Client Reporting: The Road to Empowerment

There comes a point in parents’ lives when they must set their children free from the family home. The temptation is to hold on for as long as possible, but parents know that releasing the child will ultimately benefit them.

There is a danger that the relationship between investment managers and vendors could follow a similar pattern. But in the same way, the vendor that relaxes its control acts in the best interests of its client.

For modern-day client reporting, a vendor’s role is simple—at least theoretically. It must generate automatic reports detailing the performance of the funds an investment manager controls for its clients. However, the simplicity of the process hides its complexity, for in order to produce the reports, the vendor must provide an aggregated view of each investor’s positions and performance at any time, on any device, at the touch of a button. This can mean generating as many as 50,000 reports per day, or even within a couple of hours, according to Simon Cornwell, co-founder of London-based Vermilion Software. Cornwell says it is critical that investment managers choose the correct vendor to support them in that process.

“This isn’t a one-off purchase,” he says. “This is not a buy it, stick it in and then away you go. Selecting a vendor is a crucial decision—you want to be with that vendor for years to come, so you need to consider their stability, their financial position, their status in the marketplace. It’s about scalability, and their ability to actually implement the solution themselves and to make sure the product does what they claim it will do.”

Spoiled for Choice?
Of the many considerations facing an investment manager before committing to its choice of vendors, perhaps the most obvious is whether to opt for several best-of-breed systems, which each fulfill a specific function, or to choose a vendor that can offer an all-in-one solution.

“Having all the performance data in the same platform and pulling that directly into the reports cuts down on the validation and the tick-back to any other platforms. When there are separate systems, the data has to be transferred from one platform to another, which makes it harder to have a view over both platforms. Although it’s not impossible, because there are some workflow tools that would do that, we certainly see a big benefit in being able to pull the same validated data into the report, without having to transfer anything.” —Caron Seymour, JPMorgan Asset Management

BI-SAM, a Paris-based risk, performance and reporting solutions provider, supports the latter approach via its B-One offering, which provides performance measurement, attribution, risk analysis and reporting functionality. Peter Ellis, BI-SAM’s COO for EMEA, says this creates operational efficiencies for investment managers.

“You gain significant operational efficiencies because you can be sure that the data being fed into the performance system is the same as the data being fed into the client reporting system,” he says. “You can also be sure of delivering a better service to the end client because you are certain that the performance information in the client report is the same as the performance information being used internally within the investment manager.”