If you feel frustrated, angry or disappointed with the service you’re getting, then it’s time to think about a new middle- and back-office operations outsourcing provider.
Many investment managers’ profit margins are getting squeezed, and outsourcing is a good way to reduce operational costs and increase profit margins.
But with so many things going wrong, you’re not enjoying the benefits. The cost savings and efficiency gains are real, but now it’s a matter of finding and switching to the right outsourcing provider.
Reasons Money Managers Should Find a New Middle- and Back-Office Operations Outsourcing Provider
Frequently Delayed Reports
Leading fund administration outsourcing companies will deliver their reports by a time you specify in the contract. With the exception of delayed data from custodians or network issues on your servers, the reports should be done on-time.
One of the benefits of outsourcing for investment managers is the ability to get the reconciliation and performance reports done overnight, and you see them first thing in the morning. If you’re being let down constantly, time to switch.
Reconciliation and Performance Reporting Errors
Cash and positions balances are constantly off, the fixed income securities are inputted improperly, and there are missing prices and other necessary files. It’s one thing if a perfect report is delayed, but it’s another when it’s delayed and full of errors.
Poor Communication with You, the Client
Does it ever feel like your back-office outsourcing team is trying to avoid your calls and emails? You send an email requesting a task to be completed, but they don’t respond in a timely manner, and it never gets done? Or what about when you call them asking why the performance report has errors (or why it’s not done, period?), but their responses suggest they are trying to avoid your question?
In that case, it’s time to think about a new middle- and back-office outsourcing provider. Investment management outsourcing has been a growing trend, and the trend could only continue if there are more sophisticated and professional middle- and back-office services that can meet the needs of clients with high expectations.
Hedge funds, wealth and asset managers like Cornerstone have reaped the benefits. You should, too.
Not Flexible or Sympathetic to Your Firm’s Needs
You request a custom service, and your provider replies with a cold and rigid reply:
“We don’t do that. It’s not in the contract.”
On one hand, the vendor is under no obligation to perform a task that isn’t in the contract, but on the other hand, the way they respond to you asking for help says a lot about how real their commitment is to your advisory firm.
Even if the contract does not oblige them, did they not sound sympathetic to your needs?
A top-notch middle- and back-office operations outsourcing provider would show sympathy and flexibility to your needs, even if there was little or nothing they could do. In some cases, they might be willing to go the extra mile to serve you, or they will be open to re-defining the terms of the contract.
As long as you don’t “abuse” their commitment to serving you by you making multiple requests outside of the contract, then you’ll learn how dedicated they are to your investment management operations.
No Improved Efficiency
You chose to outsource because you learned about the benefits:
- Cost savings
- Greater operational efficiency
… except you didn’t see improvements in operations, and the lower costs and scalability you were expecting have evaporated, because your own team is either doing the work yourselves or fixing the mistakes by your provider.
Finding the Best Operations Outsourcing Company for Hedge Funds and Asset Managers
If you’re not happy with reports delayed and full of errors, bad communication, lack of flexibility and no operational efficiency improvement, then you should consider another team of outsourcing specialists.
Read their reviews and case studies, talk with them directly, and see how they can customize their services to fit your needs, rather than you change your ways to fit their needs.
The benefits of outsourcing are there for the taking; you just need the right team of middle- and back-office reconciliation and reporting experts.