News & Views

Agility: The Cornerstone of Modern Investment Management

In today’s hyper competitive environment, continuing with business as usual is no longer an option and modern investment managers are taking action to thrive in an unpredictable and interconnected world. While their competitors continue to discuss the ‘new normal’, agile leaders are investing in technologies that strategically align their organizations with the right objectives despite market volatility, performance pressure, and demanding stakeholders.

Investment managers can differ greatly in how they address these complex challenges but changing market dynamics should not impact their ability to react and respond. Once the realization that a modernization strategy is needed, agile firms act by investing in a client-centric strategy that focuses on operational efficiencies, seamless collaboration, data transparency, and increased client success. These agile investment managers foster a culture of continuous innovation by embracing agility as an organizational goal to drive future growth. Conversely, firms that are slow to adapt can easily find themselves left behind due to limited capacity, lack of data visibility, or fragmented systems and workflows.

Staying ahead of the (yield) curve

But why are some slow to adapt? While some agile managers are deploying new technologies that streamline processes, many have not rolled them out extensively because there hasn’t been a market catalyst to do so earlier. Today, many expect an increase in M&A activity as firms consolidate to cut costs or adjust business practices. IMTC’s COO Russell Feldman remarked during Cutter Wealth’s virtual meeting on ‘A New Normal: Executive Panel Discussion’ that “People are naturally averse to change and typically need a reason to switch vendors or technology providers. Vendors that are adaptable, providing additive services or consolidating tech stacks, will be one of the first places people look when considering a change.”

Some firms are not equipped to identify, assess, and respond to rapidly changing market demands. However, just implementing the right investment management system (IMS) can be a catalyst for modernization by proactively tackling strategic initiatives. For example, large SMA managers with thousands of accounts are able to implement the customization their clients demand at scale with a purpose-built IMS.

Agile firms make stronger investment decisions

Simply put, to be agile is to be modern and agile investment managers are able to make quicker and better decisions. Pursuing any strategy, initiative, or investment that removes the core barriers to performance while keeping pace with rapidly changing client demands, market conditions, and new technologies is modern. To stay ahead of the curve in today’s market, an effective IMS should unify people, process, and technology with:

  • Support for remote working by encouraging collaboration across the firm from front-to-back office utilizing the same data and systems so innovative thinking is encouraged and balanced against risk mitigation.

  • Reduced manual processes and system fragmentation through fit for purpose automation that drives operational efficiencies and enables firm growth through action.

  • Integrations and APIs to take advantage of new opportunities through predictive analytics that enables quicker decision-making, supports changing client behaviors and expectations, and increases transparency with greater reporting capabilities and digital communications.

Modernizing investment management firm performance

For investment managers, performance is everything. Having a seamless investment management workflow ensures overall efficiency by increasing a portfolio manager’s capacity to manage more through the automation of monitoring, data analysis, and reporting across multiple portfolios. Furthermore, when aligned with key objectives, a modern and agile strategy aligns the entire organization on trade opportunities, drives operational efficiencies, and delivers results.

While crises can be difficult and some firms struggle to adapt, there is also enormous innovation that comes out of volatility that spur modern investment management firms looking to make that change. In the end, those who modernize will increase revenue, gain top talent, and bolster their reputation with clients. By tackling strategic initiatives with agility, investment managers are better able to collaborate, improve client service and, ultimately, increase growth.

Want to find out more about how cloud-based investment management systems can help you improve fixed income returns? Learn more about NOVA.