to step up and communicate more. That was the gap we learned to address quickly. We started doing weekly webinars, Wednesdays with associates and Thursdays with advisors.

We walked through every decision our [business community planning, or] BCP committee was making about different investments. The biggest risk here was productivity — which went through the roof the first month, because no one stopped working or separating work from home.

We kept everybody employed, and lots of people had to figure these things out. It was just a constant Q&A with our 900 employees and our 3,000-plus advisors about what was going on, keeping our finger on the pulse, being positioned to pivot and making sure that we were [doing this] with the priority on health, safety and satisfaction — and bringing things together the way we needed to for our growth.

We proceeded with our internship program and brought on 25 interns virtually, … and we had to hire. We probably hired 25 or 30 people during the last four months or so.

This was because of the success in recruiting and the growth of many of our advisors, who’ve actually been making lemons out of lemonade and learning how to prospect in these markets. It created an environment in which we had to do more than figure out how to do the status quo.

We had to push hard and grow, and there’s nothing more intimidating. I’m hiring an executive right now. And you can’t hire them without meeting them, sitting across the table to see them.

With the whole onboarding of people and training them in the Cambridge way and culture, [the pandemic] gave us the greatest opportunities to figure out exactly how all that would work [remotely], if much of this [restricted situation] does remain.

Some of this [virtual arrangement] will stay. We’re probably not going back to the old-fashioned way.

Now, we have 700 of our 900 employees back in the office, rotating on a two-week basis. We have temperature kiosks, used by employees for admittance, and contact tracing badges. Everybody wears a mask. We’ve got Xs all over the floor and anti-bacterial hand cleaners all over the building floors, and we’re following the CDC guidelines.

But the huge positive of living in the middle of nowhere, is that we don’t have to deal with [things like] elevators. We were able to execute and work with everyone, and 25% of our employees begged us to let them come back to work.

As for the listening, communication and transparency, the feedback we’re getting now is “Please don’t stop the weekly meetings, even after all this is over. It has been awesome to see the executive team come to the table and talk to us every week about what’s going on. It’s actually been kind of fun.”


For a rundown of what the leaders of the 2020 Broker-Dealers of the Year think about the industry today and other topics, as well as a summary of the Runners Up, please click on these story links: