Fund administration outsourcing should no longer be viewed as merely optional, but rather an integral part of your long-term strategy.
The world is changing fast, and you have to keep up with the changes.
To stay ahead of the competition, you have to leverage every synergy and opportunity to the max.
Outsourcing is one way investment firms can stay ahead.
Long gone are the days when investment managers viewed the concept of outsourcing with skepticism.
James Yates, CFO of IK Investment Partners, accurately describes the current situation:
"There is a trend to to outsource, and not just in fund administration, but also in IT services, regulatory compliance, tax compliance, and HR-related matters."
According to a FlexShares survey, 32% of RIAs outsource in some form, up from 27% in 2020. And of those that outsource, 95% of those surveyed said they were 'satisfied' or 'very' satisfied with their outsourcing solutions.
And the trend only points to more firms leveraging third-parties in the future.
When you do proper research, you'll find that fund administration outsourcing providers are not just a bunch of fly-by-night swindlers ready to make a quick buck and compromise your data.
In fact, they are legitimate organizations that take security seriously. They are also audited and certified by industry regulators, like Empaxis is, and they have good reputations to uphold.
Empaxis knows there's a demand for reliable fund admin support, and we are ready to meet the needs.
Every fund manager must track their performance, and they need to know that the reports are accurate and delivered on time. Empaxis has a proven track record in doing just that.
Of course, we follow investment performance reporting best practices.
Investment managers need accurate net asset value (NAV) amounts to determine how much each share of the fund should be worth. All relevant analyses and decisions can be made thereafter.
Empaxis has plenty of experience dealing with NAV's for mutual funds and ETFs.
It's an entire process of downloading statements, formatting, renaming, and storing the files. Then it requires extracting data and sharing in a report internally or with client.
Through Robotic Process Automation (RPA), Empaxis has automated the alternative investment statement processing.
Along with investment automation solutions, investment firms need financial technology that streamlines workflows, platforms and dashboard that provide real-time investment and reporting analytics, as well as a central hub from which to view all their data.
Investment firms use our turnkey asset management platform, TAMP1, to achieve those very goals.
According to an AssetMark survey, one of the main challenges for advisors is scaling their business for growth and spending time on business-building activities, including client financial planning, practice management, and new business development.
With outsourcing, you can scale more easily and focus on revenue-generating activity.
In the FlexShares survey cited above, 53% of respondents saw a correlation between outsourcing and the ability to generate more revenue.
When you partner with experts in fund administration support, you can trust in their experience. Because fund admin support is all they do, they are naturally better at it. After all, it's their reason for being.
They build the process efficiencies after years of experience, and they do the work better and faster for you.
And according to a Northern Trust study, asset managers focus on outsourcing to improve efficiency and an “increas[ing] reliance on technology to solve multiple challenges, including improved access to, and management of, data.”
Just as outsourcing providers develop greater efficiencies, they're able to pass the cost savings on to you. That's part of the attraction!
Another way outsourcing saves you money is it keeps costs fixed. Keeping costs stable when inflation is at 40-year highs... outsourcing is one of the few ways out there to do that.
When you outsource fund admin functions, you free yourself from the burden of hiring internally, dealing with turnover and talent shortages.
Without weighing yourself down in administration work, you have the flexibility to pivot. You can more easily focus on activities that you know will bring the most benefits for your organization.
It is abundantly clear that investment firms have much to gain by partnering with fund administration outsourcing providers.
In fact, there's a lot that they lose if they don't.
To have an entire team that can handle reports, NAV calculations, process private investment statements, and deliver a centralized data and reporting hub, that's a huge value-add.
At a minimum, outsourcing is an option worth exploring and discussing with trusted services providers like Empaxis.
Our monthly newsletter features helpful resources, articles, and tips to implement at your investment firm. Enter your email below to subscribe: