From savings to competency: Shifting goals in outsourcing to asset servicing firms
When outsourcing to asset servicing firms first began gaining popularity in the past decade as an option for fund management companies, the potential cost savings were a top factor for consideration. It was, after all, a difficult time for managers dealing with limited resources: Controversies hounded the industry, and the market was reeling from a crisis.
Many firms continue to abide by the same framework that focuses on the financial benefits of outsourcing, one that highlights the savings from not having to keep in-house personnel and solutions to take on the fund administration tasks, for example. However, a shift in outsourcing mindset can now be observed among a growing number of asset managers.
Central to this shift is the emphasis on the upgrading of competency, instead of the savings. Under this new framework, outsourcing is a great option because it represents a chance to deliver much better service to the client investors, by way of the outsourcing partner’s specialization. More than the lowered costs — which in some cases might not even be substantial — the outsourcing enables the asset management firm to draw and retain their clients because they are able to provide topnotch results.
The best outsourcing partners can offer access to state-of-the-art technology infrastructure, and professionals who are well-trained regarding the latest solutions, practices, and industry regulations. Their tools are scalable according to their clients’ needs and operational demands, but take advantage of the latest in the industry. Their pool of talent is composed of people who are strategic thinkers.
Monitoring and reporting are conducted with diligence and meticulousness that results in well-thought investment decisions and proper risk management. And for companies that are navigating multiple markets, select asset servicing firms have the solutions and procedures that are compatible with different jurisdictions, and are as familiar with local legislations as they are with industry and global regulations.
In the end, choosing them is not just a matter of the savings, but in terms of their efficiency and reliability, and how well they can accomplish the company’s goals for its organization, its client investors, and the assets under its management based on its high standards.
Indeed, with the right outsourcing partner in the investments and securities industry, asset managers do much more than just save money. They can develop and execute a fund growth strategy that is achievable and sustainable, retain its existing portfolio, and draw even more client investors.