Optimizing Fund Reporting and Client Engagement with Shadow Accounting

Investors now demand immediate access to portfolio information, presented in a clear and concise manner. They seek insightful appraisals of market trends and proactive strategies that demonstrate how fund managers are optimizing investments. Consequently, fund managers must adeptly craft and distribute personalized communications while navigating intricate data sets, diverse reporting standards, and the need to deliver real-time insights that comply with industry regulations and align with corporate branding standards.

Together, all of these reporting challenges can impede the decision-making process, affect investor confidence, and hinder regulatory compliance. Addressing these challenges requires a deep understanding of both the underlying data and a robust strategy for meeting the evolving needs of fund management reporting. Fulfilling these expectations efficiently is crucial for maintaining investor trust and fostering long-term client relationships.

In this blog, we will discuss how client communications and reporting work in the fund management industry. First, we’ll cover some common challenges fund managers face when communicating with clients, prospective clients, and the market. By looking at these issues in depth, we can better understand the situation fund managers face and find ways to improve communication and reporting. Three of the most urgent challenges in this respect are:

1. Highly manual processes- One of the biggest challenges fund managers face is dependence on manual processes for data management. This typically involves using spreadsheets to collect, format, and deliver important information. These manual methods are not only time-consuming but also increase the risk of errors and inconsistencies. For instance, manually entering data or performing calculations in spreadsheets can lead to mistakes that compromise the accuracy and reliability of reports. Additionally, manual processes require significant time and effort, diverting valuable resources away from more strategic tasks. The inefficiency of manual processes ultimately prevents timely and effective communication with investors and the market, leading to poor outcomes in terms of client reporting and overall transparency.
2. Lack of scalability- While fund managers face rising demands for more comprehensive and frequent communication with clients, current systems and processes often can’t easily scale up to meet the need. For example, a fund manager may start with a small number of investors, using basic tools like Excel to compile and send reports. As the fund grows and attracts more investors, the volume of managed data increases and reporting requirements become more complex. The struggle to keep up with demand leads to errors and delays in reporting, which ultimately hurts client satisfaction.

   3. Technology issues- For many fund managers, the technology involved in reporting is a significant challenge. Many funds rely on complex in-house systems or external technology providers to compile and distribute reports. This dependency can lead to bottlenecks and delays if technology issues (even minor ones) or resource constraints slow down the reporting process. For example, a fund manager may struggle to integrate data from various sources or face workflow slowdowns whenever the in-house IT team is stretched thin. As a result, funds frequently ask how to streamline the reporting process and reduce reliance on complex technology to ensure more efficient, timely delivery of reports.

Now, let’s take a look at four essential capabilities fund managers need in order to overcome these challenges and ensure fast, smooth reporting and investor communications:

1. Deliver custom experience at scale- Shadow accounting service providers help fund managers operate at scale while providing a personalized experience for each client. This approach is crucial for meeting diverse client needs efficiently. For example, shadow accounting systems can automatically generate reports customized with specific colors for different products (e.g., red and green for product one, blue and yellow for product two), enhancing client engagement and ease of identification. Additionally, shadow accounting services can tailor quarterly analytics to a client’s exposure to certain asset classes. By omitting fixed-income analytics for portfolios with little to no fixed-income exposure, reports become more relevant. By automating these processes, shadow accounting services allow fund managers to manage large volumes of data and reporting tasks seamlessly to improve accuracy, efficiency, and client satisfaction.
2. Meet ad hoc reporting needs efficiently- Shadow accounting services enable fund managers to respond to one-off reporting requests more easily. While standard monthly and quarterly reports are essential, clients often ask for ad hoc, intra-period, or customized reports with significant data. Shadow accounting services make it easy for fund managers to quickly generate these customized reports in a timely and consistent manner. As a result, clients feel more confident and trust the services provided. Additionally, being able to meet one-off requests shows that fund managers are adaptable and dedicated to providing personalized service that greatly improves overall client satisfaction.
3. Comprehensive data integration- The first step in effective client communications is comprehensive data. Given the many sources and massive volume of data in play, gathering the most comprehensive and up-to-date information is critical. Shadow accounting services directly access data from multiple sources, including accounting, performance, market data, customer relationship management systems, data warehouses/marts, and other systems. Because shadow accounting integrates directly with these data sources, the process is seamless. The resulting reports are timely and responsive to upstream changes in source systems, making them far more dynamic than reports driven by static data snapshots. Comprehensive data integration also eliminates the need for repetitive data extraction, transformation, and loading, ensuring more efficient and accurate reporting.
4. Multi-channel client engagement- Enabling multi-channel client engagement is crucial for fund managers because clients expect information and insights delivered in their preferred format. Shadow accounting systems excel at managing client preferences by distributing content across various channels, including online platforms, CRM/CMS systems, and portals. Shadow accounting also simplifies the process by allowing reporting components and templates to be designed once and distributed seamlessly across digital and print channels. This approach ensures consistent reporting and enhances client engagement by providing information in convenient formats that clients prefer. By leveraging shadow accounting services, funds can meet client expectations for versatile and accessible reporting across multiple channels.

Navigating the complexities of client communications and reporting requires innovative solutions tailored to meet evolving demands. IVP Shadow Accounting offers robust capabilities that address these challenges head-on. By enabling personalized client experiences at scale, efficiently handling ad hoc reporting, integrating comprehensive data seamlessly, and facilitating multi-channel client engagement, IVP Shadow Accounting empowers fund managers to enhance transparency and optimize client relationships. These advancements not only improve operational efficiency but also foster trust and confidence among investors, paving the way for sustained success.

Learn more about IVP Shadow Accounting right now or contact sales@ivp.in to schedule a live or online demo.