Ever feel like you are helpless and defenseless in the wake of rising costs and poor operational performance?
Wealth and asset management back-office outsourcing is a way for you to fight back against forces that consume your resources and threaten your firm’s well-being.
Declaring your independence from operational threats is a must if asset managers want to survive and thrive in an environment where fee compression (as one threatening example) is the norm.
For operations managers who are feeling the pressure, it’s time to seek freedom.
Asset Management Back-Office Outsourcing Freedoms
Freedom from Rising Costs
It’s no secret that operations costs keep going up and up, but why should anyone take this lying down?
Middle- and back-office outsourcing can reduce operational costs for asset managers on average 25%, but leading asset management providers could save you 30% or more, and in some cases cut the costs in half.
And instead of having higher and varied costs, outsourcing gives you lower and fixed costs.
Freedom from Employee Turnover
Your operations feels the pain when key members of your back-office leave, and during the time it takes to find a reliable replacement, your reporting quality will likely suffer as you rely on backups who are less talented or experienced in portfolio accounting.
Finding a new portfolio operations associate requires recruiting, hiring, and training, all of which are time-consuming (and costly).
Before you know it, other employees will leave, perpetuating the recruit-hire-train cycle.
Outsourcing allows you to escape the cycle, as the back-office services provider will supply you with trained portfolio accounting specialists to run your software and reports. At this point, it no longer matters who in your firm leaves because the reports will always get done.
Freedom to Attain Operational Scalability
Building on the freedom from employee turnover is the freedom and ability to reach scalability in your operations.
One of the challenges operations managers face with in-house back-office functions is anticipating how much labor they need in response to fluctuating work demands. It’s not easy to get it just right, so the result is you’re either overstaffed or understaffed.
When it comes to address your labor needs, back-office outsourcing specialists are like Goldilocks; they make sure the staffing is always “just right”.
If you need to ramp up or down, the outsourcing vendor can easily add or remove labor from your projects with no negative effects for you.
Freedom from Reporting Errors
Reporting mistakes hurt performance, and having inexperienced personnel reconciling the cash and positions is bad for your organization.
Asset management back-office outsourcing companies have the quality control systems in place to check for reporting mistakes and have the remedies to solve the problem.
In addition, they have the technological resources you might not have in order to automate back-office tasks. By leveraging the resources and expertise of an outsourcing provider, you’ll get your reports done faster and more efficiently. The end result is clean and pristine data and reports for you.
Talk with an outsourcing firm that follows Six Sigma, a methodology that aims to reduce errors to near zero. Followers of this practice have definitely developed systems to ensure quality reporting for their clients.
Freedom to Do What You Want
It sounds so simple and cliché, but it’s true. When you outsource your asset management back-office functions, you have freed up capacity and resources. How you choose to use the extra time and resources is totally up to you.
The saved time might allow you to focus on others tasks that provide better client servicing. With the saved money, you can invest in new technology or add some of the extra funds to your company holiday party at the end of the year.
Declaring Victory over Asset Management Operational Threats
Asset management back-office outsourcing lets you defeat the enemy that is operational risk.
By lowering your costs anywhere from 25% to 50%, eliminating turnover, achieving scale, reducing errors, and giving you the freedom to allocate your time and resources, outsourcing has its benefits (the sweet taste of victory).
Declaring you are no longer a subject to operations threats by making the decision to outsource the back-office, your firm can celebrate its own independence day.
Empaxis is a leading provider of middle- and back-office outsourcing services for asset managers and hedge funds.