Asset Managers Need a Single Point of Access Into a Network of Managed-Account Sponsors


Want to make life easier for asset managers? A single point of access into a network of managed-account sponsors allows asset managers to move effortlessly across multiple sponsor platforms. This approach to traditional, separately managed accounts and model portfolio distribution will help them easily implement, manage and monitor investment strategy and decisions.

Without this modernization, asset managers may continue to cope with the challenge of having several open accounts on their screens, each requiring separate login and password information and each in danger of timing out while asset managers work. Imagine how frustrating the same scenario would be when reconciling all of your personal accounts – checking, savings, credit union, multiple credit cards – with several screens open on your laptop and all with separate logins.

A single point of access to a network of sponsors, with the added capability of moving among sponsors, has the ability to empower the wealth management industry and drive growth.

Asset managers, whose model portfolio or strategy is distributed to multiple wrap sponsors, must currently implement investment strategy changes made on their home platform across a multitude of sponsor platforms. Moving among screens with different navigations, logins and behaviors is just the first hurdle to overcome. When one sponsor is filled, managing rotating trades across sponsors and routing trades through to the next one can also be an issue. Or, if rotation is not needed, asset managers typically must use manual processes on each platform to get trades completed across all sponsor platforms. The headaches mount when you consider disparate file layouts and the need to download, potentially translate and upload trades.

Model portfolio and strategy providers face similar challenges, such as rotating model changes across sponsors, knowing when to send to the next sponsor, or getting model changes across all sponsors without updating a variety of model portal applications. All of this is compounded by the risk associated with switching between screens and making manual updates. Multiple processes add to the pressure of achieving the best execution as model providers ask, "Am I really getting to the market as quickly as I can for each sponsor?"

Challenges remain even after all trades or model changes have been entered. For example, managers cannot move efficiently across various sponsor platforms to gauge any level of trading exposure. After the trade uploads are in, asset managers face additional challenges to get the execution data out, whether they need to post that data to internal systems for allocating or feed an application to facilitate execution analysis. For those running best execution analysis within their home systems, getting execution data from multiple platforms with disparate file layouts is an additional challenge that involves downloading, potentially translating and then uploading.

A single point of access to a network of sponsors, with the added capability of moving among sponsors, has the ability to empower the wealth management industry and drive growth. We are starting to see industry players come together to create the network of the future. This model will bring data, sponsors, managers, custodians and third parties together, enabling a model that moves from a manager to multiple sponsor programs, and provides comprehensive, real-time information to help advisors better manage investors' assets. This network will ultimately connect the industry and its participants together in a very efficient and powerful way. The future is right around the corner.

Interested in learning more? Read The Case for Connectivity: Creating an Exchange Across the Managed Accounts Industry.

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