As former investment managers, we struggled to find transparent and unbiased information about systems. We felt vendors always tried to put their solution forward as the best option. The truth is that no two investment managers are the same, and no software can be the best choice for everyone.
This guide is our attempt to provide an unbiased guide to capabilities to consider and compare when looking for the best software to manage your investment portfolios, be it funds or managed accounts.
In the name of transparency, we have created two public articles about what firms Limina is most suited for and when Limina might not be the right choice.
Here are some questions we encourage you to ask about your firm’s Investment Software (IMS) needs before you start the search for a solution:
Below are six examples of potential system landscapes that might fit depending on which operating model you have today and are targeting in the future. Some solutions can work in several setups, such as Limina, illustrated below.
For more insights into questions that can help you match your prospective solution to your
firm’s needs, read our article: Put Your Needs First: Questions to Ask Yourself When Procuring an IMS download the complete guide:
Many straightforward considerations exist when selecting the best investment management system, such as current capabilities and fees. Asset class support is also critical to evaluate whether you invest in stocks, bonds, mutual funds, exchange-traded funds or derivatives.
In this section, we explore two less commonly identified aspects that tend to become a surprise after a system has been selected, and the decision is too late to reverse.
As your firm develops and evolves, so will the environment you operate in. Staying agile in an ever-changing industry can be the difference between stagnation and long-term growth. Therefore, ensuring your IMS is future-proofed and adaptable to change is essential. Here are a few quick tips to keep in mind for your system evaluation:
Your asset management business will develop and evolve, as will the environment you operate in, from new investment strategies launched to updated portfolio compliance requirements. Future-proofing systems and staying nimble in an ever-changing industry can keep you ahead of the competition.
To dive deeper into the topic, read our article: 4 Factors Helping Asset Managers Future-Proof Their Investment Management Platform and Systems.
Depending on your firm’s specific needs, the features and functionality you’ll require the IMS to perform will vary. Let’s dig into four aspects that have gained increasing importance recently.
Integrating systems isn’t easy for several reasons. Swift and FIX are all good, but they’re not fully standardised and don’t cover all data that must flow between systems. And many solutions or providers don’t support these formats. We still recommend ensuring that any software you consider supports at least these two as a baseline.
Secondly, some software vendors offer managed integrations. The vendor takes full responsibility for a connection, and the most common examples are trading and market data connections. Not all vendors have these kinds of managed integrations, and when they do, the connections covered differ, so we urge you to compare.
Finally, when neither of the above is possible, you need a way to create integrations yourself. Most vendors offer options for your developers to do this via database access or API. Read more about integration approaches for investment management systems.
At Limina, we’ve created an alternative to needing developers for integrations. We’ve built a configurable import/export engine that your business users can use, removing the need to involve developers in setup and maintenance. Follow the link for an introductory video on how it works.
Advanced and automated data ownership and governance capabilities enable investment managers to achieve a complete, accurate, and timely view of portfolio data. When you base your investment decisions on quality data, it significantly reduces operational risk. Some Investment Software Systems will have built-in investment data management tools, which help you achieve the following:
Top IMS solutions also have custom validation rules and automated data quality control, automatically flagging potential data issues early. Such flagging will enable your team to spend valuable time resolving problems proactively rather than reactively, subsequently improving overall firm-level profitability.
Extending data models with custom data and analytics enables your team to add information, such as analysis data, ESG data and risk classifications, and see it in the native portfolio views. Such data model extensions will allow you to incorporate data into workflows easily, increasing overall process efficiency, oversight and accurate decision-making.
The best Investment Management Systems will enable you to integrate market and sustainability data from multiple sources seamlessly. Additionally, you should be able to handle data conflicts efficiently and in a way that ensures total data auditability. This way, any data changes that could affect your pre/post trade compliance checks or investment decisions are streamlined and accounted for without risky human intervention.
Fast time to market is another core requirement. And not just in the initial implementation process. As you scale your business and need new functionality in the IMS software, frequent upgrades will allow you to continue developing your business without having to wait for IT.
The best IMS architecture is based on microservices with multiple server components. Such architecture ensures system upgrades can be completed quickly and safely without affecting the rest of the application.
Finally, a microservice architecture is one way to minimise technical debt, avoiding problems for investment managers. Problems avoided include maintaining development speed over time, even as the system grows in complexity.
Not only does the system need to match your needs, but so does the vendor. Here are two questions that will help you determine if you match each other.
As former investment managers, the best customer service is, in our opinion, personalised. Client relations that understand your investment strategies are vital to ensure you get the right, most efficient support.
Supporting questions:
When evaluating prospective vendors, it’s important to understand whether they will be receptive to enhancement requests and if there are concrete examples of completed enhancements. If the vendor has supported firms of a similar size and complexity with strong testimonials, they can very likely support you, too.
Supporting questions:
When selecting the best IMS solution for your firm, consider how that solution is fit to enable outsourcing of functional areas now and in the future. For example, is it built to operate in real-time with an outsourced operations provider so you can see cash movements immediately to empower better and faster investment decisions?
Which is the top investment management software for your firm will ultimately depend on your specific business needs, priorities and growth goals.
To recap, here are some of our recommendations beyond the straightforward questions such as current functionality:
To dig even deeper, download our complete guide today.