If investment managers are unhappy with the services that they’re getting from their legacy system provider, there may be a good explanation why.
To clarify, not all investment firms are dissatisfied with their legacy technology, and in spite of a system's limited capabilities, they can receive an adequate product and level of support from the provider.
Still, not all is well. According to a WealthBriefing article, 68% of survey respondents say “learning about and keeping up with new technology is a top challenge.”
What's more, nearly 8 in 10 advisors have lost business due to inadequate technology, according to a Broadridge survey.
Do you have similar concerns?
What's worse, the legacy technology provider may show little concern to your needs; it’s not just your imagination if you sense apathy when you call the support team.
And it’s not by accident or coincidence the quality of product and service may have eroded.
It sounds harsh, but there is some truth to the statement.
The service you’re using might be one of many offerings, and for the software provider, what you’re using is not as important or profitable for them.
New management, new competition, and changes in the marketplace will shift companies' priorities. New products will be developed in other areas.
As a result, resources will be allocated to support the new offerings. If you're using the older systems, you will be left with the scraps.
Have you ever called for support, and you wait a long time for an answer. Maybe they reply to call your or email several days later. Sometimes, they do not reply at all. When you do get a response or speak with someone live, you're not confident they will fully deliver on what you’re looking for.
While the legacy systems service providers would never directly say you’re not a priority, there are enough clues to reach that conclusion.
It may not be that they “don’t care”, but the legacy services provider just doesn't have the resources for new developments.
They’ve either already invested in other areas, or they’re just not driving in the revenues that would have supported those needed upgrades.
They might know what they need to develop, but without the necessary cash flow, they can’t make the investments. In the end, the clients will be dissatisfied and reminding the service provider about what needs to be done. It’s a vicious cycle.
Some of the improvements you want to see won’t happen anytime soon so long as finances are an issue.
Similar to offering a new line of services, the software provider may feel like they can let the legacy systems that the current clients are using run its course.
As resources are directed elsewhere for new products and services, they figure they might as well get the most out of what they already have without having to put too much extra investment into it.
They know the clients will eventually move over to one of their new services, or that they will switch to a competitor software altogether.
But in the short term, there is a big enough clientele to satisfy revenue requirements.
The portfolio accounting software company may also know that with an older and outdated system like theirs, it’s very difficult for the clients to switch to a rival service. There will be integration and compatibility issues, as well as challenges with mapping the data.
A successful migration of the data could take several months, and in some cases, well over a year.
If it is that much of a hassle to switch, why bother?
In the end, you feel stuck, and the worst part is, the services provider knows that you’re stuck.
There are certainly pros and cons for investment firms in maintaining their legacy systems.
While these firms may be satisfied with what they’ve had for years, a growing number of investment companies are no longer content with the old systems. Newer and more powerful technology can get the job done better and faster.
And there is a “dark side” to legacy systems that stem from business decisions, changes in management, changes in the marketplace, and competition. Whatever the influences may be, the end result is a portfolio accounting software that isn’t improving.
But it’s not all bad news.
Just as the legacy services providers know how hard it is for their clients to switch to a rival system, new service providers like Empaxis have developed a modern, cloud-based platform alternative in TAMP1.
The platform that handles all data management, portfolio accounting and reporting needs. Even better, we help you migrate to our new system in a shorter timeframe than previous lengthy migrations.
No matter what, always keep your options open.