The investment consultant database market has seen significant consolidations in recent years. Major players in the industry have merged or acquired competing platforms, bringing multiple databases under one umbrella. While this trend creates efficiencies for investors and promises more comprehensive platforms, asset managers may be taking on hidden costs they're unaware of.
At IMSS, we have conducted initial data evaluations during client onboarding only to find that some asset managers have been paying for overlapping services from newly consolidated databases due to legacy contracts that aren’t revisited, a lack of communication from providers, or a provider that is simply not aware of consolidations themselves. As an asset manager, it's worth reviewing your contract annually and asking: Are you overpaying for your database reporting?
Here's what you need to know about database consolidation, the potential pitfalls, and steps to ensure your current data reporting setup is cost-effective and fully aligned with your goals.
Understand How Consolidation Affects Your Costs
Consolidation can simplify data access, but you might be paying twice for the same database reporting if you're unaware of the changes. Here are some common scenarios:
Legacy Contracts and Inertia: Contracts with third-party providers may have originally bundled access to multiple databases. However, even after consolidation, some contracts remain the same, meaning asset managers may unknowingly pay for access that has become redundant.
Specialization or Redundancy Needs: Consolidated platforms might retain nuances or unique capabilities that managers find helpful. Some asset managers intentionally hold onto multiple subscriptions within the same provider's suite to capture these distinct features, especially in niche markets.
Lack of Awareness or Communication: Some consolidations happen quietly, without a complete description of what each database now offers or how redundancies are being handled. If a provider is not staying on top of the changes, asset managers may inadvertently pay for overlapping services.
Partial Integration: In many cases, even after a merger, consolidated databases operate as distinct entities with separate fields, user experiences, and investor reach. This partial integration can leave managers feeling compelled to maintain separate subscriptions to access the complete picture.
How to Review and Streamline Your Reporting
Now that you know the consolidation trend, you should assess your reporting setup. Here's a step-by-step approach:
Identify Your Current Providers and Contracts: List all current databases you subscribe to and their associated costs. Check your contracts for terms that might automatically renew or that you might need to renegotiate in light of consolidation.
Ask Providers About Overlaps: Contact your database providers and ask about consolidations, overlaps, or duplicative services. Providers may offer options to streamline access and help eliminate redundant subscriptions, potentially reducing costs.
Assess Any Unique Needs: Determine if you need distinct features from each database or if a streamlined, consolidated approach will still meet your needs. Some asset managers maintain multiple subscriptions for specialization but consider if the added value justifies the extra cost.
Evaluate Transparency and Support from Providers: How proactive has your provider been about notifying you of these changes? If there's been little communication or transparency, consider alternatives. Look for a provider that meets your data needs and offers a straightforward and transparent approach to pricing and service.
Consider Working with a Database Reporting Partner
If tracking and managing all of these changes feels overwhelming, you may benefit from working with a dedicated database reporting partner who is following the trends. An experienced partner can help assess your data needs, evaluate where redundancies can reduce costs, and ensure your profiles are complete across all relevant databases.
At IMSS, we take a very hands-on approach to helping companies manage their data and ensure improved processes and accuracy to achieve a 90+% completion rate across all databases we support you in reporting to. We pay attention to the evolving landscape of changes/consolidations to ensure our clients are paying only for what they should be.
We invite you to contact us if you'd like to discuss your existing data collection and reporting processes and how our Data-Centrix platform automates reporting, enhances data completeness, and provides visibility across multiple databases.
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