The Financial Business Model: 5 Keys to Long-Term Success

Why do so many businesses fail to make profits and achieve their financial goals? The answer is simple because many business owners simply ignore one or more of the 5 keys to financial success. Many businesses are making sales but are not profitable. Learn how to fortify your business model and set your company up for success. Developing a financial business model provides a clear picture of your company’s financial history as well as your company’s financial future. Working from a financial business model will help to prepare your company to make better decisions for the company in the future. And analyzing your finances on a regular basis will provide you with the financial success you are seeking to achieve. Get ready to gain more flexibility and financial freedom in your company with the keys to success.

Key #1) Don’t Go It Alone
Mismanagement of finances is not reserved for start-up companies but for all businesses. Many business owners are able to produce and sell their products and services but are not able to manage their finances. If you are not able to determine where you have been you will not know where you are going. Accountants and bookkeepers are able to assist your company with establishing a financial foundation and making predictions surrounding your financial future.

Key #2) Review Historical Data
By developing a financial history of your company’s finances provides you with valuable lessons for the present that will guide you into a more profitable future. Reviewing financial history helps you to know what to do and what not to do in your business. Compiling historical financial data can help your bookkeeper or accountant to assess the reasons for your success or failure.

Key #3) Project Sales and Costs
Once you have completed the second key it will set you on the trajectory to be able to project the sales and costs. Projecting sales and costs without historical data can be challenging but not impossible. Projections for your company are not a process that begins at the start-up phase, it is an on-going process to help determine areas of growth and change. Costs are always easier to project than sales. However, sales should not be your main focus but rather on the company being profitable!

Key #4) Develop Financial Statements
Financial statements are the framework for the accounting cycle. In other words, the income statement, the balance sheet, and the statement of cash flows provide a picture of how well your company is doing financially. Financial statements structure all financial data in a manner that is easy to understand and should be prepared with accuracy. These statements assist you with assessing financial performance and determining key business decisions.

Key #5) Assess and Implementation of Changes
This is the final piece in the financial business model. Once all of the first four keys have been established you will be able to assess your company’s financial position and implement changes where it is necessary to ensure financial growth and success. Tying it all together the financial statements will reflect your company’s historic information and decisions can be made about the future from that data.

The Future of Financial Services

The ease of making financial transactions and financial services in general, had first been revolutionised when telegraph companies introduced wire transfers. But with the coming of new age financial services like Bitcoin and Ripple, it is the time we address the question of what the future holds for the financial services of the world.

Traditional Wire Transfers

Let us begin by first taking a look at how things have been going on for these past 150 years since wire transfers were first introduced. Transferring funds using a wire transfer method via a bank is not a single step process but a multi-step process. It is like this:

    • The sender approaches his or her bank and orders the transfer of funds to an account. Unique codes like BIC and IBAN codes are provided to the bank by the sender so that the bank knows exactly where the funds need to be transferred.
    • The sender’s bank contacts the receiver’s bank by sending a message through a security system, such as Fedwire or SWIFT, signalling it that a transfer needs to be made. The receiver’s bank receives this message, which includes settlement instructions as well, and then asks the sender’s bank to transfer the amount specified in the message.
    • The sender’s bank now transfers the amount. This is not done in one go but bit by bit, so it can take anywhere from a few hours to a couple of days for the entire sum to be transferred.
  • To make the transfer, the two banks must have a reciprocal account with one another. If that is not the case, the transfer is made through a correspondent bank that holds such an account.

As one can see, this form of transfer relies overly on a mediator, takes more time than it should, and can prove to be costly as the banks charge some fee for their service. Distributed currencies like Bitcoin provide a viable alternative to this process.

5 Things to Consider While Selecting a Financial Planner

Unlike someone calling himself a CPA or a physician, just about anyone can call himself a “financial planner” or a “financial advisor” regardless of their educational background and professional experience. Moreover, not all of them are unbiased in their advice and not all of them always act in their clients’ best interests.

To ensure your financial planner is well-qualified in personal finances and impartial in his advice, consider the following five things:

1. Planning Credentials: Having a highly-regarded credential in financial planning, such as Certified Financial Planner (CFP) or Personal Financial Specialist (PFS), confirms that the professional you intend to work with has acquired the education and experience necessary to serve as a financial planner. CFP and PFS credentials are awarded to only those individuals who have met the certification requirements of education and experience in planning for personal finances. In addition, they have to pass the certification examinations and agree adhere to the practice standards and continuing education requirements.

2. Subject Matter Expertise: Financial planners are planning professionals, not necessarily subject matter experts. For example, a financial planner will be skilled in tax analysis and planning,but unlike a Certified Public Account (CPA) or an IRS Enrolled Agent (EA) he might not necessarily be a subject matter expert when it comes to tax rules Similarly,a he could be skilled in chalking out an investment plan, but unlike a Chartered Financial Analyst (CFA) he may not be an authority in the subject of investments. Work with a financial planner who is also a subject matter expert in those areas of personal finance that are important in achieving your financial goals.

3. Client Specialization: Not all financial planners serve all types of clients. Most specialize in serving only certain types of clients with specific profiles. For example, a personal planner may build his expertise and customize his services to serve only those individuals and families who are in certain professions, or a particular stage of life with specific financial goals and net worth. Ask whether the planner specializes in serving only certain types of clients with specific profiles to determine whether he is the right fit for your situation and financial goals.

4. Fee structure: The fee structure largely determines whose interests he serves best – his client’s or his own. A Fee-Only professional charges only fees for their advice whereas a Fee-Based professional not only charges fees but also earns commissions, referral fees and other financial incentives on the products and solutions they recommend for you. Consequently, the advice from a fee-only one is more likely to be unbiased and in your best interests than the advice from a fee-based financial planner. Work with a professional whose fee structure is conflict-free and aligned to benefit you.

5. Availability: He or she should be regularly available, attentive, and accessible to you. Ask the planner how many clients he currently serves and the maximum number of clients he is planning to serve in the future regularly. This clients-to-planner ratio is one of the key factors in assessing your planner’s availability to you in the future. Also, ask which planning activities are typically performed by the planner and which ones are delegated to a para planner or other junior staff members. Lastly, make sure the planner is easily accessible via phone and email during normal business hours.

Once you have shortlisted a few well-qualified and unbiased financial planners in your local area, consult the ones who offer a FREE initial consultation first. During the initial consultation, assess the planner’s availability and any other professional attributes you are seeking in your financial planner.

Having a well-qualified and unbiased financial planner by your side is extremely important in your journey towards your financial goals. When searching for one, consider the planner’s professional credentials, client specialization, subject matter expertise, fee structure, and availability to select the right financial planner for your needs.

5 Questions You Should Ask Your Financial Advisor

Managing your wealth, no matter how big or small, is a cumbersome task. Your financial advisor helps to keep your money safe while making it work for you. Before you start working with someone, ask them these important questions.

What Certifications Do You Have?

You need to know what licenses and certification your financial advisor has. Most of the top consultants are certified public accountants, fund specialists, consultants, or analysts. Some even carry a Juris doctorate and insurance licenses. While everyone has to start somewhere, you want to work with a firm that has extensive experience in the field.

What Safeguards Are in Place to Protect Assets from Fraud?

Your assets need to be protected by a reputable custodian. When you ask about safeguards, you should also ask about any infractions he or she has received in the past both with the firm and as an individual. To provide you with the best service, your financial advisor should be a fiduciary.

Consultants with a strict code of ethics have standards that they share with their clients. However, no matter their standards, they should be in compliance with Financial Industry Regulatory Authority, state and regulatory agencies, and the Security’s and Exchange Commission.

What Are Your Fees?

When it comes to fees, your counselor should be 100 percent transparent. He or she needs to explain his or her exact fee structure, so you understand how you are paying. Some are fee-only, meaning they provide a flat rate for services rendered.

Some investment consultants charge a commission fee. That means they make money off each product you purchase to help your investments grow. It is important to know which one you are working with, or if you are with someone who charges a fee in addition to earning commissions.

What Access Do You Have to Earning Reports?

As your financial advisor, he or she should have direct access to the top holdings of where your investments are. He or she needs to be able to tell you immediately what the earnings report is anytime you call.

At the very least, he or she should be able to educate you on your holdings before any investment of assets. By educating you on available options and what assets are invested, you can better understand what the consultant suggests.

How Often Do You Communicate

When it comes to letting you know how your money is doing, the counselor should be open to communication. He or she should send out weekly announcements about the market. Also, you must be informed of trade notifications immediately and receive an explanation on every buy and sell option. Most firms also send out information about their monthly investment outlook as well as a quarterly outlook. Brokers also offer to keep their customers informed with educational information and fact sheets.

Ask the tough questions of a financial advisor before asking him or her to manage your funds. It helps you to weed out the inexperienced and shady consultants before losing any money.

Three Ideas for Spring Cleaning Your Finances

Your taxes have just been filed and now it’s time for spring cleaning – clearing out the dirt and clutter in your homes and work space to allow for a chore-free summer. Why not also use this opportunity to “clean” up your finances? With a little annual clean-up and our three ideas, you can keep your current financial situation well-organized, streamlined and up-to-date.

Clear the document clutter

We are all human and sometimes accumulate piles of important documents and statements. Now is the time to look through your financial documents and consider which to keep and which to discard. Keep recurring documents, such as investment and bank statements, property and casualty insurance renewals or social security and retirement statements, for one year. You need only keep household bills and credit card statements until you have a record that the bill was paid (unless you need these statements as evidence for tax filing or proof of purchase). Shred all outdated and unnecessary statements.

Try organizing your saved documents into a folder with the newest date on top. This way, if you go looking for a specific document, you won’t shuffle through a year’s worth of back up. Maybe, you prefer storing everything digitally. If so, consider naming folders starting with the year, followed by the two-digit month and ending with the name of the institution or document. This keeps the files sorted in an easy, chronological order. Remember, all electronic files should be backed up regularly, whether stored locally or in the cloud. These days, there are plenty of that will sync your devices and securely back up your storage.

When you pare down and keep only what is necessary – for tax purposes and tracking financial records – you’ll have less clutter and a better understanding of what is in your possession.

Consolidate retirement accounts

How many retirement accounts have you accumulated? Throughout your career, you may have switched employers and acquired multiple retirement accounts. You’re not alone: Many people have aging 401(k)s, IRAs and other retirement accounts of convenience. Talk about financial clutter! Now is a great time to consolidate these. IRAs, SEP IRAs and SIMPLE IRAs can all be consolidated into a single IRA. (Roth IRAs can only combine with other Roth IRAs.) Old 401(k)s can also be rolled into your IRA. When distributing an old 401(k) into your IRA, be sure to review the investment options and expenses in the 401(k) as compared to what is available in your IRA. Combining multiple accounts, may save you fees and most certainly will save you paperwork. Most importantly, you and your advisor can more easily and strategically invest your retirement account for today and the future. When it comes time to take withdrawals, calculations and taxes will be much easier as well.

Update your critical information

Finally, as you begin to clear the financial clutter, you may have various accounts and people who have changed since the last time you organized. That’s why this is a great time to record all your critical information in one central location. We like to call this your critical records organizer. If you already have your information in one organizer, maybe your information is outdated or professionals have changed. Use this spring cleaning time to review the information and make updates. If you have never organized your important information, you should include all your current account numbers, access information and professional contacts. You might like to keep this information in hard copy or choose a mobile app (such as 1Password) or cloud-based document service (such as Dropbox). Creating a central location of this information is not only useful for you each year, it might become critical for your family. You might have account information and professionals in your life that you interact with, but the rest of your family may not know how to contact. Once you update and organize your critical information, remember to let the important people in your family know where they can find this information for the future.

Spring cleaning your finances doesn’t have to be an exhausting process. By keeping important account statements in one place, tossing recurring documents, and shredding unnecessary or outdated personal paperwork, you can clear the document clutter in your life. Consolidating multiple accounts that have lingered over time, will bring you fresh confidence and control over your nest egg, and updating your information in a central location keeps you protected for the future.

5 Benefits of Financial Technology

Financial technology (also referred to as FinTech) is the use of innovative technology to deliver a wide range of financial products and services. It is intended to facilitate the multi-channel, convenient and fast payment experience for the consumer. This type of technology is effective in many different business segments, such as mobile payments, investment management, money transfer, fund-raising and lending.

The rapid growth of financial technology has been very beneficial for consumers worldwide, such as the ability to serve customers that were not previously attended to, a reduction in costs, and an increase in competition.

Let’s take a look at a few of the benefits related to financial technology:

Better payment systems – this type of technology can make a business more accurate and efficient at issuing invoices and collecting payment. Also, the more professional service will help to improve customer relations which can increase the likelihood of them returning as a repeat buyer.

Rate of approval – many small business ventures are starting to use the alternative lenders like those involved in financial technology because it has the potential to increase accessibility and speed up the rate of approval for finance. In many situations the application process and time to receive the capital can be completed within a period of 24 hours.

Greater convenience – the companies involved in financial technology make full use of mobile connectivity. This can significantly increase the number of people who can access this type of service and also increase the efficiency and convenience of transactions. With consumers given the option to use smartphones and tablets to manage their finances, it is possible for a business to streamline its service and provide a better all-round customer experience.

Efficient advice – many of the latest systems rely on robo-advice to give people guidance on their finances. This can be a very quick and low-cost option to get useful information on investments, as well as to limit a person’s exposure to risk. However, this type of service won’t be able to give the most in-depth advice that would come from a professional adviser.

Advanced security – Using the latest security methods is necessary to ensure more people are confident in using this type of financial service. The need to harness the latest mobile technologies has resulted in a major investment in security to ensure customer data is kept safe. A few of the latest security options used by those in this sector include biometric data, tokenization and encryption.

Planning For Emergency Financial Situations

Emergency financial situations can happen to anybody and any financial arrangement exercise is not ideal without planning for such occasions. The whole idea of having an emergency fund is to offer a cushion against any unexpected expense.

This will ensure it does not have any negative impact on your financial condition and does not rip off the whole financial security.

There are many circumstances which can cause a financial emergency such as a sudden illness, accident, medical emergencies, emergency house repairs, loss of a job, emergency car repairs and much more.

The major reason for having an emergency fund is very clear because when a person falls into an emergency financial situation, they will have to break their savings or make a compromise to get the needed money.

It’s not rare to find people who just take out their credit card and swipe it for hard cash. Opposing popular opinions, credit cards are the worst way to fund any financial emergency. The fastest way to get thousands of dollars its to get a car title loan it is not a long-term solution but a short-term solution.

In a circumstance where you’ve taken a cash advance with your credit card to get the needed money, the credit card company will charge you a cash advance fee with an interest rate. This is a very costly way to borrow and manage finances for emergency situations.

Therefore, what is the best amount that should be set aside as emergency money? There are diverse opinions on it. Some professional’s experts agree that a minimum of 3-6 months’ worth of monthly income should be set aside for an emergency situation. This amount can differ according to marital status, the size of family and lifestyle.

Everyone must reserve some extra cash in case of emergencies. But, the amount to reserve depends on your income and monthly expenses. The amount that is needed for your emergency fund is open to debate, the minimum amount should be sufficient to cover your expenses for daily living for at least 3 months. It’s also ideal to save for 6 months even though some financial advisers agree on a full year worth of cash.

These funds must be kept aside in an instrument, which is easily available when needed. It could be money in a bank account, hard cash, liquid funds or fixed deposits. This will ensure the fund is always accessible instantly or within a short period when it’s needed.

Where to Keep the Cash

Your situations and what can offer you peace of mind are the factors that can help you determine how cautious you want to be. Keep your emergency fund somewhere that is safe and accessible because you may be required to get the cash in a hurry when an emergency arises. The best option you’ve is to open a money market account or savings account. But, always examine their offer with regards to the interest rate, minimum balance, and other terms.

E-Invoicing in 7 Steps

Step One: Know your ‘as-is’ process:

I knew all too well in my days of selling e-invoicing, that if a prospect didn’t know their ‘as-is’ process, they were a good 12 to 24 months from implementing e-invoicing. So don’t skip Step One.

If you don’t know your process, you probably don’t know key metrics like your First Time Match Rate. This means you won’t know the degree to which e-invoicing might help you (and you may have problems in your process which need other solutions, as well).

And, you probably don’t know the true cost of your invoicing process, and therefore will not be able to put together a water-tight business case.

By mapping out your ‘as is’ process you will come to understand:

  • Why invoices fail
  • How e-invoicing can remedy problems in your process flow
  • How many invoices would be ‘in scope’ should you proceed with e-invoicing
  • What your ‘as-is’ cost is, and how much it will go down by moving to electronic
  • How many days it’s currently taking to process an invoice, and how e-invoicing would reduce the time
  • How, by reducing the number of days, your capturing of negotiated discounts might be favorably effected

Step One is likely to take you 3 to 6 months, but by the end of it you’ll be clearer and more realistic when you make your business case.Importantly, knowing your cost-per-transaction is essential for negotiating effectively with the provider you end up signing.

Step Two: Know the vision of the company:

Process change makes sense to stakeholders when it is contextualized against the overarching ambitions of the company.

This means it’s worth taking the time to understand where the company wants to be in 6, 12 or 24 months’ time, and you can extrapolate that intention back to how e-invoicing might accelerate or bolster the realization of that goal. Take the time to lift yourself from the ‘day to day’ and understand where the company is headed. (Ask lots of questions, and really listen to the answers.) Then you can:

  1. Understand and communicate the wider purpose of e-invoicing and position e-invoicing as a key enabler for realizing goals
  2. Use the language of the senior management to present e-invoicing back to them
  3. Move e-invoicing up the priority list

This endeavor requires planning, and an investment of time outside your day job, but it will pay off down the road, when your CFO and CPO and CTO (Chief Treasury Officer) see e-invoicing as their single point of failure.Step Three: Get procurement on board early

This is easier for an organization where Finance and Procurement are already aligned, already share reporting lines and objectives, and operate as one team.

But in organizations where this ‘joined-upness’ doesn’t exist, it’s common for Finance to own the project, because they get the more immediate gains, and involve Procurement almost as an afterthought. This can kill the project on the spot.

This is largely because e-invoicing is a supplier-focused program, and even though Finance, or rather Accounts Payable, pays suppliers, they are actually owned by Procurement. This means suppliers will listen to Procurement regarding the e-invoicing project first, and finance second. So if procurement are not brought in, or are at all dismissive of e-invoicing, your suppliers will feel this mood, and drag their heels in signing up.

This is perhaps the key to getting e-invoicing right, and so easily overlooked as a small detail. It’s not. It will make – or catastrophically break – your project.

When working with Procurement, consider the following:

  • Drivers – why are we doing e-invoicing?
  • Scope – all suppliers, invoice types, AP transaction types, countries?
  • Solution scope – just e-invoicing or an end to end solution?
  • Message – mandatory or optional?
  • Quality of the database – will the comms ‘land on the right desk’?
  • Signatory – how senior will the signatories be? The CPO and the CFO? (Ideally, yes.)
  • Targets – are Finance and Procurement KPI’d on the same targets?
  • The non-compliant – who will respond to the suppliers that resist?
  • Who will own the project? Perhaps Finance and Procurement together?

Investing time in seeking out a partnership from Procurement early on is fundamental to a successful project.Step Four: Give the project a name

You will likely find that the nameless projects stay in project status for a long time, and rarely move to operational or ‘go live’. This is not a coincidence.

By giving your e-invoicing project both a pre- and post- contract name, you:

  1. Give it an identity which helps people ‘get it’
  2. Create interest and curiosity (‘what is this Globe project everyone’s talking about?’)
  3. Avoid confusion because you’re all talking about the same thing
  4. Heighten engagement and inspire greater emotional attachment, especially, I find, if you stay away from the obvious like Globe, Probe, e-Procurement Project – all decent names, but how about something more fun, like names of characters from movies or fiction? Or having a competition (with a really good prize) to come up with the most creative name?

Step Five: Know what you’re shopping forWhat do you want? Is it a best-of-breed e-invoicing solution? Is it e-invoicing with dynamic discounting? Is it e-invoicing with workflow and routing, or an e-procurement functionality for your upstream procurement process? Do you need it to be VAT compliant and language sensitive because you are rolling out across multiple countries? And do you need to use their onboarding capabilities? (This is always advisable.)

Knowing what you want, and then capturing these requirements in a document is key.

You will have:

  • Commercial and business requirements
  • Process requirements
  • Scope requirements (impacting the legal treatment and the languages supported)
  • IT requirements (but these are probably weighted lightly, as all e-invoicing solutions I know of are system agnostic)
  • Resource or/and timing requirements

Then make sure that the companies you invite to respond to the RFP all offer similar-ish services, so you are not comparing one solution type against another completely different solution type in order to make a decision.Step Six: Determine the cost of delayed-implementation

Quantifying the cost of doing nothing – ‘continuing as per’, and having this as a daily, weekly, monthly and annual figure, will help drive a deadline.

It’s advisable to build this figure with the main stakeholders, so they all agree on it, and understand that, allowing the project to slip by a month is actually costing the company X.

Having the daily figure will help drive the pace of the project.

Step Seven: Follow the best practices of the provider

The provider you end up selecting will have likely rolled out 20 – 100 e-invoicing programs (if it is one of the bigger providers like Tungsten, Ariba, Taulia or Tradeshift). This means you will be benefiting from their experience, which is now structured, and documented.

Some providers swear by their best-practices so much that they attach a guarantee to their invoice conversion.

Best practices will include advice like “clean your suppler data, or let us clean it”, “have procurement sign off on the communication”, “be available and ready to respond when some suppliers say they won’t comply with the request”.

7 Signs of a Decaying Financial Portfolio Management System

One of the biggest threats that most Portfolio Managers face is the prevalence of legacy systems.

Over the past three decades, investment advisors have been empowered by the advent of technology from simple spreadsheets to complex home-grown systems. From that time to the present, the industry has seen exponential growth and with it, enormous complexity. Challenges include round-the-clock trading in markets from New York to Sydney, varying accounting standards, shortened settlement cycles, and of course, increased regulation and security issues to name a few. As if that were not enough, technology seems to change every day leaving many legacy systems struggling to keep up with customer demands. Cheaper, faster, smarter, and more efficient norms are expected – they cannot be the exception. Failing systems can sharply undermine your company’s ability to service its customers and maintain its market share, much less grow the business.

In this age of big data, business intelligence, and data analytics, legacy systems can represent a massive risk to your business. If day-to-day operations require the ability to manage process, distribute, and accurately report financial data, being behind the curve is not an option. If this sounds familiar, it is time to ask, “How did we get here?” and more importantly “How do we get out?”

Here are the seven signs that will tell you if you have a decaying system and how it must ideally operate:

1. Facing difficulties while managing data due to disparate systems?

Maintaining data in different systems or manually moving move data from one system to another will lead to inconsistency and errors. Is your data quickly identifiable, consistent across multiple systems, complete, accurate, and reconciled among different systems? If your answer is a NO to these questions, you must reevaluate your platform. Your system must be able to eliminate manual data flow, update all the data with a single change, deliver timely and accurate reporting including intra-day, and make data easily traceable.

2. Are your client communications professional?

Investors expect your reporting to be clear, concise, and highly customized to their needs. This statement holds especially true for institutional investors. Organizations that can meet these expectations will have an immense competitive advantage over those that cannot. If your current system does not deliver the level of reporting your clients expect, you will run the risk of falling behind.

Your client expectations are not limited to the form and content of reporting, but also to how you deliver information. They expect instant access to real-time information, be it through a web portal or a mobile platform to stay relevant and highly competitive, your systems must be flexible enough to send and receive communications via any channel of your client’s choosing.

3. Struggling to cope with complex global investments?

Dealing with multiple regional and global investment regulations such as UCITS V and VI, Solvency II, AIFMD, and EMIR is a daunting task. All these regulations require you to maintain reliable, accurate, and transparent data. To comply with these regulations, you need Workflow Management, Data Management, and accurate reporting. Data, managing risk, and maintaining accuracy is critical to comply with regulatory reporting requirements.

With the increase in data sources and data complexities, your organizations need solution providers who can help you manage your data. Your system must not only be scalable but also provide actionable business intelligence in a format that is easily understood.

4. Finding it hard to achieve Integration of disparate systems?

Real integration is not a matter of simply connecting systems – your systems must be able to talk to each other seamlessly. Manually moving data from one system to another affects your efficiency, thereby, increasing the risk of errors. Integrating disparate systems not only reduces these risks but also improves efficiency by ensuring that back office and front office personnel can view transactions, cash positions, and holdings identically. This ensures that the entries are recorded accurately in your Investment Book of Records (IBOR).

Many organizations use multiple systems for accounting, reporting, reconciliation and managing client information. If different vendors have provided these systems, making them talk to each other could be a challenging process. If you have workarounds or portfolios that reside outside of your legacy system, it is time to rethink its usability. Your system must allow centralized and standardized portfolio management activity. In an end-to-end portfolio management solution that is built on open architecture, the work of multiple systems is consolidated into a single platform. Such a solution will allow easy access to third-party systems or any other system that is built in-house, thereby enabling you to reduce technology footprint while driving greater efficiency.

5. Escalating legal and compliance costs?

A 2013 survey of Chief Technology Officers suggests that one of the biggest operations and technology challenges that asset managers face is to comply with the current and future regulatory requirements. The complex regulations make outdated reporting systems more of a liability than an asset. The compliance costs of regulations such as AIFMD, UCITS V, and VI, or FATCA-are overtaking many budgets. Additionally, aggregating data from different systems for compliance reporting is a risky and resource-consuming process. To reduce these risks and costs simultaneously, your system must be prepared to deliver consolidated reporting, by leveraging automation, integration, and standardization of data from various sources. Your systems must also eliminate the manual compilation of data for reporting, thereby increasing efficiency and cutting associated compliance labor costs while ensuring integrity, consistency, and reducing your operating risk.

6. Being scrutinized by Investors’ due diligence?

After surviving the global economic crisis of 2008, institutional investors have become extremely wary of due diligence, leading to immense scrutiny of operations. The 2008 crisis exposed operational risks – the risk of failure that not only involved market forces but also the lack of infrastructure and controls. Investors have also become increasingly tech-savvy; they are asking the right questions and know what to find. To remain competitive in this vital market, your system must stand up to the intense investor scrutiny. You must show that you have the controls in place to manage the risks efficiently and that you are already adhering to well-organized processes. If Investors sense any gaps in your workflow and find that you are dependent on manual processes and workarounds, they will take their money elsewhere.

7. Legacy systems are not supported, serviced, or enhanced in the way you expect?

A product is only as good as its provider. Is you provider paying enough attention to you after the sale with 24/7 support? Does your provider have a track record of continuous product updates? Do they provide product training? Are they attentive to your suggestions or new ideas? Your provider must provide long-term support if you want your new system to last. Your product must be scalable, flexible, and must be built on open source technologies. In addition, your provider must not only help you set up but also ensure that your systems perform optimally without any disruptions. A relationship is a two-way street; as such, providers must be able to respond to your issues quickly, and also help your business adopt new functionality as and when it is needed.

Invest in your growth

A portfolio management system is the heart of your business. With a weak system, your business can be at serious risk, and you may not have the time to address it before it fails completely. Investing in technology will give you greater efficiency, reduced risks, and help you make informed decisions. Your provider, therefore, must have a proven track record of being committed to long-standing services, continuous improvement, and support you as you grow.