Wealth managers and the multi-custody challenge

Wealth management as an industry is becoming increasingly independent of where assets are actually booked. How can financial institutions and wealth managers adapt to this trend?

In a recent study, it was reported that external asset managers (EAMs) have relationships with an average of six custody banks – going up to 40, in some cases. With this in mind, it is essential EAMs have the tools to manage all their clients’ wealth. The same can be said for financial institutions whose asset managers want to offer a 360-degree service to their clients – in addition to targeting a newer audience with greater demands.

Taking full custody of a client’s needs

By offering all the services a client needs under one roof, our clients can remove complex procedures and provide a smooth and efficient service.

In the finance world, achieving a consolidated view of each wealth client is crucial in delivering value-adding, competitive and, ultimately, successful wealth management services. However, getting there is cumbersome, delicate and expensive, in part down to the industry having yet to adopt a standard for interchanging positions and transactions. Even now, custody banks have their own protocol – sometimes inspired by overall standards like SWIFT – but, nevertheless, delivered in a unique manner.

And so, to compete in wealth management means providing a robust mechanism for consolidation of client positions. Wealth managers must also provide an accurate calculation of the overall performance, offering in-depth insights for a number of different scenarios and outcomes. By delivering this type of “concentrator” service, front-office staff can focus on the client offering instead of clerical work.

“Today, banks are rediscovering the benefit of accessing external custodian data to provide better or new services to their private or institutional clients.”

Assetmax

Creating a clear path to success

With the right wealth management tools, we’re helping wealth managers provide a better digital experience

Using our digital Avaloq Wealth platform, financial institutions and wealth managers can create an excellent customer experience – while using data analytics to create new business and services. Offering powerful, reliable, scalable and complete client and portfolio management functionality. In addition, our service– which is offered as a BPaaS (Business Processes as a Service) – which is designed to handle different custody information, giving our clients room to offer a complete multi-custody solution to their EAMs. In the process, attracting more assets and increasing their business in this key area.

Figure 1: Avaloq FIM workplace/WM platform: completion with ex-custody ability

If you’d like to know more about the multi-custody challenge, get in touch.

Our roadmap

Continuous improvement of our solutions – for the near and long term

Avaloq is setting up a partnership with a third-party service vendor to deliver its multi-custody solution that will provide the capability to interpret and verify the different ex-custody bank flows for consistency and ultimately feed the data received into the Avaloq Banking Suite. This data will then be integrated and used to update the positions and performance of each ex-custody portfolio, so that client consolidation happens automatically in the wealth management tool.

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