Tue, 13/05/2014 - 12:20
While improving operations remains a priority for investment managers, a survey from SEI indicates operational capabilities are also becoming a key competitive advantage.
The poll reveals that more than three-quarters (77 per cent) of investment managers believe there is a ‘somewhat strong’ or ‘very strong’ link between their operational capabilities and their business competitiveness and performance, while 69 per cent believe that their investors also see a ‘somewhat strong’ or ‘very strong’ link.
Despite the expressed importance of operational capabilities, respondents identified a number of key operational challenges. The top three cited were:
· Data and information management (33 per cent)
· Operational complexity (31 per cent)
· Growing regulatory/compliance demands (22 per cent)
Tackling better data and information management may also be important in delivering customised reporting and analytics – items which almost 40 per cent of respondents said their clients ask for most frequently. Customisation continued to be a theme, as respondents reported that 33 per cent of clients ask about more customised portfolios.
Although investors appear to desire more individualised solutions, investment managers seem to be meeting their clients’ transparency needs as only six per cent said that ‘more transparency’ was what they were asked for most by clients.
“Having strong operational capabilities has been moving up on the priority list for investment managers for years now as they see that superior operations can actually differentiate their firms in the marketplace,” says Ross Ellis, vice president, knowledge partnership for SEI’s investment manager services division. “In today’s climate, it’s critical for investment managers to find new ways to enhance and streamline operations in order to support investor demands.”
Respondents were also asked about the most important factor in their ongoing operations success or ‘operational fitness.’ More than two-thirds of those polled (68 per cent) said that advanced operating technologies, together with having the most knowledgeable people advising you, were equally important. This integrated mix of technology and expertise was consistent with what managers said was their greatest challenge, apart from delivering expected performance. The highest ranked answer (36 per cent) was ‘providing investors with education & consulting above and beyond my firm's specific mandate.’
The poll was conducted at SEI’s 11th annual Executive Conference, a client-only event attended by more than 100 C-level executives across management operations, distribution, and investment professions.
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