But planning for growth can be daunting. As I worked with our clients and the Archer team to plan our company’s growth, I was stunned to see a ‘real-life’ graphic of all the moving parts and the choices we had to make.
The investment management teams I’ve met are driving growth, too. They are looking to create revenue growth by leveraging their firm’s expertise while still delivering great performance in global markets. New products, new channels, new marketing strategies are being considered. As with any growth initiative, the real challenge is in the detail, where cost containment, compliance, and operational efficiency will make or break the growth profitability model.
Electronic connections to counterparties, including executing brokers and custodians, are not enabled – or not dynamic.
The picture that emerges is a multiplicity of systems connected and supported by a network of people. Expensive. And difficult. Think of the SEC walking into your office and asking for transactions for multiple accounts, across distribution channels, in a specific format. Now imagine having to fulfill that request from multiple IBOR systems!
The concept of having multiple accounting platforms is not foreign to most in the business – particularly multi-channel investment firms. Many investment management firms started in the institutional/mutual fund space and had an accounting platform that worked to service that business line. Firms then expanded that infrastructure to feed other technology tools such as OMS, CRM and other 3rd party applications.
Then enter the managed accounts business, which brings the same general structure of institutional accounts, but dramatically increased volume. The institutional infrastructure may not have been set up to successfully manage a high volume business channel – hence the multiple accounting engines. And, most likely, channel-specific operations support.
Sound familiar? Looking through the lens of successful growth initiatives for which profitability is driven by cost containment, compliance, and operational efficiency, successfully growing investment firms have taken a hard look at non-core activities associated with IBOR support. Ideally, a single accounting engine with an IBOR platform to support all business lines, and a functionally streamlined operations infrastructure are implemented. The implementation plan is considerate of business interruption impacts, cultural fit and a client-centric view of the investment manager’s roles and responsibilities. In short, profitable growth requires a detailed definition of ‘What’s non-core?’ and a willingness to apply technology and operations solutions to enable investment management efficiency and effectiveness. And growth.
Credit and risk analytics • Portfolio construction and analytics • Trade generation, order management, routing, execution, and allocation • Pre- and post-trade compliance • Data management • Confirmation and settlement processing • Performance measurement and attribution.
Seven key infrastructure pieces. The consultant’s solution?
Implement a hosted portfolio management solution or a best-of-breed vendor solution centered on a trade order management system (OMS)… understand the basic strengths, weaknesses, and trade-offs of each one… identify functionality gaps in greater detail…[conduct an] “all-in cost analysis” including implementation and integration costs, support costs, and potential costs of additional best-of-breed solutions and data.
In other words, they recommended a single-platform, multi-channel, multi-currency tool, with efficient operations support for select aspects of the business. They recommended Archer.
I’ve worked with many investment management firms in positioning for growth. No consulting fees, just a viable solution that happens to be offered by a firm that’s successfully growing…along with its clients.
Bryan Dori, Archer President and CEO, joined the company in 2007. Bryan has spent his career within the Financial Services Industry building businesses like Archer from startup to industry leaders. With his extensive background, Bryan has transformed the business direction and focus of Archer through an unprecedented growth initiative and a successful rebranding initiative.