The MCS mission to “Transform money from a source of worry to a resource for fulfillment” extends beyond “Managing Risk to Increase Wealth”. In times of crisis like today, we also want you know that making sure that MCS will remain operational and able to serve your needs is central to our commitment to you.
How MCS Built Operational Resilience
Long ago, I recognized the need to hire competent staff who would be able to support the business. In 2004, I hired Jeff Yamada, who’s experience in the investment industry included managing portfolio management systems, trading, custody, IT and operations for $5 billion institutional investment advisers. Since MCS operations are relatively simple compared to Jeff’s previous employers, Jeff earned his CFP® and his duties transitioned to financial planning and client advising.
In 2008, MCS employed Back Office Connection (BOC) to provide operational and IT support. This partnership gives MCS deep operational and IT redundancy and prevents interruptions in our ability to track and manage your investments.
At MCS, we assess our operational resilience and plan for contingencies when one of us may not be able to work for an extended period. Measures we have implemented include making sure both Michael and Jeff are able to trade in your accounts or move money on your behalf. Furthermore, each has access to the other’s email accounts and files. We work from home offices and are geographically dispersed (in Bend, Oregon and Norman, Oklahoma). In fact, we can work from any location with Internet access, and we strive to cross-train in as many of each other’s functions as possible.
In the worst-case scenario, and one that Jeff and I don’t like to think about, we have planned what would happen to MCS if one of us was incapacitated for the long-term, or even permanently. If I were unable to work, Jeff has full investment authority at your custodian, Charles Schwab & Co., Inc. (Schwab) and with our outside brokerage relationships. MCS is owned by my family trust, so contracts with vendors, insurers, etc. are not dependent upon my capacity. If something were to happen to Jeff, I have passed the CFP® exam and am able to provide planning advice to clients. Jeff has documented his procedures for creating trade allocations and his compliance duties can be outsourced to our outside counsel. BOC and I can back up Jeff’s tasks.
You should also understand that you retain control of your assets through your relationship with Schwab. Although you have delegated MCS the authority to make investment decisions on your behalf, you as the client always have authority to trade or move money in your account. You can access your account directly through Schwab Alliance 800-515-2157 if Jeff or I became unavailable.
Operational Support Partnerships
Our critical operational support partnerships are with Back Office Connection and Charles Schwab & Co., Inc. (Schwab). BOC is a full-service investment operations outsourcing firm. They host our IT infrastructure which allows us to work from any location with an internet connection. They also provide “warm” IT backup capability, which means that they can switch over to backup servers with little disruption in service. More importantly, BOC employs 13 operations professionals who are cross-trained to handle each other’s clients. BOC also employs two key tools that increase their ability to provide a “deep bench” of operational support: a task ticketing system that allows them to route tasks efficiently among their staff, and a procedure documentation system so that any staff member can execute tasks for any of their clients. Like MCS, BOC employees can work from any computer with an internet connection, and their employees are also geographically dispersed (though most live in the Pacific Northwest). In fact, during this crisis, all BOC employees are working from their homes as they follow social distancing recommendations.
Schwab is your custodian (holder of your investments) and our primary partner. Through Schwab Institutional web portal, we trade, move money, analyze investments, submit client service requests, complete account paperwork, view and request reports, upload and download trades, and perform other tasks for client investment portfolios. Schwab’s Institutional Services Group provides dedicated professionals to assist MCS in these tasks.
As I mentioned above, you may also call the Schwab Alliance Team (800-515-2157) and work with them directly, at any time.
Our plan for operational resilience is designed to react to new situations, such as the current crisis, and we adapt our planning and review it on a regular basis. Our ability to operate in times of crisis and disruption is another way we reassure our clients that we will be ready to help them even under the most trying situations. We are evaluating scenarios that may occur so that we prepare you to act early.
As always, we welcome your questions and comments.