Northern Trust global survey: Asset management prioritising product quality and accuracy
The US-based custody bank Northern Trust has recently surveyed 300 global asset management firms. The research indicated a major shift in the industry’s priorities: unlike the previous year, most asset managers (72%) increasingly focused on the quality and accuracy of their products, targeted distribution strategies, better data management and outsourcing. The heightened significance of data and analytics was a recurring theme revealed in the survey. The vast majority of respondents (83%) considering outsourcing will do so to augment their data management capabilities. The study reveals that the industry has become more open to technological partnerships, and keeping the costs down remains an important priority within the sector.
The results of the survey are hardly surprising. The diverse array of investment options in today’s global market requires institutions to effectively manage and offer these products. As asset managers focus their product strategies on the investor experience, ensuring their product universe aligns with their clients’ objectives and risk attitudes becomes essential. At the same time, maintenance and versioning of the investment products grow in importance as the number of internal and external platforms listing the information about the fund managers’ offerings increases. For example, timing issues present a unique challenge in occupational pension schemes. The lag between receiving investment advice and the actual investment, particularly when employees change jobs, can lead to mismatches due to market fluctuations or adjustments in model portfolios. Reliance on manual processes, such as spreadsheets, for managing data and critical information poses risks of inaccuracies and inefficiencies, which can have far-reaching consequences for both end customers and advisors.
The Northern Trust survey indicates two popular strategies the executives intend to pursue to achieve a best-in-class experience for investors. Most respondents (83%) said they would change their product strategy, and 77% said they would leverage new technology. In today’s blog, we discuss the best practice investment product universe management technology.
Best practices of mutual funds and model portfolio selections management
Keeping track of mutual funds and model portfolio selections is important from a sales and operational perspective. Timely updates of customer portals and distributor platforms allow investors to make better-informed investment decisions, improving overall investor experiences. At the same time, efficient versioning and model portfolios and investment product universes maintenance is crucial to maintain trust. Data management capabilities are crucial to address these needs. At Kidbrooke®, we provide a unified platform for managing, versioning, and monitoring investment product universes. Our platform offers customers a single source of truth for their mutual funds, model portfolios, and other investment product offerings across all execution platforms. By leveraging our platform’s APIs, manual processes for adding, altering or deleting product universes are automated and simplified. Additionally, by aggregating, enriching, and transforming market data for investment products from third-party providers, we can offer analytics at both the individual product and portfolio levels. For model portfolios, the platform also allows customisation of metadata and the possibility to define historical portfolio weights and rebalancing strategies.
We focused on several factors when building our investment product universe platform. First, the solution had to be able to manage a wide spectrum of investment products by seamlessly handling various investment product types and subsegments. This factor is crucial to ensuring that the product data is easily understandable and insightful, which, according to the survey, is the most pressing data management challenge (42%).
Second, best practice solutions allow for quick insights into portfolio management, specifically the ability to easily adapt and modify model portfolios across each execution platform. This helps reduce the complexity and manual effort in portfolio management and makes the available data more useful for the institution.
Third, the solution must utilise automated mechanisms to ensure up-to-date tracking of portfolio versions and investment product data. This will help you avoid delays, key person risk and inevitable errors associated with manual processes. In the industry where 42% of asset managers struggle to guarantee timely and accurate data availability for internal and external stakeholders, automating these processes will help you build a strong foundation for operational and marketing efforts.
Spreadsheets: A practice of the past or a complement to automated workflows?
It would be inaccurate to claim that spreadsheet-based analytics must become a practice of the past. It has important advantages: it allows an analyst to understand and research a process that must be created, managed, reported or maintained; it is easy to use and accessible to most professionals. However, regarding product data management, API-based analytics has the upper hand in a few crucial areas that merit converting the established spreadsheet-based processes to automated workflows. First, by automating manual, time-consuming, but battle-tested product management processes, you can free up the time and resources of the team and reduce key person risk. Second, API-based solutions like Kidbrooke’s investment product universe platform accommodate a nuanced approach to managing and updating your product lines. For instance, we account for time lags between investment advice and actual investment, mitigating the risks associated with market changes and portfolio adjustments. Finally, asset managers can offer more up-to-date and relevant investment product information with improved data management, enabling investors to make better financial decisions. They can enjoy a more seamless and trustworthy investment experience with reduced risk of portfolio discrepancies when investing directly or through distributors.
How Max Matthiessen automated product management with KidbrookeONE APIs
We have recently partnered with Max Matthiessen, a prominent Swedish insurance broker, to enable them to keep track of their mutual funds and model portfolios from a sales and operational perspective. The company provides various services, including insurance brokerage, pension insurance, life insurance, and advisory services for long-term savings. Through the partnership, Max Matthiessen is leveraging Kidbrooke’s platform for market data and investment universes to enhance the delivery of mutual fund and portfolio information across its self-service and advised channels and to improve and automate the continuous curation of their investment product universes and model portfolios. “Kidbrooke’s platform enables us to describe our funds more clearly to current and potential investors, especially from a sustainability perspective. The implementation was very smooth and fast. We are very satisfied with the cooperation.” – says Niklas Söderström, CEO at Ruth Asset Management, part of Max Matthiessen.
Build an efficient mutual funds and model portfolio selections management workflow with KidbrookeONE
Northern Trust’s survey revealed that the modern asset management industry underscores the pressing need for innovation in data management and technological partnerships. As firms increasingly prioritise the quality and accuracy of their offerings, the ability to provide timely, precise, and insightful investment product data becomes paramount.
As the industry evolves, leveraging advanced data management and analytics solutions will be crucial for maintaining a competitive edge. We invite you to explore how Kidbrooke’s innovative tools can transform your investment product strategy, ensuring you stay ahead in an increasingly data-driven world.
Contact us to learn more and embark on a journey towards more efficient and effective investment management.
Read the original article here.
