Why Reporting on Investments Needs to Undergo Reform

Reporting on Investments
Reporting on Investments

Topmaxtech.info – Reporting on Investments, As a result of their reluctance to become early adopters, many members of the investment management community have, up until this point, resisted pressure to fully digitalize and automate reporting. Before making the jump to a new technology, companies will frequently wait to see if their competitors have already successfully integrated the new technology. However, across the board in investment management, there has never been a greater need for a significantly different strategy to be utilized when reporting on investments.

Delivering higher returns, as well as being able to demonstrate that you have delivered higher returns, is more critical than it has ever been before, necessitating the use of advanced analytics and reporting. It is also putting a pinch on costs, putting pressure on businesses to cut the total cost of ownership for their information technology technology stack and legacy systems. In order to reach operational alpha, it is necessary to come up with solutions that are more efficient.

In this ever-changing environment, the implementation of a data-driven and flexible approach to investment reporting can assist asset and wealth managers in regaining the competitive advantage they had previously enjoyed.

Creating a dialogue that goes in both directions for asset managers

Asset managers are going to need to concentrate on cultivating stronger relationships with their investors as the level of competition in the business continues to rise. The difficulty they have is not limited to only including a variety of facts, analytics, and charts into their reports. It is shifting from a reporting experience that is static to one that is more like a dynamic discussion, all while establishing reporting processes and feedback loops that are more efficient.

In order to provide performance reports that are more insightful and more suited to the specific requirements of asset owners and allocators, asset managers need to examine the manner in which essential information is delivered as well as the timing of such deliveries. This requires changing the communication process from one that merely involves scheduled reporting to one that uses a model that is more on-demand and scalable. However, reporting is still dependent on dated systems, unchanging procedures, and human workarounds at a significant number of companies.

Report builder tools provide companies with the ability to consolidate data from all relevant sources and visualize performance and risk using charts and tables that can be highly customized to meet their specific needs. This presents a significant opportunity for businesses to increase their profitability. These technologies provide you the freedom to quickly respond to client demands (for instance, to add stress testing for COVID-19 and climate change, or to provide customizable scenario studies), and to tailor reports specifically to the requirements of end-users.

Redesigning the client experience for the private wealth sector

Even while the ever-changing customer experience is a popular topic of conversation in the private wealth industry, the majority of firms have not yet put very much of what they have said into practice. If you read a lot of articles about the industry, you could get the impression that the entire financial services sector is much ahead of the curve when it comes to customer experience technologies. However, despite their best intentions, many private wealth management companies have not yet taken the plunge into implementation because they are struggling to keep up with the barrage of day-to-day administrative and management obligations.

Although reporting is an essential aspect of providing excellent service to clients, the practices that are most common in the private wealth management industry have not caught up to the hype. However, customers’ expectations of the service they receive from their wealth managers are constantly altering as a result of the clients’ increasing exposure to increasingly sophisticated digital interactions across all aspects of daily life.

However, customers do not want to be inundated with information. Instead, they are searching for enhanced insights, which are meaningful, usable, and personalized analyses that make sense of the data overload and give conclusions that are simple to understand and can be used in the real world.

Companies who commit to delivering a streamlined, responsive digital service that adds value for customers in a manner that is as close to real-time as possible and that is kept up to date with the most recent capabilities will be the most successful. Reporting systems that are fully automated are now considered a standard component of private wealth management. If businesses want to maintain the competitive edge that high-quality data and digitalization bring, they need to keep up with the pace of change.

A Comprehensive Look at the Owners of Assets

Asset owners, who are one of the most prominent end-consumers of reporting data, are beginning to exert more influence on the path that will be taken. To this point, asset managers have been in charge of the messaging and how their investments are presented, while asset owners have been left to their own devices in terms of reconciling the many reports they receive from the various managers in order to carry out plan-level due diligence.

The transition from active to passive management of assets has led to an increase in the amount of pressure that is placed on active managers to demonstrate the value that they provide. As a result of the proliferation of passive investment vehicles, reporting requirements established by owners of assets have become far more stringent. Because some owners of assets have brought fund management in-house, the pressure on active managers to report with increasing detail and transparency has increased accordingly. Because asset owners are more frequently engaging in direct investments in private equity and real estate, the pressure on alternative asset managers to improve their level of transparency has never been higher than it is today.

In a similar vein, private wealth managers increasingly strive to provide their clients with consolidated reports that are both comprehensive and delivered in a timely manner. And customers have come to anticipate it to an increasing degree. Individuals with an extremely high net worth generally have a multitude of financial accounts, portfolios, trusts, and managers at their disposal. Even though they may get detailed reports on certain aspects of their holdings, they frequently do not have a complete view of the allocations, performance, and risks associated with their investments. The solution is to utilize consolidated reporting.

Technology and the state of the reporting industry in the future

At their core, investment reporting processes ought to incorporate a near real-time, bi-directional access strategy for data and reports. It is time to move away from the old method, which involves pushing data and reports onto investors on a relatively rare basis (often as infrequently as once or twice a year). This technique should be used as a component of a more comprehensive approach to reporting, the primary focus of which should be on completely revamping the customer experience.

The adoption of a fully digital and automated future for investment reporting enables businesses to not only improve the efficiency of their operations but also better manage their overhead costs. For instance, if an organization delivers client reports and statements via a drag-and-drop interface with pre-made templates, it can free itself from mundane, time-consuming operations. Companies are also increasingly outsourcing data management and reconciliation to third-party suppliers. This frees up a significant amount of staff time while simultaneously lowering the risk of errors and delays in the reporting process.

The trajectory of financial reporting for investments

Up to this point, reporting has served primarily as a means for disseminating historically relevant information on a regular basis. Investment reporting has the potential to evolve into the cornerstone of client relations in the not-too-distant future. Reporting has the potential to develop into much more than simply outdated broadcasting in a one-way direction when it is fully digitized and automated. It has the potential to reimagine the customer experience.

But in order to get there, businesses need a comprehensive solution for data management and reporting. This calls for a robust technological infrastructure that is capable of processing enormous amounts of data. A platform constructed on the concepts of open architecture connection that is capable of facilitating data consolidation as well as visualizing performance and risk through charts and tables that are highly customisable.

Find out how our Sesame technology, which helps with investment reporting and data aggregation, is helping asset and private wealth managers change their clients’ reporting experiences.

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