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The importance of a comprehensive portfolio management system

Intermediaries face multiple challenges in the form of imminent new regulations, increasing margin pressure, and ever-expanding lists of customer requirements, especially in the area of digitisation. Solution providers must therefore plan ahead and think holistically in developing solutions for intermediaries.

Intermediaries want to serve their clients in the most efficient way possible, as time is often a rare commodity. A comprehensive portfolio management system (PMS) with stable and tested interface connections to custodian banks can automate manual work, solve many of the challenges intermediaries face in their daily tasks, and support them to remain compliant with existing and new regulations.

While the software needs to be structured in a way that offers intermediaries nearly all the functionalities an intermediary would require, it should also allow for regular updates according to evolving user needs. Further, not all users within the company will have the same requirements for usage, thus the software must also be flexible enough for adaptation and reflect user roles.

When it comes to the software, solutions should assist intermediaries in three distinct ways:

Firstly, software should help intermediaries in their daily work. Not only should the process be efficient, meaning that it eliminates manual work where possible, it should also take into consideration the requirements that intermediaries have in their daily job and thus provide solutions that are well-reasoned. The software solution should define a process to cover, among others, areas of the client relationship, investment simulation, regulations and compliance, client reporting, consolidated valuation, and portfolio management. Ultimately, these areas should be connected and intuitively accessible within the software.

Secondly, the software should help intermediaries to remain compliant with the rules of various jurisdictions, such as MiFID II, where Europe is currently at the forefront. Here again, the software solution needs a process-driven and automated solution to help intermediaries in various fields, such as onboarding, missing information and document alerts, document updates, asset allocation breaches, investment guideline definitions, knowledge and experience gathering, and many more areas that need to be covered. Further, a software provider should have as many interfaces as possible for gathering data from the custodian banks. As ordering, and especially straight-through order processing, is getting imminently important for MiFID II and other initiatives, software providers should also make sure that two-way data processing is enabled.

Thirdly, while having robust interface connections to custodian banks is crucial to gather quality data, the software should also be strong enough to process this data efficiently. Intermediaries should be able to go through consolidated valuation figures, do instant analysis on risk, understand where to attribute the performance, and finally, compare it to benchmark figures. Ultimately, intermediaries will want to show these analyses to their clients in a comprehensive reporting format that can be gathered ad hoc or on a timely basis.

The role of the PMS provider

The provider needs to understand that naturally, most intermediary core competence does not lie in dealing with technology or software solutions. Thus, the software provider needs to put experienced staff at the top of the implementation project, educate intermediaries and, once in production mode, intermediaries should always have the benefit of being accompanied by a competent support team. In addition, intermediaries want a secure yet easy-to-access system via the web browser for themselves and ideally an access solution for their end client, which brings the topic of multichannel access via web client portal and tablet to the agenda.

Meeting all of these requirements is no simple task. Once the model is in place, it should be efficient enough to ensure it does not consume a disproportionate amount of the intermediaries’ revenues. For intermediaries interested in complete outsourcing of non-core business, Expersoft Systems AG has created AM-One AG, an independent and fully owned subsidiary which is a bank-independent, privately owned and operated Swiss company offering a unique and affordable ‘one-stop-shop’ outsourcing solution for intermediaries. AM-One combines complete wealth and asset management software with compliance, back office, implementation, and consultancy services on demand.

Sener Arslan, CFA, Expersoft Systems AG

About Expersoft Systems AG:

Expersoft Systems AG offers Portfolio and Wealth Management platform solutions and services for asset managers, banks, family offices, and other financial services providers. With more than 200 employees, Expersoft Systems AG is successfully operating in the market, serving more than 600 customers worldwide. It is headquartered in Steinhausen, Zug, Switzerland with regional offices in Luxembourg, Stuttgart, London, Dubai, Singapore, Hong Kong, Panama, and São Paulo.

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