For asset managers, accurate and timely reporting on assets under management (AUM) isn’t just a regulatory or operational requirement—it’s the foundation of client trust and the backbone of informed decision-making. Yet, many firms face recurring challenges when reporting AUM in consultant databases correctly.
Whether it’s a data integration hiccup, the complexity of managing diverse portfolios, or confusion between AUM and performance metrics, these issues can slow you down, create inaccuracies, and even jeopardize client relationships. Over years of navigating these challenges, we’ve identified common pitfalls and practical solutions to help asset managers streamline their reporting processes. Let’s dive into some of the most prevalent issues—and how to tackle them head-on.
1. Data Integration Woes
When data from multiple sources—client portfolios, financial institutions, and investment managers—doesn’t align, reporting can feel like assembling a puzzle with missing pieces. Automating data feeds and ensuring seamless integration from custodian systems and portfolio management tools can alleviate this problem. Regularly verifying data quality prevents surprises down the road.
2. Inaccurate Calculations
Errors in AUM calculations can stem from misclassified assets, incorrect formulas, or simple data entry mistakes. A rigorous review process—covering everything from data input protocols to formula accuracy—can mitigate these risks. Valuing asset categories like equities, fixed income, and alternatives is vital for consistency.
3. Complex Portfolio Structures
Managing diverse investment strategies, multiple currencies, and vehicles across regions adds layers of complexity to reporting. Implementing portfolio management systems that support consolidated reporting ensures clarity and consistency. These systems should also support multi-currency reporting and automatic currency conversion, taking exchange rates into account for accurate, unified AUM data.
4. Lack of Standardized Processes
When consultants and teams use varying methods to calculate and report AUM, discrepancies are inevitable. Standard operating procedures (SOPs) are your best defense, offering clear guidelines for definitions, calculations, and timelines. Additionally, consistent client segmentation protocols ensure that reports can flexibly account for various categories, such as client type, investment strategy, or region.
5. Outdated or Inconsistent Valuations
Accurate valuations are non-negotiable. Using real-time data feeds or scheduling regular updates can ensure your reports reflect the most current information.
6. Performance vs. AUM Reporting Confusion
Confusion between AUM and performance reporting can mislead stakeholders and skew assessments of growth and returns. Clearly, separating these two metrics is critical. AUM reports should focus solely on asset values, while performance reports should provide returns relative to benchmarks, ensuring each serves its intended purpose without overlap.
Prospects and clients expect nothing less than precise, reliable, and thorough reports. If you’re encountering any challenges, don’t wait for small errors to turn into larger issues. Addressing these gaps now can safeguard prospect and client relationships, enhance operational efficiency, and bolster your reputation. Navigating the complexities of AUM reporting doesn’t have to be a solo effort.
With years of experience in resolving these issues, the IMSS team understands the nuances of what works—and what doesn’t. Let’s discuss how we can help streamline your processes and optimize your reporting framework. Contact us today to take the first step toward better, more accurate AUM reporting.
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