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The Right Asset Managers Can Help You Offer Better Client Service, Lower Costs

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For the enterprising RIA firm that’s diversifying its asset management strategies—and is looking for outside expertise in its selected areas of specialization—it’s more essential than ever to choose the right asset management providers.

Sure, it’s a given that you want an asset manager who delivers superior historical performance, whether you’re relying on them for their expertise in fixed income, alternative investments, real estate, micro-caps or any other of the innumerable investment options. But you also want to select a manager who offers something else—namely, operational advantages that not only enhance your client service, but boost your firm’s bottom line as well. 

In terms of data flow, what types of turnaround times are you getting from your asset managers? How would you rate the quality of the data? The consistency? 

In today’s fast-paced operational environment, your clients expect to receive information quickly, reliably and accurately. That’s why many RIAs are finding it difficult to carry on “business as usual” with asset managers who continue to use outdated data management systems. Because the fact is, even if the asset manager’s performance is good, there can be delays in the flow of data to you, and ultimately from you to your client—an impediment for which the client holds you (and not the asset manager) accountable.

Furthermore, in addition to increasing your client service challenges, the data bottleneck can hurt your firm’s profitability. That occurs when your staff is forced to operate in a reduced timeframe on its end to compensate for slow turnaround times from your asset managers. This can result in increased operational costs for you—from hiring and training additional staff to increasing the work hours allocated to complete the reconciliation and reporting processes in a timely fashion. 

To put it another way, you may find yourself using inefficient “solutions” that simply don’t scale.

To find a real solution—one that truly works—you need to select an asset manager whose investment strategies bear fruit,and who has data management systems in place to deliver data to you in a timely, complete and consistent fashion.

Insist on Superior Data Management Now

How do you help maximize the efficient flow of data from an asset manager to your RIA firm—and from there, from you to your client? What’s the best way to hone operational efficiencies and reconciliation processing times?

At the outset of your relationship with the asset management provider, your firm needs to lay out what it expects in terms of the data content that’s delivered, along with the format and timing. Hopefully for both parties, the asset manager already has the requisite solution in place that can efficiently feed your reconciliation and reporting engine. If not, they should agree to implement one. 

The good news is that for asset managers may not have to change operations in a significant way to meet your data expectations. Due to increased demand for more efficient data reconciliation, my firm now works with more than 150 boutique and mid-market asset managers to deliver data in precisely the way they, and their clients, have requested.

Naturally, it’s easiest to ensure that both the asset manager and your RIA firm are on the same page at the outset of the relationship. That’s why, if you’re an RIA firm that is looking at the capabilities of various asset managers, you will want to insist up front that they have the leading-edge data management and delivery solution that you’re seeking. 

If your asset manager does not have a solution in place, you need to weigh the benefits of the asset manager’s performance versus the drawbacks of slower data turnaround times, clients who are less well served and increased operational costs on your end. If you’d like to ask for pointers on how to make an informed decision, please do not hesitate to contact ByAllAccounts.


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