Getting value from your investment reporting.

There are now many middle or back-office tasks within asset management firms where there is little or no competitive advantage to be gained. Is investment reporting one of them – or can real value still be derived, asks Abbey Shasore, CEO, Factbook.

As investment management operations (and software) becomemore commoditised, it is increasingly difficult for asset managers to derive real value from these activities. Middle and back-officeprocessing in particular has become very standardised and there often is little to differentiate one firm from another, yet many investment managers still ‘compete’ in these areas through heavy investment in IT systems.

From an outsider’s perspective, it makes no sense for asset managers to compete against each other in non-core business processes. Take regulatory reports. An asset management firmdoes not get rewarded when it submits a regulatory report one day or one week earlier than its rival. After all, the regulator’s view would be ‘so what – that’s what you were supposed to do’. The entire asset management industry is competing in areas like this where no revenue is being generated.

Relational value

Whilst in the area of regulatory reporting there is no competitive advantage in delivering your report early, in other areas of reporting there is still commercial benefit in getting your reports in on time, in high quality and meeting whatever specific format an investor requires. There is a relational aspect to consider here:if you are delivering client reports to institutional clients, for example, they do care that it is on time and accurate, but they may have their own preference for format and delivery routes. I have heard pension trustees mutter ‘if I have another fund manager phoning me up, wanting me to go through his 300-page report with him I’ll scream’. Yes, some clients may want a 300-page report, but some just want a 3-page report that says: ‘all is well,and we haven’t lost you any money for this period.’

The Cost Transparency Initiative (CTI) is relevant here – anindustry standard for institutional investment cost data. The availability of comprehensive and transparent information on costs and charges is important in helping investors to decide whether investments represent value for money. To this end the CTI has released industry-ready templates, which can be used for the disclosure of costs and charges to UK institutional investors. Whilst these recommendations are not mandatory, asset managers failing to follow the guidance might be viewed in a negative light by institutions – therefore the initiative has commercial significance.

The key point here is that investment reporting (whether client reports, fund factsheets or other such communications) is always client-facing. They are not just time sensitive documentsrequiring a certain level of accuracy – they should be very sympathetic to the views and requirements of the recipient. One size certainly does not fit all in the area of investment reporting.

Manage costs

In terms of fund factsheets, time, accuracy, quality and relevance are all key. A different audience from client reports, certainly (including firms such as intermediaries, for example) fund factsheets nevertheless have their own critical points.

Automation in this area can improve the bottom line by enabling a business to grow AuM or client numbers without increasing operational head count. Producing hundreds of factsheets, for example, which might take a team of four people a week to create manually, can easily be cut to half a day. That is a tangible value, particularly important at a time when asset management firms are being squeezed on fees.


Within many asset management firms, there are teams or departments outside of investment reporting that don’t have the tools that can efficiently produce the material that they require. These teams are receiving numerous requests for ‘reporting-style’ information, but they have to continually retrieve the content via slow, manual processes. In other words, the firm has the data, but the workflow is not optimal.

The picture, however, is beginning to change. Technology exists that can provide an interface with new user groups, allowing those new users to self-create their own content while ensuring that the data being used goes through the same validation and compliance process as the investment reports.

Improved marketing

For example, the method of creating sales and marketing presentations typically involves multiple teams, all manually copying and pasting legacy content. They then combine this content with client reporting output to produce collateral to be used during client visits and sales meetings. This cutting and pasting from Excel is both time-consuming and prone to errors.

Asset managers are looking for a more efficient approach, including the ability to collect data and create a presentation ‘on-the-fly’ without duplication of effort. Firms want to utilise all of their branded and audited content for sales enablement, instead of continually recreating it. This content can now be made available through a reporting solution to create pitchbooks and sales presentations, improving the speed, accuracy and quality of sales pitches.

Win and retain mandates

Ultimately, deploying the right investment reporting technology can enable a firm to secure new business. Through data automation and effective workflow, asset managers can handle more aggressive Service Level Agreements and win more mandates.

It is also well accepted that, used judiciously, investment reporting is a useful tool in good client relationship management, and by extension an important part of client retention strategies.


Investment reports that are created and released for external consumption act as representation for the business and its identity, values and, of course, reputation. They therefore have a worth that is hard to measure but, I believe, is at times underestimated. This applies equally to investment reports that are mandatory andthose that are optional.

With wise counsel, effective management of data and careful deployment, real value can be derived from investment reports that will enrich client relationships and help grow your business.

Abbey Shasore, CEO, Factbook


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