Broker-dealers are required to have a FINRA Series 27 Financial and Operations Partner (FinOp) assist their firm. Outsourcing offers an alternative to hiring someone in-house, and working with a financial officer from a consulting company provides you with additional accounting assets. Here is more information on how a financial operations professional helps enhance your firm’s financial reporting:
Assists With FINRA Membership
The FinOp helps the firm with the FINRA membership application process by organizing the financial reporting and analysis systems. This includes helping with financial projections by creating a standard format. The financial and operations officer helps formulate the capital structure and advises on how to set up the books and records; they also compile records for:
- Balance sheets
- Profit and loss statements
- Trial balances
- Net capital computations
A financial consulting company is able to help you draft mandatory manuals; this includes your business continuity plan and supervisory procedures. The FinOp provides accounting assistance for preparing the Supervisory Procedures Manual. They also approve expense-sharing agreements and create the first account chart for the firm’s accounting software. After becoming a FINRA member, your firm is assisted by the financial and operations partner in filing the required financial reports; these are due on a monthly, quarterly, or annual basis. The reports include the Financial and Operational Combined Uniform Report and Schedule I, Supplemental Statement of Income, and Form Custody and supplemental schedule off-balance sheet.
Provides Oversight of Records
A FinOp has the responsibility of checking a firm’s financial books and records. A firm’s financial records can include accounts payable and receivable, billing and invoicing, general ledgers, and bank reconciliations, as well as other financial statements and accounting books. The financial officer makes sure that these records are accurate.
The firm’s financial and operations partner is also responsible for supervising those who maintain the firm’s books and records, as well as anyone involved in back office operation maintenance. This can help prevent miscommunication between employees and allows the financial officer to provide assistance as needed; it also offers a clearer chain of command.
Files Financial Reports
Financial officers assist broker-dealer companies by submitting regulatory financial reports on behalf of the firm. This process includes preparing the final reports and financial statements, approving the reports, and submitting them to the appropriate regulatory body. The officer also supervises the other people involved in preparing the report. Having a supervisory officer who checks the accuracy of the reports helps prevent inaccurate or missing information on the reports; this offers accuracy and transparency. A financial and operations partner is responsible for managing deadlines. This helps make sure that required reports are submitted on time; filing reports in a timely manner helps prevent possible penalties or other complications.
Verifies Net Capital Computation
Financial and operations partners work to verify that the broker-dealer’s net capital is current and accurate. The net capital refers to the liquidity of the broker-dealer, and FINRA members are expected to be compliant with computations and reporting. The FinOp performs the computation and makes sure that there is sufficient net capital, performing or supervising duties related to the 1934 Securities Exchange Act & Securities and Exchange Commission. This allows firms to submit the net capital computation to regulators at required times, usually at the end of the month or quarter.
Work With a FinOp
A financial officer works to make sure that the firm is compliant with federal laws, state laws, and GAAP accounting rules. They also communicate with auditors and regulators. Financial consultants can service third-party marketers, underwriting and introducing brokers, mergers and acquisitions brokers, and underwriting brokers. To find a FinOp, contact a financial consulting company today.
