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Compliance & Technology: Your top priority
Affiliated Member of the Association of Greek Institutional Investors
Technology is increasingly criti‐ flow— what they do, how they cal in controlling risks through‐ organize data, what kinds of out the portfolio manager work‐ reports they produce, and how flow. There is no single they can help you enact and “compliance solution” for auto‐ enforce policies. mating the Compliance Officer’s Moreover, understanding that job. Rather, systems designed to the risk associated with each support different steps in the driver of compliance—for exam‐ investment process—portfolio ple, client directives on APX— management, trading, recon‐ have ramifications across the ciliation—should also have the entire workflow, it’s important benefit of improving compliance readiness and mitigating risk. The CO, then, needs to know the systems the firm is using across the investment process and whether they serve to mitigate risk. A first step in identify‐ ing key risk points in your operations is to Client Structure understand the risks associated that the systems can communi‐ with the three primary drivers of cate with one another. For ex‐ compliance: Client Relationship, ample, current client restrictions Internal Management Policies need to be communicated to and Regulation. portfolio management and port‐ For every question raised by the folio modeling systems (like drivers of compliance, technol‐ Moxy) in order to check invest‐ ogy has an answer, and some‐ ment decisions and trade orders times more than one. Highly against restrictions. Wherever advanced technology solutions any two systems connect is a like the ones that Finvent offers, potential failure point. Thus, the enable you to turn your policies better the integration among a and procedures into automated firm’s systems, the lower the processes, ensuring that policies overall risk. This is a driver that do not simply exist on paper but Finvent has followed throughout are automatically implemented all its course in providing inte‐ as part of your workflow. grated, STP solutions. Since risk runs throughout the Certainly, not every firm has the workflow, it is important to same breadth of technology. A know the systems that handle firm’s technology investment is the various aspects of the work‐ typically proportional to its size
in terms of number of advisors, number of accounts, Assets Un‐ der Management, and other measures. Small firms that make up the majority of the “Advisor” uni‐ verse, may just have a portfolio management system. On the other hand, their trades are fewer, their assets smaller, and their activity easier to track, so their risks are lower. The largest firms habitu‐ ally invest in technology —as the asset base and trading volumes de‐ mand a high level of automation. Hence they are more likely to have a full complement of technology covering every aspect of their operations. Mid‐sized firms might get by with a core platform consisting of a portfolio management and order management system, and increase back office automation gradually as their business grows. Among mutual fund managers, smaller firms may not have the bandwidth and the technology to ensure compliance with core regulatory directives. They will often outsource that responsibil‐ ity to their fund administrators or prime brokers (“Fund Admin” in chart). As firms grow and ac‐ quire technology, they are likely to move to a mix of partial out‐ sourcing and in house compli‐ ance management. Continue to next page
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Understanding that risk is proportional to trading volume and asset size, compliance is an important factor in determining a firm’s level of investment in technology. COs need to be familiar with their firms’ existing systems or pending needs, and functionality that supports compliance should be factored into technology deci‐ sions. Portfolio Management Portfolio management solutions should allow fast and easy access to data com‐ bined with robust reporting capabilities, enabling firms to respond quickly to regula‐ tory requests for information or proactively organize documentation for compliance reporting. The most advanced systems will also provide audit trails that enable firms to see when changes have been made to data and by whom. The system should provide user‐defined security levels that enable a firm to allow individuals access only to the data they need to do their jobs. Client Relationship Management Investment advisors do not need CRM fea‐ tures that are designed for large sales or‐ ganizations; the more important criterion is close integration with the portfolio man‐ agement platform. From a compliance per‐ spective, integration between CRM and
portfolio management means that both client service staff and portfolio managers are working with consistent client data and are able to share client directives. Trade & Order Management Order Management Systems (OMS) func‐ tionality has evolved to encompass virtually every step from portfolio construction to settlement. The most advanced systems have portfolio modeling capabilities that incorporate client restriction checking after trades are modeled, but before they are executed. The system should also have built‐in or easily integrated rule checks while trading in real time as well as moni‐ toring tools to check positions against in‐ ternal policies, client restrictions, and EU trading regulations. The OMS sits at a criti‐ cal compliance juncture, as it is exchanging data with external counterparties over whom the firm has no control. It should provide secure connectivity with brokers and custodians to support best execution efforts, fair allocations, and accurate settle‐ ment. It should also have commission‐ tracking capabilities so CCOs can see whether broker fees are in line with best execution commitments. Straight Through Processing STP tools enable firms to automate back office processes such as daily reconciliation
with custodial data feeds. The more back office automation a firm has, the less risk of error (or tampering) from manual interven‐ tion, and the more the firm’s operations staff can focus on resolving exceptions. Research Management Solution As more and more firms look to technology to solve the problem of storing and orga‐ nizing research, they should also be looking for functionality that supports due dili‐ gence and a formal decision‐ making proc‐ ess. The system should have the means to organize all the data around a particular investment idea and have easy search and retrieval capabilities. A state‐of‐the‐art RMS enables firms to better explain their decisions to clients and prove due diligence to regulators. Wrapping up, investment managers need to use automated, integrated and very powerful tools in order to control their processes and offer their senior manage‐ ment security on the results they produce. Finvent has worked with clients many years to understand their needs but also edu‐ cated them on how they can harness pow‐ erful solutions into user friendly, every day companions in their work. For more information on how to improve your daily business, please click here.
New Features in APX Release 3.0 Advent Portfolio Exchange (APX) Release 3.0 of‐ fers new features and enhance‐ ments to Ad‐ vent’s industry‐ leading portfolio management, contact management, and porting product and particularly in the fol‐ lowing key areas. Expanded Access to Data and Streamlined Workflow ♦ Access to much more data is available through redesigned pages for portfolios, contacts, activities, and more. ♦ Powerful new search features enable you to filter data in columns on a page ♦ Fully customizable pages enable you to choose the columns and data that dis‐ play, order columns the way you want, lock columns, keep new non‐scrolling headers in view ♦ Faster access to key functions streamline
your day‐to‐day workflow though one‐ click searches, new toolbar buttons, and more. ♦ A new Portfolio Group Manager enables you to automate the creation and main‐ tenance of portfolio groups based on searches and a broad range of portfolio criteria. ♦ Enhanced Fixed Income Reports enable you to show much more information and organize its display to fit your needs. Relationship Management and Tracking ♦ Outlook Email Capture. Capture and store all Outlook e‐mails related to your APX contacts and portfolios that are sent or received in Outlook. ♦ Two‐way Microsoft Exchange Synchroni‐ zations. ♦ Recurring Tasks. Microsoft SSRS Reporting and Open Views ♦ Integration with Microsoft SQL Server Reporting Services (SSRS). ♦ Permissioned Public Views.
♦ SQL‐based Access to Derived Data. ♦ Run SSRS Reports within APX. Easily run SSRS reports for APX, along with your other APX reports, after you add them to the standard APX reports page or menu. Enterprise Platform and Global Support ♦ Support for an increased number of con‐ current users. ♦ Server‐based Packager. ♦ Import/Export Enhancements. Import custom‐formatted contact data directly from a Microsoft SQL Server 2005 data‐ base, making your transfer of data from other applications fast and easy. ♦ Improved access to print‐merge tem‐ plates. ♦ Multiple Price Sets. Save multiple price sets and multiple types of exchange rates that you can use when you view portfolio values on APX pages or run reports. To view all new features in APX release 3.0, please click here.
Planning ‐ Budgeting ‐ Forecasting ‐ Reporting Planning ‐ Budgeting ‐ Forecasting is an enterprise wide function. Whether it involves Expense Planning, HR Planning or Capital Planning it needs to be con‐ crete, secure and effective in order to support the organization strategic tar‐ gets.
With Clarity 6 you can monitor your sales by product, area, store, etc, in real time and great detail. Management methodologies like Activ‐ ity Based Costing (ABC), Driver Based Planning, Six Sigma etc, can (and should) be part of the process while analysis and what‐if‐scenarios are in place to explore alternatives and secure targets.
For more information on Clarity Sys‐ tems products and services please click here.
Finvent sponsors Wealth Shareholders Management Forum 2010 Registry Subscribe to news@Finvent
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Finvent acted as the Wealth Manager Software sponsor of the Wealth Management Fo‐ rum – 2010, realized on Tues‐ day, May 18th, at the St. George Lycabettus Hotel and organized by Derivatives.gr, a widely known website in the Greek investment commu‐ nity. The forum provided a com‐ prehensive networking plat‐ form for businessmen, wealthy investors, profes‐ sional investors & advisors and delivered knowledge up‐ dates from leading industry professionals locally and abroad. Attendees had the opportu‐ nity to elaborate on invest‐
ment planning and the differ‐ ences between private bank‐ ing services offered by Greek banks and their foreign coun‐ terparts, while there was a great interest on managing effectively high net worth individuals' portfolios in the current risky environment. Family offices, their structure and governance were also an important point of interaction for participants and speakers. Finvent has always been sup‐ porting or organizing such financial forums, which aim to keep financial communities up to date with the latest market advancements.
The ideal solution for organizations seeking a reliable, web‐based fund distribution platform is now avail‐ able. An unlimited amount of funds and their associated order types are made available to client advisors, branches, agents and the end cli‐ ents. The order flow from initiation to back‐office and through to the funds’ administrators becomes highly automated – a process which otherwise is very labor intensive and error prone. In addition, fund switches, model orders, savings/ pension plans, currency dealing, and fund and cash transfers are elegantly handled. For detailed information regarding Finvent’s shareholder’s registry solution, please click here.
Your opinion counts Send us your comments and requests regarding our newsletter and / or our company and products at mktg@finvent.com The contents of this newsletter are for your general information and use only and are not intended to address any particular requirements. The contents do not constitute advice, recommendation, representation, endorsement or arrangement by Finvent nor intended to be relied upon by users in making (or refraining from making) any specific investment or other decisions. Appropriate independent advice should be obtained before making any such decision.