CXO Series – Declan O’Beirne shares his insight about leadership along with challenges and innovation in broker-dealer firms
Declan is a seasoned financial services professional most recently vice president and CFO of John Hancock’s broker/dealers in the US, including Signator Investors Inc., John Hancock Funds LLC and John Hancock Distributors LLC. In addition he served as the CFO of two of John Hancock’s distribution companies, Signator Insurance Agency, Inc. and John Hancock Financial Network. Declan is a graduate of the University of Alabama at Birmingham, he holds a B.S. degree in Accounting and holds a FINRA 27 license. Declan has been named to Irish American magazines “Top 50 on Wall Street for the years 2011, 2012 and 2013”. Born in Ireland he now lives in Tampa Florida with his wife Leighanne and two children, Colin and Ciara.
Sajid Khan: Can you begin by sharing your perspective on the role of CFO in the broker-dealer firms?
Declan O’Beirne: Thank you Sajid, the role of CFO in a broker/dealer firm has much the same challenges and opportunities as any other firm, cash flow management, bottom line enhancement, capital protection and superior financial disclosure to the pertinent stakeholders. However, with a broker/dealer, I believe, there is a much greater emphasis on regulatory oversight, customer protection rules and cross discipline knowledge such as operational efficiency and an appreciation for compliance.
SK: In your opinion, what are some of the biggest challenges faced by broker-dealer firms during the last couple of years?
DB: These have been trying years for all but the broker/dealer industry has been hit by some heavy currents, there have been so many challenges. However, if pressed, I would name product selection, Insurance companies have either repriced their products or have shrunk their product suites with generous guarantees. Products such as Life policies, long-term care, variable annuities and fixed annuities. The decreasing returns on lines of income such as 12b-1s, money markets rebates etc have also been challenging. I also think there has been a hit to the confidence of the investing public in the markets which has led to something of a polarization in the industry towards large brand firms such as Merrill et al and on the other end of the scale self-management portfolio firms such as Schwab or Scottrade. I also believe there has been an accelerated shift towards managed money vehicles such as RIA’s and a movement away from broker dealers.
SK: What’s been your proudest achievement in your career?
DB: Interesting question. I would have to say it has been participating with a remarkable group of professionals at John Hancock Financial Network and effecting immense sustainable change in its business model where I believe it can not only survive as a strong and attractive distribution network but indeed excel in its mission.
SK: How effectively broker-dealer firms innovating these days?
DB: I think that is a question best answered in the coming years. The past 5-6 years have been tumultuous and quite frankly I believe there has been more emphasis on the block and tackle and less on innovation. However, having said that I see many firms are now shaking off the doldrums and are beginning to review their business models, revamp their operating practices and seeking new and innovative ways to engage the clients, the market and in fact all their stakeholders.
SK: At your recent engagement with John Hancock Financial, the primary goal was to strategically transform the agencies to an independent broker-dealer model. How important is the independent broker-dealer model for financial services firms?
DB: Extremely important, I believe independent broker dealers are the engine of innovation and change for the industry. There is room in the market for full service firms, independent firms, discount firms etc. The investing public need the choice and with continuing emphasis on public outreach, education and participation they deserve to be offered a variety of options through which they can participate in the market and prepare for their various needs. Independent broker/dealers are an intrinsic part of that offering.
SK: What is your leadership style?
DB: I would say it is collaborative with a strong emphasis on people. There needs to be a balance on people, systems and processes but ultimately, you will live and fall by the people. A leader needs to invest in staff education, mentorship programs, strong professional values and a healthy work-life balance. Micro management will result in nothing but stress for all concerned. I make only truly important decision – who I hire – if I have done that correctly, I have then hired a hard working professional whom I can trust, will get the work done and will report back to me responsibly.
SK: What advice would you offer for other finance executives who aspire to follow in your footsteps?
DB: Be truly interested in people, develop professional relationships not for how they can help you for but for how you can help them. Don’t be afraid of the hard work, you’re never too old nor too titled to roll up your sleeves and get your hands dirty with the day to day block and tackle but always be aware that you are being looked to for leadership. Of course, taking a leap of faith, believing in yourself when the opportunity arrives is also a good thing.
SK: Anything else you would like to share with our readers.
DB: Always do what’s best for your clients, what’s best for the people with whom you work and give it all your effort and you will be successful.