Time to circle the wagons and review your investment reporting process?


Many investment management firms take a DIY approach to their investment reporting, relying on highly bespoke systems developed by the IT department. There is nothing inherently wrong with this approach – but can it only take the firm so far, asks Abbey Shasore, CEO, Factbook.


A US investment management firm we were talking to recently characterised it beautifully: ‘’We are currently circling the wagons to get a discussion about this [automating our investment reporting] on the calendar”. The firm had clearly realised that its investment reporting process had reached a critical pain threshold. Their conundrum is, do we continue to bear that pain, or do we say: ‘Time out – let’s call in investment reporting specialists with software that can take the pain away’?

‘Circling the wagons’ paints a picture of a defensive move, but it also signifies a regrouping to form an inner, core strength. It involves searching for an approach that is right for today’s, evolving business. It might mean acknowledging that, whilst the investment reporting process may well have been adequate at the time of deployment, it is time to question whether it is suitable now. Will the arrangement be sufficient going forward as the firm’s Sales and Distribution teams are tasked with ever-increasing goals?

Rather than an admission of weakness, it’s a brave testimony that times have changed, the firm has progressed and what used to work in one circumstance is no longer appropriate.

What, then, are the five key pain points that indicate to an investment management firm that now is the time to circle the wagons and question whether the deployed solution should be created and maintained internally or by a specialist vendor partner?

The volume indicator

It may be that your firm has won a number of new mandates recently and the volume of reports being generated by the firm has increased substantially. Perhaps the current, labour-intensive system has been creaking for some time now and the sudden influx of new business has pushed the Investment Reporting team to its physical limits.

The client indicator

Investment reporting (whether client reports, fund factsheets or other such communications) is necessarily client-facing. Reports should be very sympathetic to the views and requirements of the recipient. A firm that has traditionally had one type of client (such as institutional investors) will tend to have an investment reporting approach or process that is geared up to the needs of that market. If the same firm was to begin winning mandates from the private client market, for example, would the same processes still work in the new paradigm of altered focus? How flexible is your investment reporting system to cope with changes in the type of data required, its presentation style or even its method of delivery?

The functionality indicator

It may be that an investment manager has functional needs that have emerged recently – needs that it cannot readily satisfy. For example, the Marketing team may have a desire for some very unusual displays of holdings data, something that the investment manager simply cannot create without deploying teams of staff on manual workarounds. The firm may want to know if a series of manually intensive tasks involving Word and Excel can be structured into an automated process.

The risk indicator

Risk in the area of investment reporting is not only pervasive but it also manifests in a number of different guises. There is a point in the growth of a firm where operational due diligence becomes a requisite for winning certain types of mandate and risk checks finally reach the door of the Investment Reporting team.

First of all, risk is inherent in all manual processes. This form of risk is hard to measure and hard to mitigate. Hand in hand with labour intensive processes or bespoke systems that have been developed inhouse over many years comes keyman risk. This form of risk is seldom if ever acknowledged; detailed knowledge and expertise is held by a small number of staff, without which the investment reporting process would grind to a halt.

There is also the reputational risk to contemplate: the risk of making a mistake and news of that error reaching the market. Again, this kind of risk is not readily quantifiable, but its impact can be immense.

The strategic indicator

When an investment manager is seeking to expand its business across multiple jurisdictions or is looking to centralise its reporting operations and benefit from economies of scale or consistent style and branding, an automated system can be immensely beneficial. For example, an asset manager may be attempting to satisfy global factsheet requirements such as multi-currency or manage workflows across regions. Automated translation and multilingual capabilities may also be critical, as is the ability to centralise reporting while considering specific regional requirements.


Many firms that are beginning to scale up their investment management operations are becoming increasingly aware of the inefficiencies (and risks) of their long-established inhouse reporting approach. Some realise that the manually intensive processes that they recognised but tolerated when their business was small are now threatening to come apart at the seams during the key periods of the monthly or quarterly reporting cycles. Others begin to question whether their investment reporting remains fit for today’s purpose – the purpose of the business as it has evolved from whenever the extant in-house solution or processes were first put in place.

If any of these five indicators sound painfully familiar to your firm, then it might be time to circle the wagons and review your investment reporting process.

Abbey Shasore, CEO, Factbook


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