When you look at alternative investments, you can’t help but see how significantly their use has increased. In the past 12 months alone, there has been a double-digit increase in the use of alternative investments, including hedge funds, private equity, REITS, managed futures and the assorted other types of investments that comprise the category.
There are many diverse types of users—RIAs, family offices, broker-dealers, private banks, pension funds, endowments and foundations, to name a few. But there is a common operational challenge that is shared by all of them—namely, the pressure to provide client statements and reports with greater speed, transparency, accuracy and level of detail than ever before.
This challenge is being fueled by recent advances in technology, a development that prompts clients to expect a corresponding improvement in the quality of data and level of service they’ll receive. If your firm is using alternative investments, you may have personally experienced this rising tide of client expectations yourself.
The Lingering Problem of Manual Data Entry
For many firms, reporting methods for alternative investments have barely progressed at all in the past few years. Today’s firm may still be using manual data entry as it collects data that is supplied via an Excel spreadsheet or PDF, or sent through the mail as a paper statement. These firms may even be retrieving data manually from the web site of the fund/investment in question.
In each of these cases, the “old fashioned way” requires intensive labor and countless people-hours—not to mention the fact that it opens up the possibility for human error and embarrassing delays. That holds true whether your firm is making data from custodians/prime brokers available to your clients on a weekly, monthly, quarterly or some other basis.
The bottom line is that it can be a painful process for you—and it’s not likely to get any better as the use of alternative investments continues to trend upward.
Data Aggregation Can Solve the Problem—Entirely