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A View from the Top: Gina McFadden
It's been a big year for the options industry. The Chicago Board of Options Exchange (CBOE) and OCC are celebrating their 40th anniversaries on the heels of The Options Industry Council's 20th anniversary last fall. And August 1, 2013, we celebrated another milestone, the retirement of Gina McFadden, President of OIC.
Her retirement is just a few months ahead of the retirement of OCC Chairman and CEO Wayne Luthringshausen, who first hired her in 1973. "I had a college degree but there were limited opportunities for women," she recalls. "So I interviewed for entry-level positions at different organizations, and at each interview said, 'I really want to know if there are opportunities to move up in this office.' Wayne was the only person who said, 'Absolutely.'"
Gina joined what was then the Chicago Board of Exchange Clearing Corporation (CBOECC). It had 11 people total and only one market to oversee, and in 1973 it cleared 1.1 million contracts. Today it clears for 12 U.S. options exchanges, five futures exchanges and a stock loan exchange and has branches in Texas, New York and Washington, D.C. In 2012 OCC cleared 4.1 billion contracts.
"There were tons of opportunities, and I moved across a lot of different departments," said Gina. "I started a little HR group, moved into project management and then was in marketing when the 1987 crash came. I ended up in Member Services, an operational group. That's where I really learned the core OCC business."
"At the time, I didn't think it was such a great move, because it was a difficult job dealing with the back offices of our clearing firms, and you worked Saturday expiration, etc. It was a tough transition but well worth it," she said. "I ended up moving to OIC as Executive Director, and then I came back and managed Member Services and several other OCC operational areas." Six years ago she returned to OIC as President.
The outreach to financial advisors is one of the initiatives that began on Gina's watch. "I think we've done some really exciting things. We're learning what the advisors' perceptions about options are, and what they need to be able to use them. I am very impressed with what the OIC team has done."
"I think back to how we started with an advertising campaign, a brochure and a CD. Look at what we have now, with the website, all of our classes, our live education program, and all the marketing efforts for financial advisors and institutions, including the inaugural Wealth Advisors Summit in 2012 in New Orleans. It always impresses me seeing the experts on the podium inspire the advisors in the audience."
"My personal and professional lives have been closely entwined. I met my husband in Chicago, a couple of months after I started and he knows all my colleagues," she continued. I don't think long careers like mine at a single institution are very common any more but there's quite a group of people who have been there 25 years plus, and I think it's a true testament to the company. They've stayed because they truly like what they do, and it's fun to be involved in our business."
Gina is a Board member of Women in Listed Derivatives, a networking organization that supports women in the industry, and she plans to continue to support it in retirement. She's also planning to try something new. "I'd like to trade options, which I haven't been allowed to do," she laughed. "We're precluded from doing that, or from trading the stock of any of our member firms or participant exchanges. I would like to be able to practice what I've been preaching."
Before Gina left, we asked her to educate us all one more time by answering five questions.
- What is the biggest change you've seen in the options industry in your 39-plus years?
I think that would have to be ISE's entrance as an electronic options exchange. That event triggered a lot of changes. Most options became multiple listings. New exchanges found the barriers to entry were lower, and the cost to participate was attractive. I think we all agree that competition in the options industry has been a catalyst for change in technology, improved service, lower fees, and more narrow spreads. Overall it's provided a much better customer experience.
- What's been your greatest challenge?
There have been many, but one that has worked out very well has been working with our constituents. The OIC Roundtable is our governing body for our education and marketing programs, and I think its participants are really incredible. Although they compete fiercely with each other in their day jobs, on the Roundtable they act as a team; they're savvy, dedicated options professionals. Trying to please all of them was often a challenge. Ultimately they came together to focus on the unified goal of educating options investors, and have always produced an annual plan that builds on our past successes and addresses new opportunities.
- What has been your personal proudest moment?
I'm not sure it's a moment, but I am proud that the options exchanges and OCC members have increased their support for us over the years, which had enabled us to grow. OIC has always been accountable to the Roundtable for the allocation of both financial and human resources to meet planned deliverables. We've proved to be really prudent managers and we always achieve a successful plan, always within budget. I think this was a big factor in obtaining approval about six years ago from OCC's Board to significantly expand the OIC budget.
That allowed us to expand our outreach to financial advisors and institutions and also to go well beyond our shores by enhancing our coverage of Europe and establishing a foothold in Asia. Having the opportunity to increase our scope was the start of big things for OIC, and now I'm proud to say we're considered the gold standard of options education.
- What has been the impact of financial advisors' growing use of options?
I think there's no question that advisors' increased use of options has enhanced OIC's leverage, and that builds volume for the exchanges and OCC. Options give the advisors the tools they need to meet their customers' needs in generating income and protecting their portfolios. I think that advisors have definitely contributed to making options a mainstream investment product.
- Where do you see the industry in five years?
I really expect volume to continue to grow, driven by different end-users, which include brokers trying to differentiate themselves and their practices, by pension fund managers who are looking to boost growth, and by educated investors outside our borders who are attracted by the most liquid and transparent markets in the world. I think it's hard to imagine that this robust industry won't be bigger and better in the years ahead.
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