Why Wealth and Asset Managers Are Thankful for Middle-Office Outsourcing

//Why Wealth and Asset Managers Are Thankful for Middle-Office Outsourcing

Why Wealth and Asset Managers Are Thankful for Middle-Office Outsourcing

Middle-office outsourcing gives wealth and asset managers a reason to be thankful beyond just cost savings.

The lower costs are certainly there, and so is more efficient and desired use of one’s time while getting the quality reporting and expertise they seek.

For these reasons, investment management companies are grateful for their partnership with a middle-office outsourcing services provider, and those considering outsourcing will understand why.

Why Firms Are Thankful for Their Middle-Office Outsourcing Services Provider

Recon Reports Already Done_Alarm Clock and Coffee_EmpaxisThe reporting is done even before entering the office

It’s such a great feeling for wealth and asset managers knowing their reconciliation and performance reports will be ready by the time they get to work.

In the past, these firms would require someone to wake up at some ungodly hour to download, process, and reconcile the data before the markets open. Finding someone reliable and willing to get up at 4 o’clock every morning is a challenge, and turnover would certainly be high.

The good thing is middle-office outsourcing companies can perform these tasks for investment firms, allowing in-house team members to start work at reasonable times. Enjoy that cup of coffee and newspaper before starting the day.

The reports are high-qualityHigh Quality Reconciliation Reports_Empaxis

The thing about a middle-office services provider is that they specialize in reporting and ensuring timeliness and accuracy.

The vendor likely follows Six Sigma and therefore has the automated systems and quality control checks in place to provide excellent operational service.

Those who have done reporting know how difficult it can be finding cash and positions reconciliation breaks, as well as maintaining data accuracy in the systems at large.

Having a provider that specializes in running the portfolio accounting software, managing the data, and generating reports will be appreciated by the investment firm.


Read More: Checklists in Investment Operations: Lessons from the World Health Organization


The ability to focus on core competencies

An asset or wealth management company doesn’t go into business for the purpose of being operational experts. Rather, they go into business to invest and make money for their clients and organization.

Despite the valuable support operations provides for revenue-generating departments like trading and investing, operations itself does not generate revenue.

And while firms place a high priority in attracting trading and investing talent, the same cannot always be said for operations, given its lack of cash-generating abilities.

Investment managers would rather focus on what they know and what they’re good at, and a middle-office outsourcing company can handle their non-core operational functions.

Technology expertise 

Portfolio management software for wealth and asset managers is becoming more powerful than ever, but the software can be so frustratingly complex that it’s almost useless and not worth its cost without expertise.

RPA (robotics process automation) makes it possible to shorten task turnaround times and ensure greater reporting accuracy, but implementation is a challenge firms may face.

The rapid technological advances can be a good thing, but for many firms, often it’s too difficult and expensive to keep up. That’s where middle-office outsourcing firms may help.

They have the experience and expertise in running portfolio management and accounting software, ensuring full utilization of system features. They can also implement automation and QC systems to guarantee high-quality data for the reports.

Wealth and asset managers who have struggled with in-house implementation can appreciate the skills of their middle-office operations provider.


Read More:
Reconciliation Automation Tools: Operational Efficiency Solutions for Investment Managers


Free Time with Family_Not at Office Doing Reconciliation Work_EmpaxisThe ability to not be in the office during holidays and weekends

When performing the work in-house, the nature of some tasks is time- and location-sensitive, meaning an operations team member has to be in the office at specific times to ensure the data is downloaded and reports are generated before a deadline.

Sometimes this work interferes with the time someone should spend enjoying a holiday, weekend, or even a vacation.

Instead, they’re reconciling cash and positions on Sunday when they’d rather be out with their family, or they have to cut their Thanksgiving celebration short because they have to be up at 4 o’clock the next morning. And in some cases, vacation days go unused because the work has to get done, but there’s nobody else available to do the reporting.

Middle-office outsourcing providers can handle the time-sensitive tasks and perform the work remotely in a secure facility, which allows the in-house staff to enjoy their rightfully-earned their time off.

Anyone who has given up their weekends, holidays, or vacations will be very thankful to have their free time and freedom back, thanks to the outsourcing provider.

Conclusion: There Is Plenty to Be Thankful for When It Comes to Middle-Office Outsourcing

It really is nice for wealth and asset management firms to spend the time as they see fit, whether it is focusing on core competencies or working reasonable hours with reasonable time off. Middle-office outsourcing service providers help make that happen.

Furthermore, the outsourcing vendor provides firms with talent to implement RPA and maximize usage and ROI of technology, all of which help create higher quality reports in a shorter period of time.

There is good reason for investment firms to be thankful for their middle-office outsourcing provider, and those considering outsourcing may one day be in that same position of giving thanks.

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By |2018-11-20T23:32:50+00:00November 20th, 2018|Blog|0 Comments