Small Cap Firm Reduces Errors to Support Growth



A $2.3B institutional Small Cap manager's great performance record suggest that growth was on the horizon. However, they had experienced some unforced errors in the trading and operations departments

They asked ReGroup how to best strengthen the firm’s back-office infrastructure, support anticipated growth, and reduce the risk of errors and delays.


ReGroup reviewed relevant documentation detailing the firm’s existing trading and operations operational processes, IT systems, team organization, and past errors to assess the state of the firm’s back-office operations, and we interviewed key stakeholders about processes and error detection protocols.

ReGroup’s assessment found that the operations and trading departments relied heavily on the institutional knowledge residing primarily with a single long-term employee, who utilized a stale set of unshared notes in lieu of written procedures.

ReGroup also noted that as client types, employee roles, and products had evolved over time, process information was shared orally, making it difficult for others to understand processes enough to thoughtfully edit them; training new employees was ad hoc and inconsistent.

ReGroup also found that because areas of responsibility were fluid, senior management defaulted to assigning responsibility for errors to the ‘team’ and could not specifically identify or correctly resolve the actual sources of error.

  • In order to help ensure accurate and timely execution of critical process related to trading and client services, ReGroup recommended the following:
  • Codify trading and operations procedures into a written, shareable document;
  • Use the document to train new operations and trading hires that were in the pipeline;
  • Assign responsibility for assessing and maintaining processes on a risk priority basis, including a plan to continuously improve processes as the firm’s business or client expectations change;
  • Better define roles and responsibilities; and
  • Use the written procedures to help identify the sources of errors, and modify the procedures to help ensure that errors were not repeated.

Working closely with the trading and operations team, ReGroup identified, collected, and memorialized the firm’s trading and operations procedures.  In order to stay on time and on budget, we utilized a project management system to schedule and assign interviews, drafting, reviews, and revisions. We conducted one-on-one interviews and system walk-throughs with each member of the trading and operations team in order to collect and produce a cohesive set of twenty-six written procedures for processes related to governance, GIPS composites, client management, investment support, portfolio compliance, trading, and the firm’s WRAP program. Deep insight into the trading and operations team’s relationships and workflows informed ReGroup’s recommendations for enhancing workflow efficiency and creating processes around areas lacking sufficient workflows.


Clear instructions in the form of written desk procedures set formal expectations for the team’s collective success and provided a path for improving upon existing workflows and developing new processes. Traction was immediate - the firm used the procedures to onboard new staff, who immediately started suggesting improvements to support client service, efficiency and error avoidance. Executives were more confident in accommodating suggested use of technologies and streamlining, and avoided excess hires. The shared procedures continue to support ongoing transitios within the team, and control the quality of key trading and operations processes. 

ReGroup’s assessment gave our senior management team greater insight into the needs of our trading and operations teams, and the resulting procedures provided an elegant way to reduce our historical over-reliance on a single experienced employee. The resulting error management has given us all more confidence in light of pressures that growth puts on operations and trading.
— Daniel H., Director of Operations