Managing a Performance Department

Frances Barney, CFA
BNY Mellon Asset Servicing

Editor’s Note: In addition to setting policy and resolving complex technical issues, managers of performance departments face challenges in recruiting, training, motivating, evaluating, and retaining qualified personnel. This article explains how one large firm staffs and manages a global performance measurement operation. We will present other firms’ solutions in future issues of the Investment Performance Measurement Newsletter.

BNY Mellon Asset Servicing is one of the world’s largest providers of performance measurement, analytics, and attribution services to fund sponsors, investment managers, and consultants. Approximately 700 people are dedicated to our Performance & Risk Analytics services worldwide and support more than 1,900 clients.

With such a large group, we have found that specializing roles within the department allows us to provide efficient yet personalized service. Operational tasks, such as vendor data collection, are concentrated in global centers of excellence that support all clients, and service functions, such as personalized training, are organized locally into dedicated client teams. The two roles that interact most directly with clients are performance analysts and investment analytics consultants. The primary goal of both roles is to provide excellent client service.

Performance analysts are essentially responsible for auditing rates of return and working with clients to resolve any inquiries about their performance data. Effective client service in this role requires accuracy, timeliness, and responsiveness to client inquiries. Detailed knowledge of the flexibility available in our automated performance calculation systems enables performance analysts to work efficiently with clients to provide meaningful performance measures in a time frame that supports the client’s reporting process.

Managers work with associates to set goals on a yearly basis that include functional job performance as well as training on relevant products and systems, client servicing, and other job aspects that foster career growth. “We want our performance analysts to understand what they need to do in order to achieve promotion,” explains Suzann Giarusso, regional manager of performance analysts in Everett, MA. “The ability to acquire new knowledge, grow within the department (or company), and receive recognition for a job well done fosters a positive work environment, leading to successful client servicing and employee retention.”

Investment analytics consultants are responsible for adapting our Performance & Risk Analytics reporting tools to each client’s investment process. Effective client service in this role requires understanding the client’s investment strategies as well as having detailed product knowledge appropriate to support the client’s preferred investment process. Building consultative relationships with clients enables us to personalize the services to match the needs of our clients.

George DeGroot, CFA, regional manager of the investment analytics consulting group in Tacoma, WA, describes the ongoing approach to reinforcing product and industry knowledge. “We often set aside time for internal presentations so our associates can share information and refine their presentation skills. This approach works very well and ensures that our resident experts on a given product or investment topic have an opportunity to share their experience with peers in a friendly, nonthreatening environment.”

We are fortunate to have relatively low turnover, but when we do have open positions, we are able to consider candidates from internal sources through our Career Opportunities Program and from external sources through candidates recruited by our Talent Acquisition Division. We work hard to select the people who will be motivated by satisfying clients. At BNY Mellon Asset Servicing, the departments that most often provide candidates for Performance & Risk Analytics positions are accounting, client service, and investment management operations. We also recruit externally through the CFA Institute JobLine as well as through local CFA society websites. In addition to general investment knowledge, we look for strong communication and client service skills. Communication skills are particularly important in all areas of Performance & Risk Analytics because of the importance of coordinating across multiple departments and clearly presenting analysis appropriate to the clients’ investment processes.

Clients tell us directly that they value a skilled Performance & Risk Analytics client service team, and we invest in training for our associates along several different dimensions. The goal of this training is to develop specific job skills, product knowledge, and industry awareness as well as the “softer skills,” such as communication and presentation skills and being able to provide consultative solutions to clients. We provide a core curriculum to enhance the skills of all associates and identify specific additional training aligned with individual development objectives. We take advantage of training offered through The Bank of New York Mellon’s Corporate Learning and Development Group, and we have a tuition assistance program to encourage our associates to pursue industry training, such as a CFA charter or CIPM designation or CPA or MBA programs. Our tuition assistance program provides full tuition reimbursement for any job-related courses that may be required as part of an associate’s higher education goals.

We have also developed internal knowledge management tools to identify and share client best practices. Large, cutting-edge institutional investors are constantly evolving their investment ideas, and serving these dynamic clients gives us a view across multiple asset classes and investment strategies. According to Connie Tackett, CFA, investment analytics consulting regional manager based in Pittsburgh, PA, “Clients want to know ‘what do other clients do,’ so presentations on client scenarios help distribute topical examples across the department so the investment analytics consultants can share best practices with their clients.”

Ultimately, the service we provide is only as good as the people providing this service, and with the broad range of our product set, it is critical that we minimize turnover and retain our best talent. As a result, we have used various techniques to keep associates engaged. In some cases, we have created hybrid roles for associates demonstrating aptitude in a particular area, such as product development initiatives or particular client segment support. In other cases, associates have the opportunity to participate in research projects to further our thought leadership goals in the industry.

For example, a recent BNY Mellon Asset Servicing thought leadership white paper identified best practices in reporting returns for private equity from the institutional investors’ perspective, published during the summer of 2008. Guy Holappa, CFA, regional manager of the investment analytics consulting group in Everett, MA, co-authored this paper with a cross-functional team from Performance & Risk Analytics, which developed the initial research. Such thought leadership opportunities serve several purposes, including motivating and rewarding the associates who participate in these projects with additional industry training and visibility as well as enhancing our ability to provide value-added consultative services to our client base.

Our job structures and development opportunities provide a challenging and rewarding work environment and enable us to offer career paths within our department or ones that span to other departments and divisions. We recognize outstanding achievement whenever possible and have a variety of formal and informal approaches for recognition. Managers and peers can nominate associates or teams periodically for different kinds of achievement awards presented publicly by senior management.

We make a point of asking our clients for candid feedback and incorporate this feedback into our associate performance appraisals at year-end. This demonstrates to our clients that we care about what they think and also provides a good feedback mechanism for the teams directly supporting clients. We factor the feedback on client satisfaction received through formal and informal surveys into annual compensation decisions.

Selecting the right people, providing a challenging and rewarding work environment, and ensuring employees have opportunities to develop within their current role and for future career paths are the keys we use to attract, retain, and develop the talent we need to maximize our ability to add value to the investment processes of our clients.