Seeking cultural synergies

The switch in the scope of wealth managers, to include those whose end-clients are institutional investors or fund of funds managers, demands a revised approach from service providers, according to Catherine Brady, managing director, Bisys Fund Services in Ireland. “More and more direct interaction between wealth managers and services providers inevitably means that we need to tailor our services to each and every one of them – all with varying demands,” she says. Ms Brady says that professional investors, to include more institutional type-investors, demand more customised information at the portfolio level as well as tailored customer statements. “It’s the same information that we would ordinarily provide to all our clients but sliced and diced in different formats and delivered through any variety of methods, depending on the institution in question,” she says. “This is in contrast with private banks, which tend to have a basic level of reporting that they are predominately happy with.” Indeed, to meet the demands of such professional investors, Bisys has developed what it calls a Premier Client Services model. This is being rolled out to professional investors, fund of fund managers, and pension fund investors. “It’s basically clients with low volume trading but large trade sizes [more than $5m (e3.7m)],” says Ms Brady. Tailored service The staff supporting such clients have product-specific training and have to complete an evaluation on the client and product in order to qualify for the position. They must also have a minimum of two years experience in investor servicing. According to Ms Brady, these associates will be in a position to turn around client enquiries in real time and provide a highly personal service. “They do all of the servicing for these clients end to end from trade receipt, to trade processing, trade confirmation, query resolution and monthly or quarterly statements,” she says. “We find that wealth managers increasingly want to outsource more and more functions, but that they also require a platinum-type service which we are happy to provide. In addition, we are finding huge variances between the level and quality of technical expertise that wealth managers have in-house,” Ms Brady explains. An example is the way in which different clients want to access fund and performance data. Most now require access to real-time data and for one client this entailed Bisys designing a bespoke website giving clients real-time pricing data in an easily accessible format. The data needed to include key fund data for each and every underlying fund in a fund of funds, for example. And the pages for each individual fund required performance, top 10 holdings, and mandate data for end-clients to see. “This means investors can access information in real time which makes them feel much more informed. So it is a value-added function now provided by that wealth manager to its clients,” says Ms Brady. “The skill as a service provider is being able to provide all the usual services and then being able to add value with extra services such as a customised website,” says Ms Brady. “Professional investors almost always want this sort of value-added service as a part of their basic package, rather than seeing it as an additional service,” she continues. Flexibility with portfolio reporting is another must. “Obviously, requirements vary depending on the organisation and delivery mechanisms from online access, file feeds, e-mail delivery but it’s taken as a given that clients want it. They may also require highly customised client statements,” she says. Every second counts Providing real-time data and enhanced portfolio reporting has become even more important now that Ucits III allows fund managers to be a bit more “adventurous” with regard to the instruments permitted within its structure. For the service provider this requires additional risk monitoring and enhanced valuation ability – often using an independent third party to ensure that no single portfolio is oversold to any single counterparty. Value at risk reporting (VaR) is also now commonplace. This is essentially a measure of the maximum loss associated with a predetermined statistical probability for a specified period of time. Ms Brady thinks that the more cultural synergies between it and the wealth manager then the better the relationship. “Flexibility is key and having an intelligent conversation with clients. Ultimately if they are able to make money as a result of having the right processes and support in place then we make money too and everyone is happy,” she says.

Brady: wealth managers require a platinum-type service