We recently surveyed over 30 institutional investors to establish a benchmark for the quality and consistency of the reports they receive. Are they satisfied with the standard of reporting? What would lead them to divest? We asked these questions and more and the results and insights are captured in our latest paper: ‘What institutional investors want’.
One of the key findings supports the notion that investment managers still have significant reporting improvements to make. The results show that quite a few investment managers are still using manual methods to produce reports, while institutional investors expect more forward-thinking strategies.
Overwhelmingly, 42% of institutional investors said that they would divest based on poor reporting quality alone. Staying ahead of the times has now become a critical need.
42%
of investors may divest from their investment manager due to poor reporting quality*
No reason for complacency
How well do you know your clients’ reporting requirements? Clients are looking for consistency and reliability when it comes to their reports. Yet, somewhat surprisingly, this is not always the reality. 65% rate their reports received as “average” or “below par”, leading to 42% also stating that they will divest based on poor quality reporting. Client reporting is an unsolved problem for many asset management firms – with institutional investors demanding more frequent reports and even requesting more real-time data.
Collaboration, dialogue and customisation are key
Asset managers are challenged to change their “set and forget” attitude when it comes to reporting. Instead the focus needs to be on evolving and adapting to their client’s reporting requirements. 82% of firms stated that they will only invest with managers who adhere to their requirements.
Direct and complete transparency with clients is critical and asset owners expect direct access to their managers with regular access to market insights and thought leadership. Addressing the gaps in client experience by providing improvement on quality and frequency of market insights becomes a point of differentiation.
We are all technology-focused now
Observing the future of client reporting, asset owners are looking to access real-time data in a portal and exploring data warehouses like Snowflake and Databricks. Are managers keeping up with these requirements and actively exploring technology-led innovation? We asked how asset owners are receiving their reports and ensuring security levels are upheld. Email remains the backbone of communication with 79% of respondents still receiving reports via this channel, but there is an overlap with many firms using multiple channels, incorporating portals and API/cloud data. With multiple channels in play, the challenge lies in ensuring frictionless access for all solutions while maintaining robust security.
This report highlights a significant risk: 42% of investors may divest from their managers due to poor reporting quality. Lee Godfrey, CEO at Kurtosys, emphasised that “Investment managers need to adopt future-led technology that enhances their service offering throughout the entire investor lifecycle.”
Our benchmark survey report reveals that only 8% of investment managers are currently automating their reports. Managers need to quickly pivot to stay ahead.
Download the full report to see all results.
