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Is outsourcing client reporting still ‘losing control’?

ReportsAsset managers should no longer be fearful of outsourcing their client reporting, says Abbey Shasore, CEO of Factbook

Back in April 2007, in an excellent article in Funds Europe magazine entitled ‘Client Reporting: Losing Control?’, the issue of outsourcing client reporting was discussed. The article noted that: “Most European firms have steered clear of outsourcing client reporting, preferring to remain in the driving seat”. 

The key reason for not outsourcing client reporting, cited at that time, was that companies ‘feared losing control of their client base and getting out of touch with clients’. One asset management firm was quoted as saying: “Client reporting cannot be outsourced as we need to make sure it’s done the way the client wants it”. But nowadays with customisation this should no longer be an issue.

Have then, the barriers to outsourced client reporting changed in the last 14 years? Well, in some regards they have and in others they haven’t. Whilst the shape of debate may have changed over the years, the fundamental question about ‘losing control’ is one that remains relevant and important to revisit in 2021.

Keeping control

The number of asset managers who outsource their entire reporting process has increased since 2007, but not significantly. The majority of UK asset managers, in my experience, still produce their own client reports, be it through their homegrown systems and manual processes or via an off the shelf reporting solution.

Fear of losing that control remains an obstacle to outsourcing – whether rightly or wrongly. But if an asset management firm works with the right partner (vendor or outsourcer) that is committed to working alongside the asset manager, the client should be able to retain control over the all-important content whilst delegating the ‘heavy lifting’ of automation and workflow management to the partner.

Client reporting can be ‘done the way the client wants it’ – and at high volumes - using careful but sophisticated automation. This applies to both retail and institutional reporting, but this tailoring must be tempered by the need for scalability. As investment managers scale up and their businesses become more complex, the need to speed up the production and delivery of client reports becomes ever more critical. Technology has been a vital enabler for the client reporting process and the automation of client reporting is becoming widespread.

Customisation and confidentiality

Automating the reporting process will usually mean that reports will be consistently rendered from month to month. Customisation helps ensure that stakeholders continue to receive the information they are used to, whenever they need it and in the format they want, with the possibility of making changes.  

Back in 2007, confidentiality was cited as another obstacle to outsourcing client reporting. Advances in computing technology and reduced costs of components have made managing confidential data so much more possible, so much more cost beneficial, I do not believe that confidentiality would remain a stumbling block to outsourced client reporting.

In 2007, an asset manager stated: “Another reason firms are reluctant to hand client reporting over to third parties is that client reports are a useful sales tool.”  

Today, asset managers know that the secret to unlocking their client reports for use by sales teams is not whether to outsource or not – it’s about centralising and controlling data. Firms want to utilise all their branded and audited content for sales enablement, instead of continually recreating it. With effective data management, this content can now be made available through a reporting solution to create pitchbooks and sales presentations, improving the speed, quality and most importantly accuracy of sales pitches. 

Relationship management

One area that has progressed considerably since 2007 is that of relationship management. Most reporting vendors today will highlight the importance of reporting in client servicing, as a tool for enhancing and maintaining a good level of relationship management. 

Perhaps a reflection of the passage of time, back in 2007 the subject of relationship management wasn’t deemed to be sufficiently worthy of a mention. Client reporting was still very much a box-ticking exercise at the end of the investment lifecycle.

Current technologies enable asset managers to use outsourcing to produce scalable, customisable, confidential reports within the control of their own Client Reporting team – delivering value to investors and sales teams alike.

Outsourcing client reporting is not to lose control at all – it is to refocus on what’s important: the client and what asset managers must tell them. All this is possible if you work with a partner that is capable, flexible and equipped with technology that will enable you to have complete control in the areas where you need it most and carefully managed, delegated control in all other areas.

© 2021 fundstech



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