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03 February 2023

A Client-Centric Experience with a Lean Team? It's Possible.

Investment managers are turning to new strategies as they face increased pressure to deliver alpha and justify fees while aligning with unique client requirements. Managers are meeting this demand and differentiating themselves with portfolio customization, a client-centric approach accounting for individual investors’ preferences, objectives, and values. What has historically been a time-intensive and unattainable practice for a firm’s resources can now be done at scale by bringing intelligent automation to portfolio construction, rebalancing, and trade creation. Fueled by the need for specific tax awareness and restrictions, and more recently in part by greater investors, both institutional and individual investors are looking for more customized investment solutions. The challenge is delivering on the promise of customization efficiently and cost-effectively across hundreds or even thousands of individual portfolios. Advisors who can meet that demand stand to gain from a stronger value proposition.

In a previous webinar, Jake Urban, Vice President of Investment Operations at FCI Advisors, joined me to address questions on portfolio customization, among other topics. In 2020 Kansas City-based FCI, a long-time SS&C Advent client, migrated its Advent Investment Suite to our managed services platform. Simultaneously FCI adopted Advent Genesis, our cloud native portfolio management solution that brings intelligent automation to portfolio teams. Advent Genesis allows managers to automatically identify and efficiently substitute securities that meet the investor’s goals into model-based portfolios while staying in line with portfolio strategy and objectives. It further enables managers to quickly identify tax harvesting opportunities to support investors’ tax management requirements.

FCI uses Genesis to help manage over 13,000 mostly discretionary accounts for individuals and institutions. As Jake puts it, the firm respects “what clients are passionate about” and are responsive to their expectations. “We’re here to serve them,” he says. Genesis gives firms the means to quickly identify securities that meet the portfolio manager’s strategic goals while also meeting a client’s individual objectives. Automation is certainly helpful in streamlining that process, Jake points out, but it is only part of the equation. Portfolio managers still need to engage with clients, understand their preferences, and communicate the effects of customization in their portfolios.

The conversation also addressed the challenges FCI encountered as a result of rapid growth in a short time. The resulting strain on resources compelled the firm to reevaluate its approach to technology, which ultimately led to the decision to centralize and consolidate the firm’s systems and outsource to SS&C Advent. While such a transformation involved a bit of a cultural shift, people adopted it quickly and now appreciate the efficiency of having all their data accessible in one place. FCI’s experience is instructive for any firm considering the managed services option.

Portfolio customization is a way for firms to deliver a more client-centric experience that helps drive loyalty and retention, as well to attract new prospects. For a deeper dive into the subject and some practical information from a firm that has successfully migrated to the cloud, watch the full webinar.