In today’s ever competitive and fast paced environment, service providers need to face up to the challenge of rising operational standards that have been triggered by the inflow of institutional in
In today’s ever competitive and fast paced environment, service providers need to face up to the challenge of rising operational standards that have been triggered by the inflow of institutional investors into the industry. To survive in the alternative investment fund servicing environment, service providers must keep pace with the changing needs of clients and their clients’ investors. Providing a quality service in a timely and accurate manner and monitoring key performance indicators can help to ensure the delivery of operational excellence. Indeed, service providers need to be aware of market trends and must anticipate the impact of such trends on their businesses. Ultimately, it is the investors that dictate these trends.
Choosing the right service provider enables the client to focus on its front office investment management activities rather than focussing on operational and back office administrative issues. The service provider must play the essential role of providing support to the fund managers to be able to claim a value-added role. Investment managers will typically prefer to outsource as much of the operational burden as possible, so as to benefit from economies of scale that can only be achieved through large operating infrastructures. Global fund service providers such as Fortis are able to invest in state-of-the-art systems and architectures that can lead to greater automation of processes. Global service providers are also able to take advantage of multi-region offices to provide complete 24 hour coverage. The right systems are essential to gain efficiencies, which ultimately result in lower costs.
Fortis views client relationships as partnerships and can therefore add value by offering its clients access to a greater depth of professional talent and a broad range of services. The firm has focused on creating a highly efficient model which is supported by experienced and dedicated staff, best in class systems, client support, relationship management and a host of other support units to deliver timely, accurate and quality reporting to clients. Clients requiring more frequent reporting are compelling service providers to process information on a daily basis. The systems used should have the flexibility to deliver added value reporting as well as the ability to service clients from multiple locations, if required.
For global service providers, systems are paramount to implementing a truly global platform where all client servicing processes and procedures are uniform across the globe. Creating global uniformity provides the global service provider with a stronger foundation in which to service clients in the long run. Those who will survive as alternative providers are those who can provide operational excellence, can anticipate and deliver on clients’ needs and finally those who can develop and adapt to market changes as the business grows.
In addition to meeting the client needs from an operational perspective, service providers will typically appoint relationship managers to understand and anticipate future demands. The relationship manager should know the client in terms of its funds and products, strategy, organisation, including key personnel and structure. Knowing the client is fundamental to assisting in the growth of the client firm, which in turn should lead to growth in the service provider’s business. Managing the client in an open and trustworthy manner is key to a successful relationship. The client should also understand the service provider’s organisation so that both parties can mutually benefit from each other’s business needs, knowledge and capabilities.
Philip Craig, Regional Director – Europe, Fortis Prime Fund Solutions
