New investment challenges changing the manager/servicer relationship

By: Bill Bormann

Today’s investment managers face many new challenges, including regulatory reporting requirements, complex investment strategies, expanding trading volumes, changing technology, and more. To smoothly and effectively meet these challenges, managers must ensure their asset servicers intimately understand today’s ever-changing market.

An emerging need (as part of enhanced and expanded transparency), is performance measurement reporting. To meet this need, many managers must upgrade outdated, ineffective, and costly existing processes, while others may have to establish these processes for the first time.

Managers who are evaluating their performance reporting needs and planning next steps have three options. They can:

  • buy capability (acquire technology and hire industry expertise, ongoing maintenance, and support)
  • build capability (build technology and hire expertise, ongoing maintenance, and support)
  • rent (outsource all or parts to third parties)

Each of these options has its pros and cons and include varying degrees of investment and levels of risk.

To some investment managers, maintaining an in-house (or hosted) market-acquired or custom-built solution is the preferred route.

However, more and more managers are turning to third party providers (e.g. asset servicers) to deploy and manage this need. Servicers have the accumulated technology, connectivity, expertise, and capacity to handle the needs. In addition, the solution does not involve a large initial investment. Ongoing, the manager does not need to hire expertise or manage technology. So, they can focus on raising assets and returns; the rest is the asset servicer’s job.

To learn more about this need and the options available, read our whitepaper or contact us at solution@sscinc.com.