July 29, 2014Cutter Associates, the leading provider of operations and technology expertise to the investment management industry, recently completed a benchmarking study of the client reporting function which highlighted some significant trends since the study was last conducted in 2008. Investment management firms have seen growing client demands for information and software solution providers are recognizing the need for scalable, efficient tools.
When the study was first performed in 2008, creating and modifying the client report templates was primarily the responsibility of the IT department within asset management organizations, with three quarters of firms noting IT ownership of the process. Now, with the implementation of new client reporting tools that function has shifted and now lies with client reporting teams usually located within the operations or client service departments.
“Clients don’t want to wait weeks for IT to build or modify templates to get their information,” noted Cindy Sealey, Head of Cutter Associates’ Client Facing Practice. “The tools available to asset managers now allow the appropriate teams to adapt reports. Many proprietary systems weren’t designed to accommodate quick changes as needed. Software vendors have recognized the need for end users to be able to customize and create reports quickly and efficiently.”
Another benefit that has come about through implementing specialized reporting tools is that Portfolio Management is much less involved in the creation of reports – freeing them up to concentrate on investment decision making. In 2014, only 3% of portfolio managers have the responsibility to create reporting templates – down from 17% in 2008.
In addition to a change in the ownership of reporting templates, the study found that there has been a significant change in how often reports are being produced. In 2008, two thirds of respondents provided reporting data on either a monthly or quarterly basis. Now 67% of firms have information available on a daily basis.
“Demand for timely information is definitely on the rise,” said Sealey, adding that firms need to be positioned to be able to respond to client requests without sacrificing quality or the time to production.
Lastly, the format of reporting has changed. Six years ago, the survey indicated that much of the output was being done in Microsoft Word (92%) and PDF (100%). While PDFs still dominated in 2014, Word usage has dropped to 52% and now 79% of firms provide another output method as clients request raw data and specialized file formats. The benchmarking study covered many aspects that impact the client reporting process, including organizational structure, data management, technology, and reporting capabilities. CutterBenchmarking studies allow an investment organization to see where they stand in relation to their peers and provide insight and actionable steps from optimizing processes. Reports are available to Cutter Associates’ benchmarking clients.
About Cutter Associates, LLC
Cutter Associates, LLC provides truly independent investment process expertise for the investment management community. Through three interrelated services, Cutter Associates provides investment management firms the knowledge and tools to ensure that their business technologies and processes are competitive. CutterResearch offers member firms detailed, actionable research to reduce risk, lower costs and keep up-to-date on systems and operational processes. CutterBenchmarking provides bespoke reports measuring firms’ investment processes by capabilities, risk and effectiveness through comparisons based on tried and tested capability models. CutterConsulting partners with firms to evaluate, select, and implement systems and to develop leading technology and operational strategies. Cutter Associates, headquartered in Rockland, MA, has subsidiaries in Canada and the UK.
CutterResearch content is the proprietary property of Cutter Associates and our members who have entered into confidentiality agreements. It contains information that is proprietary and confidential to Cutter as well as to the vendors discussed within the reports (the "Vendors"). Disclosure of the information contained in the reports could cause irreparable harm to Cutter and/or the Vendors.
By selecting "I Agree" below, you agree to safeguard this information with the same care as your firm affords its own confidential information. You will not provide access to this information to anyone who is not an employee of your firm and will not distribute this information outside your firm. Furthermore, you will not provide access to this information to any employee of any subsidiary, unit, department or division of your firm that is engaged in any aspect of the software business involving third parties, including, without limitation, selling or otherwise providing software to third parties, assisting third parties in the selection or implementation of software, or providing investment related software information to third parties (collectively, the "Prohibited Recipients").