Have You Outgrown Your
Portfolio Management System?
If your system is falling
behind, your business may
follow.
Seven Sure Signs
Technology has empowered the invest-
ment management industry to grow
exponentially over the last 30 years. But
with that growth has come enormous com-
plexitya proliferation of instruments,
24-hour trading, accelerated settlement
cycles, worldwide variations in account-
ing standards, tighter and often confusing
regulations, security issues, more com-
petition, and higher expectations among
investors. On top of all that, the technology
itself keeps changing, with ever increasing
processing capacity and speeds.
Given the pace of change, it is not
surprising that some portfolio management
systems simply cant keep up. Firms might
tweak them to extend their useful life by
degrees, but they do so at their own peril.
Lagging system performance can sharply
undermine a firms ability to perform its
fiduciary duties and may mean missed
market opportunities. Firms that cannot
manage increasing complexity face the
risk, today more than ever, of falling behind
before they know it.
Its not unusual to find that your core
technology platform is no longer capable
of doing everything you ask of it. But its
demise should not come as a surprise. The
time to ask yourself if your system has the
flexibility and scalability to support your
business as it grows is well before you
need to. Here are seven signs that tell you
when you have outgrown your system.
Advent Industry Intelligence
1. You are having data
management difficulties due
to disparate legacy systems.
If you are maintaining data in different
systems or having to re-key data from one
system to another, you are running the risk
of inconsistency and errors. Are you able
to identify the data you need and where it
resides? Can you get data in a consistent
format across multiple systems? Can you
verify that it is complete, accurate and
reconciled among different systems? If the
answer is no, you may need to reevaluate
your platform. You need a system that
eliminates manual data flow, updates all
data with a single change, delivers timely
and accurate reporting, including intra-day,
and makes data easily traceable.
2. The way you communicate
with clients needs to be more
professional.
Investors today expect high-quality
reporting that is clear, concise, and
customized to their needs. This is
especially true of institutional investors.
Firms that can meet those expectations
have a strong competitive advantage over
those that cannot. If your current system
cannot deliver the level of reporting clients
demand, you run the risk of falling behind.
2 | Have You Outgrown Your Portfolio Management System?
Firms that cannot manage
increasing complexity face the
risk of falling behind before they
even realize it.
Client expectations are also evolving with
regard not only to the form and content
of reporting, but also to how information
is delivered. In our increasingly digital
and mobile business environment, clients
expect instant access to real-time
information, whether that means through
a web portal or a mobile platform. To stay
competitive and relevant, firms will need
the flexibility to both issue and receive
communications via any channel of their
clients choosing.
3. Your systems are struggling
to cope with complex global
investments.
Investing in multiple markets means coping
with myriad regional and global regulations
AIFMD, UCITS V and VI, EMIR, Solvency
II, and more. When you look closely at
these regulations, data is at the heart of
themthe ability to maintain, organize and
report accurate, reliable data in a way that
provides transparency and tells a story.
In order to comply with most financial
regulations you need to solve three key
tenets simultaneouslydata management,
workflow management and reporting.
Data aggregation is critical in todays en-
vironment. The ability to consolidate data
from many sources and maintain accuracy
is key to regulatory reporting.
As the data sources expand and collecting
data becomes more complex, firms are in-
creasingly looking to technology providers
to assist with data aggregation and help
assure its integrity. Your solution provider
should have scalable processes that can
collect data from dozens or even hundreds
of sourcesand just as importantly, de-
liver it in a normalized format.
4. You lack integration
between disparate systems
or find it hard to achieve.
You depend on other systems in your
investment process as well as in the
everyday running of your business. Can
your portfolio management system
communicate and share data with other
systems seamlessly? Having to re-enter
data from one system to another is a
drag on efficiency and raises the risk
of errors. Having identical views of
holdings, transactions and cash positions
across the firm from back to front office
eliminates that risk. It is also the basis for
an Investment Book of Record (IBOR), an
up-to-date view of positions and exposure
that is becoming an essential tool for
managing investments effectively.
Integration is essential for reducing risks
and improving efficiency. If, however,
it requires an extraordinary feat of
engineering, with the results falling short
of expectations, you may not be much
better off. True integration is not a matter
of simply connecting systems, but enabling
them to talk to each other.
Its not uncommon to find firms that spread
their portfolio management activity among
multiple systemsone for accounting,
one (or more) for reporting, still another
for reconciliation and a separate system
for managing client information. Firms
may also find they need multiple systems
because their core system does not
support all the asset classes in which
they trade, or may wish to in the future.
If all those systems come from different
companies, getting them to talk to each
other could be a frustrating exercise.
If you have an inordinate number of manual
or offline workarounds, or portfolios
residing outside of your core system, it
is time to rethink your core system. The
point of your system is to centralize and
standardize portfolio management activity
and data. You need an end-to-end portfolio
management solution that can consolidate
the work of multiple systems into a single
platform, built on an open architecture
that allows for easy integration with other
systems, whether from the same provider,
a third party, or even built in-house. Ease
of integration enables you to reduce your
technology footprint while driving greater
efficiency.

5. Your legal and compliance
costs are spiraling.
Fulfilling current and future compliance
and regulatory requirements is one of
the biggest operations and technology
challenges wealth managers currently
face, according to a 2013 global survey of
chief technology officers. The challenge is
largely due to the fact that their current
reporting systems are inadequate for the
surge in regulation that has begun taking
effect throughout the industry. Compliance
project coststhe costs associated with
preparing for specific regulations such as
AIFMD, UCITS V and VI, or FATCAare
outpacing everyday compliance costs.
Gathering and aggregating data from
disparate systems for compliance
reporting is a time- and resource-
consuming process, and can be fraught
with risk. To reduce compliance risks
and cost simultaneously, you need a core
system capable of consolidated reporting,
leveraging automation and integration
to aggregate and standardize data from
different sources. By eliminating the
manual compilation of reporting data, you
can increase efficiency and cut labor costs
associated with compliance, while assuring
greater data integrity and consistency, and
reducing your operational risk.
6. You are getting caught out
by increased investor due
diligence.
After suffering through the financial
crisis of 2008, institutional investors
have become extremely rigorous in due
diligence. And operations have become
a prime target of their scrutiny. The
crisis brought operational risk into the
openthe risk of failure due not only to
market forces, but also to inadequate
infrastructure and controls. Investors are
also increasingly tech-savvy. They know the
right questions to ask and what to look for.
In order to compete for this vital pool
of capital, you need a system that can
stand up to intense investor scrutiny.
You should be able to demonstrate that
you have the controls in place to manage
risks effectively and that you adhere to
disciplined processes. Workflow gaps,
manual processes and workarounds will
compel investors to take their money
elsewhere.
Advent Industry Intelligence | 3
7. You are not getting the
support, service, or functional
enhancements you expect.
As much as the product, you also need to be
looking at your provider. Are they still paying
attention to you after the sale? Do they
provide adequate training and 24/7 support?
Do they have a track record of continuous
product improvement, and a clear roadmap
for future enhancements? Are they listening
to your issues or your ideas?
If you want to be sure your next system
is your last, you also need to be sure the
provider will be there to support you for
the long term. The right combination is a
flexible, highly scalable, open technology
platform, backed by a solid company that
stands by its clients. You need a provider
that not only helps you get up and running but
stays with you to make sure you get the best
performance from the system with minimal
disruption or downtime. Its a two-way,
ongoing relationship. Youll want people who
respond to your needs, resolve issues quickly,
keep you informed, and make it easy for you
to adopt new functionality as it becomes
available.
4 | Have You Outgrown Your Portfolio Management System?
An investment in growth.
The portfolio management system is the
hub of your business. Replacing it has
been likened to a heart transplant. Yet
like a weak heart, a weak system puts the
health of your business at serious risk,
and the time to address it is before it fails
completely.
Technology is an investment. It should pay
dividends in the form of greater efficiency,
reduced risks, and the ability to make
better informed decisions based on data
you can trust. As with any investment,
the choice of a platform and a provider
warrants extensive due diligence. Look
for qualities that assure reliable system
performance now and in the future
scalability, flexibility, ease of integration
and configuration, and compatibility
with third-party systems. Look as well
for a provider that is clearly committed
to services, support, and continuous
improvement.
In short, you want a platform and a
provider that will support you as you
growwhich means investing in a solution
youll never outgrow.
This communication is provided by Advent Software, Inc. (Advent) for informational purposes only and should not be construed as or relied on in lieu of, and does not constitute, legal advice
on any matter whatsoever discussed herein. Advent shall have no liability in connection with this communication or any reliance thereon.
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