8 1/2 steps to Successfully Outsource FINOP’s

Considering the cost saving strategy of outsourced FINOPs? Follow sound practices of broker dealer firms that are doing it successfully.     outsourced FINOP

Brokerage firms these days are faced with ever-more complex regulatory demands and deadlines, coupled with the risk of higher fines and disciplinary action than ever before. Read our blog post: SuperSized Fines 2014 . As the landscape becomes more difficult to navigate, many firms are finding the cost of a CFO with the expertise to handle their business needs is beyond reach. It’s simply much more expensive these days to run a brokerage firm, and cutting costs wisely has taken a front seat.

For broker-dealers looking to outsource the FINRA required financial and operational responsibilities, we’ve compiled this list of considerations to help guide in hiring the right firm for the job.

1)      Know the rules. US broker-dealer firms are required to onboard a FINRA series 27 or 28 professional. The Series 27, Financial & Operations Principal (FinOp) is able to perform mandatory financial and operational functions for Brokerage firms. Series 28 licensee’s are limited by NASD rule 1022.

2)     Research the outsourced FINOP firm: Take FINOP services seriously and seek only industry qualified firms. Broker-Dealer firms have special FINOP needs, so stick to industry seasoned professionals. Look for a firm that has been in business a long time with seasoned professionals who may hold complimentary series and industry licenses, beyond series 27 or 28.

3)     Investigate.  Look up their track record on FINRA BrokerCheck database by checking for regulatory events and other incidences. How many BD firms are they registered with? Are there any recent disciplinary incidences?

4)     Hire smart. Does the FINOP have the right experience? Ask about the types of firms the FINOP service handles. Do they have industry specialties and knowledge beneficial to your firms’ growth strategy? What size BD firm can the FINOP usually handle?

5)     Hire what you need. Are there levels of FINOP support? Does the FINOP have resources to serve as the designated licensed professional on record with FINRA, responsible for supervising financial and operational needs?

6)     Will the FINOP perform back-office needs as well? Back-office support includes tasks such as; payroll, accounts payable, bookkeeping, accounting, tax returns, staff training, which may be needed in a pinch at some future time. Also, does the FINOP provide regulatory compliance consulting and support as needed? Having multiple resources all in one place can add convenience and integrated solutions to fit your growth pattern.

7)     Outline the duties the FINOP shall assume: Make sure there is clear written understanding between yourself and the FINOP as to what the FINOP is expected to do. Example; keeping books and records; preparing monthly financial statements; computing net capital needs; filing regulatory reports – FOCUS, SSOI, SIPC, and more; interfacing with auditors and regulators.

8)       How will the FINOP interact with your company: Will work be done on-site, remotely, or a combination of both. How often can they visit on site?  Is the FINOP easily accessible by phone, email, or instant messaging?

8 1/2)  How much will it cost or save the firm to outsource FINOPs: Compare the dollar cost of an outsourced FINOP with the salary and benefit package of a full time, qualified CFO. Outsourcing the role can add a layer of access to higher-level talent than your brokerage firm may otherwise be able to afford. Aligning yourself with a FINOP service that grows with your firm and provides additional services as needed can be a smart strategic decision.


In providing a quote for outsourced FINOP services we will discuss with you the issues and opportunities that you tell us are most important for you, including how Strategy, Human Capital, Competition, Technology and Risk impact your top and bottom line performance. Then we’ll customize a fixed fee solution that fits your needs. Request a quote or ask us for more information about how outsourcing the FINOP role can reduce audit costs and improve operations.

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RND Resources Inc is fully integrated with all the services and support you need to successfully manage business planning, compliance, operations, trading, and registration. We can efficiently mange regulatory and accounting requirements for broker-dealers, investment advisers, hedge funds, municipal advisers, commodity trading advisers, and futures commission merchants. Call (818) 657-0288 for details.



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