When planning for a call with investment management middle- and back-office outsourcing companies, knowing what to ask will make your meeting more productive.
While some information about the outsourcing specialists can be found online, other details are not available, unless you schedule a call or meeting.
Even if you’re getting an answer to a question you may have already researched, talking directly to a specialist adds a human component that is needed when planning to outsource.
You want a third-party vendor that specializes in your software, and knowing there is a team of trained portfolio accounting experts on your system will make your job easier, especially if the software is complicated and/or you don’t have the time to learn the in’s and out’s of it.
You’ve likely done research beforehand, and you may have read about how leading outsourcing specialists can offer customized services to fit your needs.
After introducing your company, the provider will have a better idea how to better serve you, and then you can find out specifically what they can do.
Think about some of the processes you may need outsourced:
It’s nice to know other investment managers that are using the middle- and- back-office outsourcing company you’re interested in. While the outsourcing company may not be allowed to share specific names of their clients, they can still tell you how many firms they work with and a description of them.
If you’re a wealth or asset manager, hedge fund or family office with a certain AUM, it’s good to know if your prospective outsourcing provider works with firms like yours.
Ask about how they’ve reduced costs, improved operational efficiency, or reduced operational risk for investment managers.
See if the provider has client testimonials or case studies. If they’ve received awards or recognition for being one of the best asset management and hedge fund outsourcing companies, that never hurts!
This isn’t a casual question you’d ask a friend or family member when it comes to their work, expecting a “Good” or other one-sentence reply.
To put it bluntly, you want to know if the firm will be around to serve you as long as you need them.
Some firms will charge on a flat monthly fee, and monthly fees will usually be determined by the complexity of work and volume of accounts.
Others will charge on a percentage of the growth in value of the accounts managed, meaning their fees are derived from the performance of your investments.
It’s not uncommon for fund accounting outsourcing firms to have some of their operations offshore with headquarters onshore.
As BPO (business process outsourcing) has gone more mainstream, highlighted by a 2017 survey that revealed nearly one-third of asset managers place outsourcing a high priority, money managers should feel secure in working with qualified third-party fund administrators. These firms adhere to legal regulations, and ensuring accountability and accessibility are all part of a successful business model.
If you want a better feel, you can request to talk with the overseas operations managing director. Also, ask the onshore executive management team about how they collaborate with the offshore team.
You want the transition of your firm’s data over to the third-party provider to be as smooth as possible, and a world-class back-office outsourcing services provider will make the transition seamless and painless.
Ask about what is required from your side to make everything happen, and agree with them on a timeline.
Asking the right questions – and getting the answers you want to hear – are important for knowing if outsourcing your middle- and back-offices is right for your firm.
With this information, investment managers can learn how to get the most out of outsourcing their operations, resulting in lower costs, higher efficiency, and less operational risk.
You may have other questions, but no matter what you ask, simply making the call or scheduling to meet an outsourcing services specialist will have you better informed.