Operations & Compensation Metrics & Best Practices. Preliminary Highlights from the 2018 Survey

Transcription

1 Operations & Compensation Metrics & Best Practices Preliminary Highlights from the 2018 Survey

2 The Survey Conducted by AUG, The Exchange with analysis by ANZU, an independent research firm Underwritten in part by SS&C Advent and the IAA AUM Cohorts (% of Total) XL ($5B +) L ($2-5B) M ($1-2B) S (< $1B) One of the industry s most comprehensive surveys of operational and compensation practices Results are free to survey participants 36% 19% 32% 13% 2

3 3 Asset Flows Asset Flows (Median % of AUM) Median % of AUM 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% Asset Outflows Asset Inflows Net New Assets

4 4 Scale Efficiencies Median Revenue Per Employee $

5 5 Products & Services Does your firm plan to refocus its offering in the coming year? Staying the course Consolidating products & services Launching new products & services Asset Managers RIAs 0% 20% 40% 60% 80% 100% % of firms

6 6 Employee Hiring & Turnover Average Employee Turnover as % of Total Headcount ALL XL L M S XS Employees Joining Employees Leaving Net Change in Employees (3.4) 7.5

7 7 Spending on Investment Operations Planned Changes to Spending on Investment Operations % of firms 100% 80% Increase Decrease 60% No Change 40% 20% 0%

8 8 Technology Priorities Top IT Initiatives in Coming Year (Top 3 Only) % of firms 60% 50% 40% 30% Portfolio accounting and client reporting Client service contact management Network / systems security 20% 10% 0%

9 9 New Technology Rate your firm s view on each of the following technology initiatives Actively Implementing % of firms 100% Interested but still exploring Not important or suitable for us 80% 60% 40% 20% 0% Process automation Interactive technologies for clients Big data and predictive analytics Artificial intelligence for research

10 10 Workflow Optimization Rate each factor for potential to improve trading & compliance workflow Significant Potential Little or no Potential Asset class coverage Integration between systems Flexibility of models or rebalancing scenarios Scalability/speed of response System maintenance, updates/upgrades 0% 20% 40% 60% 80% 100% % of firms

11 11 Cloud Computing Which best describes your cloud strategy? Public SaaS (apps only, rest private) 27% All private / onpremises 23% All Public (IaaS, PaaS, and SaaS) 8% Mix of public and private 42%

12 12 Outsourcing Growth in Percentage of Firms Outsourcing Over Past 5 Years CRM Portfolio accounting / reconciliation Trading / order management Document Storage (electronic) Shareholder services retention Research management 0% 5% 10% 15% 20% 25% 30% Percentage Growth

13 13 Performance Metrics Determinants of Incentive Compensation Personal performance measures Firm profitability Client retention AUM growth New clients Investment performance (relative) Investment performance (absolute) 0% 20% 40% 60% 80% 100% % of firms

14 14 Firm-Wide Compensation Data SENIOR EXECUTIVES President, CEO, Managing Partner Chief Investment Officer Chief Operating Officer Chief Financial Officer Chief Compliance / Legal Officer INVESTMENTS Senior Portfolio Manager Senior Research Analyst Senior Trader Portfolio Manager Research Analyst Trader Other Investment Specialist COMPLIANCE Senior Compliance Professional Compliance Professional Compliance Support MARKETING Head of Marketing Senior Marketing Professional Marketing Professional Marketing Support SALES Head of Sales Senior Sales Professional Sales Professional Sales Support CLIENT SERVICE / RM Head of Client Service / RM Senior Client Service / RM Professional Client Service / RM Professional Client Service / RM Support TECHNOLOGY Chief Technology / Information Officer Network Administrator, IT Support OPERATIONS Head of Portfolio Accounting and Admin. Operations Manager Senior Portfolio Administrator / Accountant Portfolio Administrator / Accountant Performance Analyst Other Operations ADMIN AND SUPPORT Head of Human Resources Office Manager / Administrator Administrative Assistant Internal Accountant / Bookkeeper Receptionist

15 Preliminary Takeaways Net asset flows are slowing down 2. Lack of scale proves challenging 3. Asset managers expanding products & services 4. Hiring continues, but only to replace lost headcount 5. Spending on IT and operations keeps rising 6. Client service technology is being prioritized 7. Processes are being automated where possible 8. Interactive technologies are being rolled out 9. Cloud is being used in a variety of ways 10. Performance metrics emphasize client retention