Having spent nearly two decades in the financial services industry, including several roles at investment management firms and RIAs, I have firsthand experience with the challenges facing investment managers.
Today, as Director of North American Investment Management Client Success at SS&C, this experience has been invaluable to me. Our shared experience allows me to understand what the firms using our tools are trying to accomplish, offer practical solutions to overcome the obstacles they face and work within SS&C to ensure our services and solutions are aligned with their goals.
Today, firms are seeking new ways to expand revenue, streamline operations, and unlock the power of their data. Whether it's exploring new strategies and asset classes, consolidating operations post-acquisition, or untangling years of complex data, investment managers need the right insight, technology and partnerships to succeed.
In this blog, I'll delve deeper into these goals and explore how the experience and expertise of trusted partners can help firms find and implement the solutions they need to navigate today’s market and emerge stronger.
Revenue Expansion Initiatives
As fee pressure prevails, firms are looking for ways to expand their revenue opportunities into new business strategies and diversified investment strategies.
This could take the form of moving into an adjacent market, such as an institutional firm with a history of working with pension or public funds, introducing a mutual fund or an ETF to diversify their instruments or market capitalization exposure for investors. I’ve also seen high-net-worth or private client firms expanding into wealth and planning where they can provide investors with more robust offerings, like retirement and estate planning.
As these firms broaden their strategies in search of revenue opportunities, many find they don’t have the in-house capabilities to effectively conduct all of these strategies at once.
That is where consolidation comes in.
The acquisition market remains strong in both the investment management and advisory markets. It often makes sense for firms to come together through an acquisition or a merger to combine resources and expertise for a more holistic offering.
These consolidations can be challenging and firms have a lot to consider, including:
- Combining or contemplating new operating models
- Consolidating or learning new technological capabilities
- Migrating and integrating data
- Agreeing upon and implementing best practices
Untangling Evolving Data
Another challenge the investment managers I speak with face is untangling years of accumulated data to make sure it’s accurate, timely, and available to the right people within the firm.
As a firm’s business evolves, they record every transaction, calculate every performance return and record every portfolio attribute in their investment systems. Add to all this data the fact that, over time, asset classes, investment strategies and portfolio management teams change. Our portfolio accounting systems have serviced investment management firms for over 40 years so I have watched these data sets grow with each unique firm. Our technology has proudly grown with them.
Trying to wrap their heads around this deluge of data – all in various formats and iterations – can leave firms feeling overwhelmed and unsure which direction to move in. To make sense of it, years of data must be unified – mapped, categorized, normalized, cleansed.
Because of this, many investment managers are taking a hard look at their data strategies.
Finding Opportunity in Challenge
To me, all challenges can be opportunities if you look at them through the right lens.
By drawing on the expertise of those who have faced similar obstacles, strategically leveraging technology and services, and engaging in strong, smart partnerships, firms can find the opportunity in these expansion and data initiatives.
By connecting with industry peers, firms can share what they’re doing to address their challenges and learn approaches that may work for their firm.
At SS&C, we regularly host events like forums, conferences, focus groups and social gatherings, giving firms an opportunity to connect and learn from each other.
But facilitating knowledge-sharing shouldn’t stop there. A valuable technology partner should have a robust team of experts that can help solve the challenges firms face. Teams comprised of experts that can empathize with those challenges because they have not only seen numerous examples as a provider but because they have sat in the same seat on the buy-side of the table.
They’ve seen a lot, and they know how to solve the challenges you face.
For example, at SS&C, we have consultants who can advise on revenue expansion or merger integration activity, helping firms leverage technology and services to support new strategies and asset classes or address the operational concerns of firms facing consolidation, such as data migration, system consolidation, and risk management. By streamlining these processes, firms can minimize disruption, reduce long-term costs, and accelerate the realization of synergies.
Another way firms can leverage provider expertise to approach these challenges is through outsourcing.
Leveraging service provider expertise to determine a sound operating model and execute tasks that can and should be outsourced, helps your firm become more productive and allows investment professionals and operators to focus more on tasks that lead to greater investor satisfaction and higher profitability.
These outsourcing decisions become even more potent as data becomes a greater focal point in the industry. Tracking data, keeping it safe, and making it available are all table stakes. Firms will need a trusted partner, like SS&C, that has many years of deep domain expertise in the development, servicing and support of the technology tools affording investment professionals the time needed to visualize and analyze data, as well as enabling teams to make insightful investment and operating decisions.
Such a partner can help firms organize and be thoughtful with their data, mapping data sources, establishing where each data element should live – the trading system, the accounting system, the planning tool or elsewhere – and help to implement data governance programs. As natural language models become even more prominent, investment firms with strong data governance can take advantage of these advances quicker and more seamlessly.
The Future of Investment Management: Powered by Partnership
I recently spoke with an industry expert at an event SS&C hosted in Boston. He shared that it is great to see SS&C putting people in leadership roles who used to be users of the technology.
I agree. Through my experience on the buy-side and at SS&C, I’ve seen firsthand how leveraging the experience of trusted resources that speak the firm’s language can help firms find and adopt solutions for any business need and drive the business forward – even in the face of industry challenges.
Whether it’s consulting on revenue expansion or merger integration activity or helping organize and be thoughtful about your data, SS&C has the expertise to navigate anything the market sends your way.
SS&C’s Genesis makes solving for these problems even easier by bringing together the investment professionals that make the decisions for the business with the trade desk and operations teams that power the business. With a single, unified data platform, teams across the firm can efficiently integrate and surface data to make sound decisions.
I’m excited about how this combination of partnership and technology will continue to help firms overcome obstacles and create opportunities on their path to growth and success.
