The client has become an incredibly savvy partner in performance measurement. Their appetite for new and complex investment strategies continues to grow but increased client interest in analyzing returns can present reporting challenges to asset managers. With little regulatory guidance on what needs to be reported to end-investors, many asset managers turn to GIPS standards. These provide a great benchmark for consistency and transparency but without the proper performance reporting tools in place, GIPS can be difficult to achieve. Composite management and report delivery are two GIPS challenges that can be easily resolved with a powerful performance reporting solution.

Manually tracking portfolio participation within composites is burdensome, especially with a large number of portfolios with various mandates and inclusion criteria that change over time. However, consistency across composites is critical in achieving GIPS compliance and satisfying client mandates. Rather than rely on internal processes to create and maintain composites, asset managers should look for a tool that provides the following functionality:

  • Automatic management of composite membership by adding and removing portfolios based on user defined criteria
  • Support for multiple methodologies for calculating composite returns
  • Calculation of various dispersion and composite-level risk measures
  • Employment of carve-outs
  • Ability to generate multiple user-defined return types including gross, net of taxes/fees, and price-only returns.
  • Calculation of composite net of fee returns based on a fee schedule
  • Support for extensive disclosure capabilities
  • Automation of disclosures
  • Maintenance of a full audit trail with annotations
  • Ability to generate client-ready composite booklets

With appropriate composite management, asset managers are able to benchmark performance against client mandates, but the next step in the process is generation of client-ready reports. Reporting is one of the few value-add touch points that asset managers have, and can give firms the competitive edge with the right delivery. SS&C’s reporting solutions automate the production of customized reports in any format to streamline and conserve back-office resources. We also give you the ability to brand and format sleek presentations, spreadsheets, or web-based electronic reports or enable clients to build their own reports online. This offers enhanced transparency for the end-investor –a  key competitive differentiator for investment managers.


It_infrastructureThe increasingly global environment of the asset management industry challenges firms to support transaction data across time zones and markets with varying regulatory constraints. Regulators want assurance that failures won’t occur, which requires comprehensive risk analysis. The increased demand for transparency has precipitated a wave of new regulations globally. The Dodd-Frank Act and the European Market Infrastructure Regulation (EMIR) have both mandated new data management protocols, among them calculating and tracking variation margins at the leg level of swaps and using unique trade identifiers to reconcile counterparty information. These regulations have led to an explosion of reference data that needs to be gathered, consolidated, and reported.

In Ernst & Young’s most recent global survey on asset management investment operations, “Managing Complexity and Change in a New Landscape,” 75 percent of respondents cited the quality and accuracy of data as a critical priority for IT and operations teams. Aggregating and normalizing data from multiple sources is necessary to ensure that reports capture a full and accurate picture. However, most firms are struggling to keep pace with their data management capabilities. Relying on additional systems to capture data or using data warehouses for processing is common but can be error-prone and costly.

One way to keep pace with regulatory changes and increasing data from multiple sources is to utilize a holistic performance reporting solution that is data agnostic. This platform should be able to work seamlessly with other systems and data sources in order to serve as a single source of information for calculations, analysis, and reporting.

With SS&C’s data management tools, an asset manager can rely on a single source of data and better ensure regulatory compliance. Operations teams can utilize our monitoring technology to flag regulatory breaches and automate reporting to meet frequency requirements. In addition, our solutions are flexible enough to adapt to changing regulatory requirements depending on the investor, asset class, and region. Using multiple in-house systems or manual processes requires coordination, regulatory expertise, and resources that many middle-to-back office teams do not have available.

Consider how SS&C can help you deliver accurate intra-day data and a streamlined and controllable reporting process, mitigating risk, and making regulatory compliance sustainable and efficient. Please contact us for more information or a demonstration or email us at solution@sscinc.com.

global growth

2015 started with considerable market uncertainty caused in part by falling oil prices, instability in the euro zone and reduced growth forecasts for key economies such as China. Jittery investors are taking a far greater interest in their investments, and regulatory pressure continues to pile on buy-side firms. Here are three operational tips that we believe will help the buy-side respond to external demand for transparency and build on successful gains achieved in 2014.

  1. Make data a strategic tool.  Employ strategies that protect the integrity and harness the value of investment data. In many financial organizations, data is scattered in fragmented systems.  As a result, bringing the data together to acquire a complete understanding of a client’s portfolio is a giant production.  A robust approach to unifying disparate streams of data will enable faster, better decisions which produce better outcomes.
  2. Put performance measurement and attribution in context. External investors and regulators want to extract insight. Internal investment managers need to understand which strategies are working – and – more importantly why they are working to secure future returns.    Leveraging performance analytics can turn data into knowledge so that investment managers can understand and communicate sources of risk and return.
  3. Prepare to make data available anytime, anywhere and on any device. Investors expect to be able to see and understand the real-time details of their holdings anytime they want.  To meet this demand, investment management firms need to ensure data integrity and to prepare the data for transport to online portals and mobile devices.  This allows stakeholders to view complex real-time data, provided with the necessary context, whenever they wish.

This year buy-side firms will not only need strong investment strategies that hedge against market uncertainty and exploit opportunity, but also the operational infrastructure to respond instantly to market forces and meet investor demand for transparency.  For those who align their operations around preserving and harnessing the value of their data, 2015 could be a watershed year.

By Julian Webb

growth 1In a recent SS&C whitepaper, “Now is the Time to Invest in Technology that Enables Growth and Performance,” we provided guidance on how to prepare for growth and globalization, which are fundamental drivers of change that operations must accommodate. But beyond these most basic market shifts, there are two disruptive trends that asset managers must focus on to optimize operations.

First, the explosion of data and the digitalization of information are affecting how asset managers operate. In Ernst & Young’s most recent global survey on asset management investment operations, “Managing Complexity and Change in a New Landscape,” 75 percent of respondents cited the quality and accuracy of data as a critical priority for IT and operations teams. However, there is no industry best practice; in the same E&Y survey, half of the survey respondents adopted common standards across the firm, while 43 percent employed a hybrid model with enterprise-level and local standards. For most asset managers, the primary challenge is establishing consistent, enterprise-wide practices for managing and sharing data as a baseline for their operational model.

Second, as the regulatory environment becomes both harsher and more fluid, asset managers are struggling to provide visibility and transparency to their investment professionals, investors and regulators. This problem becomes more severe as firms are challenged with managing exponentially expanding data. In Ernst & Young’s aforementioned survey, they suggest that asset managers adopt a strategic approach to regulatory compliance. This recommendation goes well beyond establishing holistic compliance programs. They recommend that asset managers “incorporate changes to organizational structure, functional alignment, processes, systems and data” when optimizing operations. According to E&Y, “data management is particularly crucial. This includes all of the related aspects of data management such as quality, timely delivery, analytics and reporting.”

The explosion of data and the tightening regulatory environment makes reporting a critically important function for turning data into knowledge and communicating information accordingly. These trends in reporting and transparency are causing COOs and managers of leading organizations to reassess their operating models, particularly for firms operating on a global scale.

Utilizing a reliable and proven solutions provider such as SS&C allows asset managers to optimize operations and align their business to this rapidly changing playing field. SS&C provides asset managers with technology and services that can grow and adapt with their businesses, which is why firms ranging from small, domestic asset managers to the world’s largest financial institutions rely on SS&C to enhance their data management and reporting operations.

For more information, please request more information or a demonstration or email us at solution@sscinc.com.



SS&C is opening a new consolidated office to meet our goal of providing world-class software and services in one collaborative Boston location. Please join SS&C management, team members, and friends over casual drinks and hors d’oeuvres in our new office space.


Date: Thursday, November 13

Time: 4 – 7 pm

Location: 50 Milk Street, Suite 700, Boston, MA 02109



For more information, please contact Divya Vig at 1-617-648-0956 or email dvig@sscinc.com.



Our global and diverse client base increasingly needs to localize accounting operations to meet country-specific requirements and regulations including GAAP and IFRS accounting standards.  This week we were happy to announce that the latest release of PORTIA has improved the flexibility of its calculation and posting rules, enabling asset managers to support an unlimited number of accounting bases to meet these unique operational requirements.

PORTIA provides greater flexibility and configurability to help customers account for costs, track fees, define posting rules and address other unique accounting requirements.  Enhanced reporting tools provide transparency into regional accounting practices and address regulatory requirements.

“SS&C PORTIA provides substantial new functionality to assist asset managers implement multiple accounting bases and support accounting requirements that vary by country or region,” said Christy Bremner, Senior Vice President and General Manager, SS&C. “Customers are upgrading to take advantage of the functional benefits to improve the efficiency and quality of their accounting operations.”

We are pleased to announce the release of Explorer, a powerful data visualization and analysis tool that turns critical investment data into meaningful information.

Part of the SS&C PORTIA platform, Explorer enables asset managers to easily interact with portfolios, securities, holdings, transaction details and performance data. Users can integrate and visualize data from their investment accounting system, through grid and pivot views, providing data access to operations teams, investment professionals and other key stakeholders.

“In an increasingly regulated and competitive environment, we know that investment managers need unprecedented visibility into their data. Each firm has specific reporting requirements and with Explorer, we enable firms to visualize and compare investment information,” says Christy Bremner, Senior Vice President and General Manager, SS&C. “Explorer’s simple and intuitive design empowers users to look at their data in a flexible, configurable and customizable format that is easy to pivot and manipulate.”

Instead of running multiple reports to view different data configurations users can quickly compare streams of information in one dataset, pulling data from multiple sources to view side-by-side. These efficiencies enable asset management organizations to gain a holistic view of their business, focusing more on strategy and less on operations.141030 - Explorer view

Intl MoneyYou probably know why your firm should be GIPS compliant (check out our whitepaper “Six Things You Need To Know About Composite Management and GIPS” on the topic) but even if you are on board, there is a good chance that you are violating GIPS standards unknowingly. We recently attended the GIPS Standard annual conference where verifier Karyn D. Vincent of ACA Performance Services, LLC gave a presentation on common errors she sees when assessing GIPS compliance. For those of you who don’t have the time to watch her full presentation, we distilled three key areas where your compliance may be falling through the cracks.

1. Vague Definitions and Policies

Often firms understand what GIPS policies must be met and adhere to them, but do not document procedures for maintaining compliance. It is vital for investment managers to specify not only what policies they have in place, but each step necessary to achieve it.

Another area that firms struggle with is clearly defining their mandate in their clients’ investment management agreement. This is especially important if your firm manages multiple, similar composites. Often firms will list a non-specific investment policy statement as their investment guidelines but if the agreement doesn’t define mandate, it’s hard to prove you have selected the right composites.

Once you have a clear documentation of mandate and place an account in a certain composite, it should stay there. Having a complicated inclusion and exclusion policy can confuse a tactical move with a change in mandate. Unless your client directs you to substantially change the strategy of their portfolio or this is a composite redefinition, changes to their account should not affect composite inclusion.

2. Lack of Communication

Your firm must make every effort to deliver a GIPS-compliant presentation to all clients and prospects. Many firms are diligent in drafting compliant reports but then do not distribute them appropriately. These presentations should go out on a yearly basis to all clients of a current strategy, clients who are interested in a new strategy, consultants, and prospects. It is up to you to define what constitutes a prospective client, but you must define and document it. It’s also key to track this information as you are likely to be questioned on your distribution by regulators.

Likewise, you should have documented policies and procedures on what constitutes a material error in a presentation and how to communicate that error to clients.

3. Inconsistent Return Calculations

To present accurate returns, you must calculate net of trading expenses for the period. One area where this is a problem is in deducting commissions. You may think that account commissions are being automatically deducted, but sometimes this isn’t the case. Returns on dual contract accounts and new custodian/brokerage accounts often are not paying typical commissions and therefore being calculated incorrectly. Check with your traders to ensure you are aware of these exceptions.

Withholding taxes can also be a point of confusion in calculating returns. Taxes are either reclaimable or non-reclaimable and while your return calculations are probably net of non-reclaimable taxes, you need to consider whether to deduct reclaimable taxes. If you are unsure of whether these taxes can actually be reclaimed, you should not accrue for them.

Lastly, ensure that if you are using model fees to calculate returns, these fees do not generate higher returns than if you had used actual fees. That means you should use the highest management fee incurred by portfolios in the composite or highest fee applicable to each specific client or prospect and test to prove that returns are not overstated.


silhouettes-86239_640As the outsourcing industry matures, more asset managers than ever are seeking to outsource to provide strategic advantages. According to a recent “Middle and Back Office Outsourcing” study published by BNP Paribas, “outsourcing of middle and back office functions is an extremely common practice, with the vast majority of respondents (86%) indicating that they outsource these in part.”   So how are firms outsourcing strategically?

Most commonly, asset managers are outsourcing middle-to-back office functions to focus resources on their core expertise. A well-designed outsourcing partnership can automate and monitor middle-to-back office responsibilities, freeing up resources for priority items while improving efficiency and reliability.  The role of the operations staff can then evolve, letting go of non-core activities to adopt a more focused approach of supporting the firm’s core task of managing money.  Of the fifty financial services firms surveyed by BNP, the “vast majority (78%) indicate they see outsourcing as a long-term strategy designed to help the outsourcer focus on their area of expertise.”

Another strategic driver for outsourcing is to provide protection against market and regulatory changes. Outsourcing redistributes the risks and costs associated with middle-to-back office functions to vendors, which is especially important in today’s constantly evolving market conditions.  Not only is an outsourcer responsible for the service being outsourced, but also for staying abreast of requirements that would impact services.  Implementing an outsourcing relationship that assigns this responsibility to experts protects your firm against costly oversights and gives your investors assurance that you are meeting industry requirements.  According to BNP’s survey, distributing risk is the second-most common reasons for firms to establish outsourcing relationships.

Working with outsourcing vendors typically provides a third, important benefit – delivering services at a lower cost. Outsourcing providers have the economies of scale and expertise to provide quality services with fewer resources, and outsourcing providers who leverage their own technology have even more flexibility to customize solutions to meet each firm’s unique operational requirements.

With the availability of outsourcing to optimize your processes, it is time to consider whether your operational strategy needs updating. Is your firm wasting too many resources on inefficient non-core functions?  Download SS&C’s recent paper, “Beyond Hosting,” to evaluate how outsourcing can provide your firm with an opportunity to create a more effective operational model.


During the global financial crisis of 2008, many asset managers turned to cost-cutting measures in the face of deteriorating revenues.  In particular, IT and operations budgets were cut extensively, as at the time they were not viewed as critical to revenue generation as the front office.  This point of view has changed since the market crash.  Investors and regulators realized that pressure to achieve high returns encouraged risky investments, creating an environment that was unstable and ultimately impossible to sustain.

Thankfully, the market is poised for a strong recovery.  According to PwC’s recent report “Asset Management 2020: A Brave New World,” global assets under management (AUM) are expected to grow significantly in coming years, surpassing $100 trillion by 2020.  Investors are willing to be creative to capitalize on the growth, resulting in the emergence of numerous innovative asset classes.  However, they also demand change from asset managers; regulators and investors require increased transparency and security for their investments to avoid the risks of the recent past.

In a recent paper, “Making the Middle Office Top of Mind,” PwC states that previous simplistic cost-cutting measures in middle-to-back office functions resulted in “an infrastructure that is inflexible and unable to scale for increasing product complexity and regulatory requirements.” In the past, top-down cost cutting demands did provide short-term benefits, but asset managers must now deal with the consequences of sustaining these tight budgets while supporting performance.  An underdeveloped middle-to-back office threatens efficiency and profits, and portfolio managers are challenged in keeping pace with industry changes.

Unfortunately, even as asset managers accept the need to change how they operate, they often do not have the resources required to catch up.  In addition to budget limitations for the middle-to-back office, PwC notes that talent constraints have forced asset managers to concentrate resources on tactical operations.   Operations teams are often run as lean as possible, and the resources required to develop and support a meaningful expansion strategy are not available.

How is an asset management firm supposed to adapt under these circumstances?  The solution: outsourcing.

PwC recommends “right-sourcing,” the process of evaluating options to determine the most efficient and effective method for providing these functions, and often that solution will be out-of-house.  Creating a strong infrastructure in the middle- and back-office will build investor confidence and ensure compliance while supporting flexibility for expansion into new asset classes and regulatory environments.  Legacy systems cannot accommodate the necessary improvements to remain competitive, and asset managers who do not adapt will miss the opportunity to optimize operations and increase efficiency.  However, PwC concludes that, “those who take steps now to right-source their middle office stand to create a powerful infrastructure that results in a competitive advantage – which, in turn, boosts the bottom line.”