Advent Study Shows Client Reporting and Compliance Software Lead Rise in Industry Information Technology (IT) Spending

Advent Study Shows Client Reporting and Compliance Software Lead Rise in Industry Information Technology (IT) Spending

Annual Study Also Provides Key Industry-wide Compensation Benchmark for Key Investment Management Positions

SAN FRANCISCO – March 10, 2008 – Advent Software, Inc. (NASDAQ: ADVS), an award-winning provider of software and services to the investment management industry, today released the results of a 2007 Asset Management Operations and Compensation Study, which reveals key trends in technology and operations spending and employee compensation.  While the study revealed almost universal increases in 2007 spending, small to mid-size firms generally saw the highest increases in costs.

The Advent Asset Management Operations and Compensation Study is conducted annually by Advent in collaboration with the independent Advent Users Group (AUG).  The results are based on a survey of 100 investment firms that range in size from $100 million to nearly $25 billion in assets under management, with an average employee headcount of 34 and average managed assets per employee of $75 million. 

The findings indicate that a significant number of firms participating in the study plan to continue making substantial investments in IT and operations (including personnel, hardware, software, systems and outsourcing) to help drive efficiency, meet their clients’ increasing expectations and comply with increasingly stringent regulatory demands.  The survey respondents expected total IT and operations spending in 2007 to rise 13% on average. 

IT Investments
More than a third of surveyed firms are making significant investments in their technology infrastructure by installing new systems and applications; and more than two-thirds of firms surveyed expect investment operations spending to increase in 2008.  The most popular anticipated IT investments include those for customer relationship management (CRM), portfolio accounting, and disaster recovery and business continuity. 

The continued increase in alternative investment products is another key factor behind rising technology spending.  Of the largest firms surveyed that do not currently manage these instruments, half said they plan to introduce such products over the coming year. 

The survey is conducted each year to serve as a benchmark to help guide investment managers in their strategic and tactical management decisions in the face of heightened competition, increased regulatory scrutiny and a shift in investor attitudes, which has resulted in a rise of product development and a shuffling of the distribution landscape.

“Given the current market volatility and the rapid emergence of new instruments and new technology, it’s helpful for investment advisors to have tools and benchmarks to help navigate operationally as things continue to change,” said Anthony Sperling, Senior Vice President of Services at Advent and AUG Board Member.

The 2007 survey’s key technology and operations findings include:

• On average, the largest firms spent almost $1.4 million on IT and operations during 2006.
• Portfolio accounting generally accounts for the highest proportion of costs, averaging 29% of the total IT and operations budget.
• Trading accounts for just more than 13% of the IT and operations budget, with CRM making up nearly 8% of the total.
• More than 95% of portfolio accounting systems are developed by outside vendors, with the vast majority of trading and order management systems and reporting systems also developed externally.
• 27% of firms surveyed responded that all of their trades are executed electronically.

Compensation Trends
In addition to helping managers understand trends in implementing the technology and processes needed to best serve their clients, the study includes a detailed look at compensation across the investment management firms surveyed.  A significant amount of detailed compensation data was collected for nearly 900 individuals, ranging from chief executives to receptionists.

Continued Sperling, “Managing money is also about managing talent.  Money managers often struggle with compensation planning as they try to decide how best to measure their own or their employees’ performance.  The study attempts to show what companies are doing to attract and retain talent.  Details matter, so the survey asked very granular questions from performance measurement to vacation policies to insurance coverage.”

Key 2007 compensation and benefits findings from the survey include:

• Nearly all firms (97%) in the survey incorporate variable annual bonuses in their compensation plans.
• Profit sharing is offered to employees by 67% of the firms surveyed, while 28% offer stock options.
• December is the most popular month for distributing bonuses, with 62% paying out bonuses that month; 27% of firms reward bonuses quarterly.
• More than half of surveyed firms use objective measures to award incentive compensation, with 86% using firm profitability, 83% using personal performance measures and 54% using assets under management growth to determine bonus awards. New client growth was used by nearly half (48%) of surveyed firms to calculate incentive pay, followed by client retention (46%).
• The vast majority of U.S. investment management professionals covered by the survey start with two weeks’ annual vacation, with most never receiving more than four weeks’ annual vacation at most firms.
• Total cash compensation for a chief executive/president/managing director averaged $856,000, with a median of $380,000.
• Total cash compensation for a chief investment officer/director or researcher averaged $696,000, with a median of $284,000.
• Total cash compensation for a senior investment/portfolio manager averaged $411,000, with a median of $317,000.
• Total cash compensation for an operations manager averaged $117,000, with a median of $91,000.

The survey is available on the Advent website at:

About Advent
Advent Software, Inc. (, a global firm, has provided trusted solutions to the world’s leading financial professionals since 1983.  Firms in 60 countries use Advent technology and manage investments totaling nearly US $18 trillion.  Advent’s quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs. Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support organization. 

About Advent Users Group
Advent Users Group (AUG) is an independent organization formed in 1998 by a group of investment professionals using Advent products.  The group saw the benefits that a user group could have in sharing information and providing valuable feedback to Advent Software.  Advent embraced the idea and now benefits from the collaborative working relationship with the independent group, which now boasts over 400 member firms.  AUG’s ongoing mission is to bring together a diverse group of investment advisors who utilize Advent products, to share knowledge, define challenges, contribute to and advocate for a coherent vision for future technological solutions.

Jessica Miller     
Advent Software, Inc.     
(415) 645-1668

Erin Kestner                           
Advent Users Group
(330) 819-7144