As quarter end approaches once more, investment advisors gather their resolve and strive to implement new system enhancements to client statements before Q2 arrives. We all wish it could be different, but it is simply the nature of the business. Even firms with good-looking statements may rush to enhance them by incorporating new features such as blended indexes or minor report edits prior to quarter end.
Most of the systems implemented at investment advisories are run on a daily basis, but client statements are typically generated on a quarterly basis. Some investment managers produce monthly statements, but they are in the minority. In the near future, these types of periodic statements will become less relevant than an investor’s ability to generate meaningful client statements on demand.
Amending the quarterly reporting process and report packages requires a disciplined process of setting manageable goals, gaining approval, implementing changes, testing systems and resolving potential problems. Those responsible for creating the reports require approval from management, and until they get that final approval, the time necessary to comfortably implement the changes continues to slip away.
“THE ONLY CONSTANT IS CHANGE” -Heraclitus
As quarter end gets closer, it is not unusual for those involved in the project to get mixed messages about what needs to be done for this quarter. Operations staff juggle various responsibilities. Ad hoc requests, changing priorities and management decision delays inevitably create the need to do last-minute work or postpone the project until the next month, quarter, or even year. With these types of delays, it is a wonder that any progress towards creating better client statements is ever made.
At most larger firms, management is comprised of a number of voices that have a say in whether a firm adapts new systems and reports. The decision to change quarterly reports isn’t made in a vacuum. It is a decision that may depend on a firm’s dedication to their current portfolio management system or a need to allocate limited budget resources to other high-priority issues. Good quarterly reports also underscore a firm’s philosophy, so deep thought and considerable discourse can play a part in determining the content and appearance of client statements.
SOME AXYS USERS DO NOTHING WHILE OTHERS THINK ABOUT MAKING A DECISION.
Before you summarily dismiss all Axys users as being hopelessly outdated and technically inept because they haven’t upgraded to APX or moved to another more recently released Portfolio Management System (PMS), you should understand that there are many decent-sized firms out there that are still using Axys to manage hundreds of millions or billions in assets. Though a small group of firms really do fit the preceding description, most firms do not. The majority are firms that understand the current shortcomings of Axys and the potential benefits of APX, but also value the simplicity, efficiency, and reliability of Axys. These firms may have considered Advent’s other offerings: Black Diamond and Geneva, but haven’t managed to find a solution that works for their firm.
As a growing number of these Axys users may be questioning their commitment to Advent, it is only natural that they vacillate to some degree between putting more money into their existing platform or changing the platform altogether. I suspect that many of Advent’s Axys clients now fit into two categories: those who are indifferent and those facing decision paralysis.
Those who are indifferent use Axys like a calculator and will continue to do so until it becomes apparent that they cannot use it any more. Those facing decision paralysis will also continue to use Axys – albeit with some reservations – until another vendor steals them away or Advent makes a bold announcement to continue to support these lost souls with renewed vigor.
In the end, a firm’s need to keep pace with client expectations and technology by providing innovative reporting should win out whether that is achieved by spending money on their existing platform or embracing another. For now, like many in the industry, I continue to hurry up and wait for investment advisors and Advent Software to do something.
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About the Author: Kevin Shea is President of InfoSystems Integrated, Inc. (ISI); ISI provides a wide variety of outsourced IT solutions to investment advisors nationwide.
For details, please visit isitc.com, contact Kevin Shea via phone at 617-720-3400 x202 or e-mail at kshea@isitc.com.