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*'''Cut out the [[waste]]''': You want the onboarding process to be as quick, efficient, pleasant and commoditised as possible. Here the [[Toyota Production System]] that spawned lean manufacturing techniques is a hearty analogue, and we commend our [[seven wastes of negotiation]] article. But note ''efficiency'' — in [[Taiichi Ohno|Ohno]]-sensei’s lexicon, ''[[muda]]'' [[waste]], not ''cost'', is the watchword. If you save cost but introduce inefficiency — ~''cough''~ [[outsourcing]] — then you are getting it wrong. Most people are getting it wrong. | *'''Cut out the [[waste]]''': You want the onboarding process to be as quick, efficient, pleasant and commoditised as possible. Here the [[Toyota Production System]] that spawned lean manufacturing techniques is a hearty analogue, and we commend our [[seven wastes of negotiation]] article. But note ''efficiency'' — in [[Taiichi Ohno|Ohno]]-sensei’s lexicon, ''[[muda]]'' [[waste]], not ''cost'', is the watchword. If you save cost but introduce inefficiency — ~''cough''~ [[outsourcing]] — then you are getting it wrong. Most people are getting it wrong. | ||
*'''Build for the Future''': Your optimal outcome and your client’s is the same: ''years of trouble-free motoring''. Over the years your relationship will grow and the environment in which you do business will change in utterly unfathomable ways. You cannot anticipate these developments, but you can plan for them: design your relationship documents to be standard as possible, as simple as possible, as uncomplicated as possible, and as flexible as possible. | *'''Build for the Future''': Your optimal outcome and your client’s is the same: ''years of trouble-free motoring''. Over the years your relationship will grow and the environment in which you do business will change in utterly unfathomable ways. You cannot anticipate these developments, but you can plan for them: design your relationship documents to be standard as possible, as simple as possible, as uncomplicated as possible, and as flexible as possible. | ||
*'''Design in ''interoperability''''': Design for the positive development of your relationship in directions you didn’t expect. Make your documents as adaptable as possible. Your client may open business and wish to move to Europe. It may start trading FX and move to equities. Have a platform that allows a client to quickly add services, or switch. | *'''Design in ''interoperability''''': Design for the positive development of your relationship in directions you didn’t expect. Make your documents as adaptable as possible. Your client may open its business in New York and then wish to move to Europe. It may start trading FX and move to equities. Have a platform that allows a client to quickly add services, or switch. | ||
*'''Make structural change easy''': Design in a facility to bulk-amend to cope for inevitable regulatory changes. MiFID 3, ahoy! | *'''Make structural change easy''': Design in a facility to bulk-amend to cope for inevitable regulatory changes. MiFID 3, ahoy! | ||
*'''Don’t obsess over the disaster scenarios'''. Build basic protections against the failure of the relationship or your counterparty — failure to pay, insolvency — but beyond that, remember this is a relationship. as to which... | *'''Don’t obsess over the disaster scenarios'''. Build basic protections against the failure of the relationship or your counterparty — failure to pay, insolvency — but beyond that, remember this is a relationship. as to which... | ||
===[[Relationship contract]]s=== | ===[[Relationship contract]]s=== | ||
But, but, but — why must it be that our onboarding process does nothing ''but'' obsess about disaster scenarios? We know of cases where even affiliated broker-dealers have laboured for ''years'' to conclude a simple [[Global Master Securities Lending Agreement|stock lending agreement]] | But, but, but — why must it be that our onboarding process does nothing ''but'' obsess about disaster scenarios? We know of cases where even affiliated broker-dealers — entities under common control in the same financial services group — have laboured for ''years'' to conclude a simple [[Global Master Securities Lending Agreement|stock lending agreement]]. | ||
Every element of | Every element of the onboarding process is arrayed ''against'' the client as if, until proven otherwise, the client should be taken to be a dissolute money-laundering gambler and fraud who will stop at nothing to subvert your legitimate interests in making a fair return out of your relationship. Now, look: the [[JC]] is certainly not naive enough to think there are no institutions like that in the ecosystem. There certainly are. Most of them, in fact. We assume a broadly Hobbesian view of human nature in the wild, and wish others would too. And [[salespeople]] catching a whiff of revenue can suspend the most foundational disbeliefs in a heartbeat. But that is not the point. The point is that, even against such bounders and cads, a mute legal document — especially one you hammered out nineteen years ago and haven’t looked at since — ''is no kind of protection''. [[Don’t take a piece of paper to a knife-fight]], that is to say. ''Take a knife''. Your practical risk is best managed by, well, ''actual risk management''. | ||
This is what half of your employees — the control function — are engaged to do, after all. Let them. | This is what half of your employees — the control function — are engaged to do, after all. ''Let them''. Intraday risk is best managed by relationship management: margin, credit lines, client communication — to ''avoid'' cataclysmic meltdown, rather than by sleep-walking into it and then looking to an arsenal of weapons you prepared a decade ago to wax your client. Think Chernobyl: by the time the core explodes, ''it’s too late''. | ||
History tells us that a miniscule minority of our contracts will ever come to disagreement, let alone court-inflicted blows. | History tells us that a miniscule minority of our contracts will ever come to disagreement, let alone court-inflicted blows. | ||
{{sa}} | {{sa}} | ||
*[[Anti-money laundering]] | *[[Anti-money laundering]] | ||
*[[Negotiator]] | *[[Negotiator]] | ||