What Do Back-Office Outsourcing Companies and Plumbers Have in Common?

//What Do Back-Office Outsourcing Companies and Plumbers Have in Common?

What Do Back-Office Outsourcing Companies and Plumbers Have in Common?

Financial services back-office outsourcing companies and plumbers have more in common than you think.

While a plumber fixes leaky pipes and broken toilets, a middle- and back-office outsourcing specialist does an equivalent line of work for investment management operations.

These specialists will provide daily reconciliation reporting, IT support, and custom services to ensure operational continuity for hedge funds, family offices, wealth and asset managers.

Who on earth would question the importance of good plumbing? We need our sinks, pipes, and toilets to work properly (unfortunately, there is now a shortage of plumbers).

We could try ourselves, but hiring a skilled tradesperson saves us time, and this person will do the job more effectively, as they have devoted their professional career to this line of work. And given your priorities and skill sets, your time is better spent doing something more productive.

Operations outsourcing for advisory firms works in the same way. You could do the reporting and billing yourself, or you could save time by having a team of portfolio accounting specialists execute the tasks effectively and at a lower cost.

Back-Office Outsourcing Companies and Plumbers: What They Have in Common

They Ensure Our Daily Operations and Functions Run Smoothly

Good plumbing enables us to accomplish tasks we expect to take for granted, like taking a shower, brushing teeth, using the toilet, etc.

When the pipes are clogged or leaking, and when the toilet doesn’t flush or when it overflows, only then we realize how much we value a plumber.

Likewise, a good back-office operations enables you to get accurate reports on-time, every day. The files download successfully from the custodian, and the data is properly inputted into your portfolio accounting system. You can run a performance report at any time, and you can rely on it.

But when the files don’t download or you get inaccurate information, the time spent troubleshooting or cleaning up the data slows down your productivity. Either fixing the issues is beyond your abilities, or it’s simply not worth the time and cost, so outsourcing your middle- and back-office makes sense.

Read More:
 8 Questions to Ask Middle- and Back-Office Operations Outsourcing Companies

 

Plumbing and Back-Office Outsourcing May Not Be “Glamorous”, But They Make Everything Else Look Good

If you enter a decent-looking kitchen or bathroom, you’ll assume the water runs, there are no leaks or clogs, and the toilet flushes without incident.

But in spite of aesthetics, a kitchen or bathroom is not fully functional when the faucet, toilet, pipes and shower drainage are not working.

It’s easy to connect objects themselves with functionality, but faucets don’t run on their own. A plumber makes it possible for us to associate an object with functionality.

Likewise, investment advisors can look at an accurate performance report or NAV calculation, but a quality report itself doesn’t happen by chance.

Someone has to ensure the right files are being downloaded from all custodians and the data is being properly translated and inputted into your portfolio accounting software. They also need to perform daily cash and positions reconciliation.

A leading fund administration outsourcing company will do the behind-the-scenes work so your advisors can deliver good-looking reports to the clients.

Good Plumbing and Back-Office Operations Outsourcing Is “Thankless” Work

When was the last time you called the plumbing company and thanked them for doing a good job?

“Hey, it’s been six months, and the drains aren’t clogged. The toilet is flushing pretty well, too. See you later.”

That almost never happens, though you’ll make a plumber’s day if you did that.

While it’s good to step back every now and then to appreciate the little things, we are accustomed to expecting things like plumbing to work by default. People don’t give people compliments for meeting the standard; compliments are for those who exceed the standard. Realistically, you call when you need help, and plumbers expect calls like that.

Good back-office outsourcing companies operate similarly. They can run your daily reports and maintain your IT infrastructure, and they certainly aren’t expecting a congratulatory call on a frequent basis.

“Trade data from Schwab flowed into our system yet again! I love it.”

That would be a call to have, but such a message is unnecessary. As long as the providers know they do the job with no issues, everyone is happy.

If you enjoy lower costs and improved operations as these firms have, then feel free to thank your reconciliation and reporting outsourcing provider. You’ll definitely make their day.

Back-Office Outsourcing Keeps Investment Managers’ Operational Pipes Running Smoothly

You outsource your plumbing needs to a specialist (a plumber). You can also do the same for your middle- and back-office functions.

Investment management firms can outsource their reconciliation and reporting needs to fund accounting and administration experts, which is both cost effective and efficient.

The work may not be glamorous, nor will a good job result in many compliments, but that’s the
nature of these fields.

Like good plumbers, portfolio accounting experts take pride in their work. Their satisfaction is
knowing everything works properly.

You realize the benefits of good plumbing. You should also recognize the benefits back-office outsourcing companies provide for investment managers.

 

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Read More:

What You Lose When Saying “I’m Not Interested” in Fund Administration Outsourcing Services

Top 5 Reasons for Investment Managers to Outsource Their Middle- and Back-Office

What Does and Investment Operations Manager Do? 3 Ways They’re Like Conductors

By |2018-10-19T18:15:21+00:00June 6th, 2018|Back Office Outsourcing|0 Comments