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How to save time and money when implementing a new portfolio management system


There are numerous challenges faced when new IT solutions need to be implemented. swisspartners’ COO Kristian Bader knows best, as his company recently upgraded its existing portfolio management system extensively in order to comply with the demanding regulatory requirements and to provide efficient internal processes. He shares some valuable insights into this process as well as useful advice to asset managers in a similar situation in the interview below:

How does the portfolio management system support swisspartners and what was key for a successful implementation? 

We have been using our existing portfolio management system (PMS) for more than a decade, but never to its full extent. Beside the extensive use as portfolio management and reporting system, the CRM was not used as an integral part. In the course of the MiFID II project, however, this changed completely and all relevant client data (KYC, client risk profile, client investment profile, etc.) was captured into the CRM component in order to ensure full compliance with MiFID II, but also leverage of the integrated solution from our provider. Along that project many related processes needed to be adapted accordingly. The key to success was to assess wisely where we could rely on the provider standards and where we requested a tailoring to our needs. Finally, as you have to deal with people, I would say that at least 50% of the overall success is owed to proper change management.

swisspartners is now on the way to connect their upgraded PMS bi-directionally with Julius Baer. The aim is to foster efficient end-to-end processing of securities orders also with the support of Julius Baer. Could you elaborate on the scope of this project?

swisspartners does not sell its own financial products nor does it have direct access to exchanges and brokers. Therefore, we use the access and products of our custodian banks. So far, swisspartners’ PMS automatically receives data feeds of our main custody banks on a daily basis in order to obtain the latest data (transactions, positions) of our clients’ portfolios. With regards to the few other custodian banks we collaborate with, we obtain their bank statements either electronically or in paper, OCR read them and book the values in our PMS.

To further improve overall processes such as efficiency, risks and real time availability of information, swisspartners decided to connect its PMS to the order systems of Julius Baer, a so-called FIX interface. This enables our portfolio managers to directly place their orders in the PMS, without any manual transaction such as a phone call, e-mail or fax to the custodian bank – just like a trader. The placed order is routed directly to the bank, gets executed immediately and an execution message is sent to the swisspartners PMS in no time.

The updated PMS is much faster and provides more accuracy. From a qualitative perspective it is clearly better. From now on, we are able to document all steps of the trade execution process. This makes us fully compliant with the more stringent regulatory environment, including MiFID II.

Could you give some insights regarding the implementation of the FIX interface project?

To manage the implementation of such IT solutions is an intense process. To carry it out, you need:

  • a good software provider,
  • employees with a good in-house understanding of the needs and how the changes will then actually be implemented in the companies processes,
  • specialists supporting the end-users and teaching them new functionalities and processes.

At swisspartners, we used a classical project management organization. A project manager, supported by project teams with specialist competence, was placed in charge to carry out the investment process, the implementation of KYC and the interconnection between banks. Around seven people were working on the project on a very regular basis for around six months, which was the time span between the kick off meeting and the green light to go live.

To implement the FIX interface is the easy part of the project. Once it is up and running it is crucial to get the employees to make the changes and to use the new software to its full extent. In order to ensure a smooth transition, we held weekly meetings with all involved users and explained how the new software would affect them and more importantly, how they should be using it. Several training sessions were eventually also held with the final users – the relationship managers and assistants – to teach them how to use all new functions at hand.

What are the main challenges typically faced when carrying out an IT project?

To reach mutual understanding between the people involved. You need to bring the internal team together with that of the software provider to ensure that they understand the actual requirements, as well as each other.

Then, when the system is up and running, the end users need to be trained so that they know how to use it as planned. Today, I would say that our end users make use of approximately 60 percent of all functions at hand – despite the (extensive) training given. That said, there is still a long way to go.

What type of support did you obtain from Julius Baer during the FIX interface project?

When the project was started, we not only analysed the situation with our software provider. swisspartners also involved Julius Baer due to its expertise and neutral point of view. The bank provided an experienced project manager in the field of IT who was able to manage the project professionally. It was very helpful for swisspartners to have him on board to benefit from the specialized know-how.

Where do you stand in the process right now?

The FIX interface between swisspartners’ PMS and custody banks’ trading systems is in the testing phase. It should be operational as of the third quarter of 2018.

What recommendations would you like to give intermediaries thinking of introducing similar IT solutions?

You need to be aware that implementing a portfolio management system from scratch and linking it to custody bank systems is a very tedious process. No asset manager can differentiate itself and stand out from the competition by serving its clients differently through a portfolio management platform.

I would therefore advise any asset manager to find support or share the portfolio management platform that is needed. There are several offerings in the market, including the one of swisspartners. For any asset manager it is an option to use swisspartners’ infrastructure for a regular fee.

For no asset manager does it make sense to build up an independent platform on its own. This is definitely not part of any asset manager’s core business. It is costly, as well as time and labour intensive. Collaborate with other asset managers, e.g. swisspartners, to share costs.

Thank you, Kristian, for sharing your experience with us.


Interviewee
Kristian Bader, COO at swisspartners


About swisspartners

swisspartners Group Ltd. started off as an asset manager back in 1993 and has since broadened its portfolio to include family office and fiduciary services, trust and corporate services, as well as life insurance policies and infrastructure services (B2B). This offering enables swisspartners Group Ltd. to serve its clients in more areas than just the core business Asset Management.

swisspartners Group Ltd. exclusively serves private clients in the high-net-worth segment (with liquid assets exceeding 1 million Swiss francs). They are mainly domiciled in the EU, though approximately a quarter of them are domiciled in Switzerland and the remainder in the US. swisspartners Group Ltd. currently manages more than 5 billion Swiss francs.

www.swisspartners.com

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