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Repositioning the client reporting function to enable growth

By Sarah Prior, Senior Sales Manager, SimCorp Coric

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Client communication and reporting has never been more critical to an investment firm’s overall strategy. It sits at the center of the client experience and is the most tangible output to show what you do, and how you provide value to your end investors. For many years the function has been...

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by SimCorp Coric
| 15/05/2019 12:00:00

New research suggests that firms are on the path towards simplifying and centralizing their client communications and reporting function and putting investor needs at the center of their client operations. Organizations which do this can potentially transform the task from a back-office administrative function to a revenue-generating hub.

Regularly soliciting feedback from clients, prospects and industry participants is one of the most important things that we do.

Without these insights, we can't update our client communications and reporting platform, SimCorp Coric, to reflect the ever-changing needs of the industry. The most tangible evidence of this ongoing process is seen in our regular updates to the functionality and usability of our platform.

Of course, conducting primary research into the market is an intrinsic part of this ongoing process, and our two latest global market surveys, conducted in association with WBR Insights, certainly make for interesting reading.

Part 1 of our survey, “What is Reporting Costing You?” confirms that many firms are struggling with a fragmented approach to communicating with clients. In many organizations, the client reporting function has traditionally been viewed and handled as a back office function. Today, multiple areas of an investment manager’s business are now producing a wide variety of client-facing materials and investment reporting to cope with client demands -often across multiple teams, business units and using disparate software solutions and data sources.

Specifically, Part 1 of our survey results suggest that manual processes, data gathering, and multiple solutions and headcount are creating an operational straitjacket for many organizations. In a challenging market environment where consolidation is rife and client stickiness at an all-time low, this is cause for concern. Sources of alpha are scarce, and margins are being squeezed – this certainly isn’t new. It means that firms who are looking to achieve business growth, acquire new mandates, as well as handle increasingly sophisticated and frequent demands of their existing clients, are feeling the pressure.

However, there is cause for optimism. Part 2 of our survey, entitled “Delivering on your Clients’ Expectations” paints a more positive picture. The survey looked at future investment in the client reporting and communications function. Crucially, it identifies the initiatives that firms will undertake to cope with client demands now and into the future.

In a fiercely competitive market, the results suggest that change is on the horizon. Of the 100 senior global buy-side executives surveyed, 56% stated that they are looking to adapt their current structure for client communications and reporting by centralizing the function, to meet future client communication demands. Additionally, 69% surveyed also revealed they are planning to upgrade or replace their existing client communication and reporting technology to assist with this transformation.

From an operations, technology and business perspective, this certainly makes sense. Most investment management firms realize that they need to maintain and improve their ability to provide timely, accurate, audited, authorized and consistent data to their clients and other interested parties. It is a vital component of delivering a good client experience, yet historically, it has proved problematic to retrieve information from the disparate systems that exist across a firm and ensure that only approved data is being utilized.

However, by taking a centralized approach and having the right technology solution in place, the client communications and reporting function can be repositioned at the center of an investment manager’s client operations to facilitate this. It can ensure that all consumers (marketing, sales, clients, operations) use the same validated data to deliver the requisite communications which are now expected.

Additionally, by underpinning this move with a modern, functionally rich client reporting and communications platform, consistent, approved data and content can be fed to multiple areas of the business, well beyond the enclave of the client reporting team. In essence, it can become the foundation from which all client communications are created.

Centralized reporting not only improves the accuracy and consistency of all client-facing materials, but it can also deliver substantial business benefits from many different perspectives, including investment marketing, client servicing, and operations.

From an overall business and cost perspective, an improved margin is one of the primary goals for introducing or replacing any new technology. Automation can improve the bottom line by enabling a business to grow AuM or client numbers without increasing operational headcount.

Our recent research suggests, however, that the fragmented approach has meant that firms are struggling to achieve automation across the various business units now charged with creating client-facing materials.

For example, an area where we see many prospective clients struggling is automation of the production of fund fact sheets. Manually producing hundreds of factsheets may take a team of four people a week to create, but it can easily be cut to half a day when automated. Our own clients tell us that this operational issue is firmly in the rearview mirror, and that they have automated between 90-100% of the task. In an environment of dwindling fees and tightening margins, it is vital to employ a cost-effective and scalable approach to servicing clients.

Additionally, research from CFA Institute suggests that 59% of investors would be likely to award a new mandate in a new asset class to an asset manager they are already working with. Delivering the operational agility to allow sales teams to focus on the client and needs, rather than administration, is critical to capturing growth. In terms of client servicing, centralization can also have numerous benefits on client acquisition and retention.

For example, the production of presentations and pitchbooks often creates operational strain on client facing teams, including sales teams, whose focus is driving business growth. Updating materials to pitch and present to clients often involves pulling together multiple, disparate sources of data and content from different areas of the business at month and quarter-end – often with limited workflow, audit and governance. On top of this, further manual work is required to calculate figures and reconcile layouts and branding to ensure that consistent and accurate materials are created.

It’s incredibly powerful to be able to deliver a tool to sales and business development teams that empowers them to access editable, compliant and consistently branded presentations, with the latest investment returns statistics. Additionally, entire packs of pre-approved, compliant slides can be downloaded on a mobile device by a salesperson out on the road. This means Sales can operate on a self-service basis, without running the risk of inaccurate information being utilized or being subject to delays from a busy marketing team.

With the right technology solution in place, client reporting and sales enablement can all be done from one platform, using a consistent set of tools, processes, and workflow – there is no need to buy several different systems and then face the issue of interoperability, manual processing and, additional data pathways.

When utilized to its full potential, client communications can protect and grow an investment manager’s business. It can protect existing revenues through the timely delivery of visually-appealing, compliant and consistent reports, but it can also grow revenues or AuM through sales and marketing enablement – without increasing the operational cost base.

About Sarah Prior:
Sarah Prior is a Senior Sales Manager for SimCorp’s Client Communications and Reporting suite, SimCorp Coric. Sarah is responsible for driving business growth and helping asset and wealth management firms across the UK & Ireland to keep up with demands for better investor reporting, and an overall improved client experience.

Sarah has operated in the buy-side space for over 10 years, working on a range of different solutions with asset managers across the industry, including risk and regulatory reporting.

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