How a 360-Degree Client View Will Help Grow & Optimize Your Investment Management Firm

May 15, 2021 | Financial Industry

The relationship between investment management firms and their clients has been constantly evolving over the past 10 to 15 years. While the investment management industry was once relatively standardized when it came to the products and services offered, today’s firms are considerably more flexible, offering a wider range of billing models, financial services, and unique investment management agreements.

With these new customer experience models, it is also important that firms shift their thinking on customer relationship management when it comes to profitability, scalability, and customer communications. With Redi2 Revenue Manager™ investment management firms can easily get a 360-degree view of their client accounts to help streamline originating deals, minimize risk, improve customer relationships, and increase profitability.

What Is a 360-Degree Client View?

Simply put, a 360-degree client view is when you have all your most important client data and metrics available for access and analysis in one place. While this type of client view is obviously useful from a client communications standpoint, it can also be very valuable to investment management firms when assessing the revenues of specific clients, specific services, asset reporting, and much more.

What Are the Benefits of a 360-Degree View for Investment Management Firms?

According to Gartner, a leading research and advisory company, fewer than 10% of companies currently have a 360-degree view of their clients. What’s more, only about 5% of companies are able to use a 360-degree client view to make a positive impact on their business.

By capturing and analyzing the past and present behaviors of clients, investment management firms can ultimately improve relationships and make better business decisions. While capturing a true 360-degree client view may be challenging in some industries, Revenue Manager was designed to make it easy for investment management firms – here’s how.

Comprehensive View of the Total Relationship with a Customer

One of Revenue Manager’s most powerful features is its ability to give investment management firms a comprehensive view of the total relationship with a customer. Revenue Manager renders your data using powerful CFO Dashboards powered by Tableau. These dashboards will give you interactive visibility into a number of key performance metrics and indicators.

Firms can quickly pull data to learn the revenues per customer relationship, what the most popular mix of financial products are, provide transparency into key business metrics, and even give insights into client exposure.

With Revenue Manager, you can quickly determine whether the relationship with specific clients is deepening or subsiding and what kind of exposure the client has to various market events.

For example, if a customer is in fixed income investments and there is an unexpected movement in interest rates, this portfolio may see poor returns. With a 360-degree customer view, you will have more rapid insight into the potential issues allowing you to correct or discuss with the client.

Ensure a Scalable Process to Originate, Review, and Deploy Pricing Strategies

A comprehensive view of your clients will let you ensure that when you originate a deal, it remains consistent with established terms and fees. Investment management agreements that have been originated, reviewed and approved provide structure to the process and detailed reporting as well.

You also guarantee that an unapproved commitment cannot be made to a customer without first having oversight. This ensures all of your client relationships are established at profitable rates and that no mistakes are made.

More Accurate Revenue Forecasting

Seeing the bigger picture in terms of your customers can let you predict revenue based on data-backed assumptions. Factors like whether the market will go up or down, where interest rates are headed, and whether markets will stay flat or not can all be factored into your forecasting.

You can also use Revenue Manager to forecast based on your internal business data. For example, you can see if there is more money coming in or going out, what is the impact on revenue if fee schedules are increased by 2%, and what the effective basis point rate is.

Greater Visibility Into Profitability

With a 360-degree view, you get improved visibility on how profitable your business has become. You can gather information about which relationships and customers drive margins, providing you with better transparency in your firm’s overall profitability.

Think of Revenue Manager as enhanced transparency into your business. You can visualize things like the diversity of your product mix, analyze trends to see whether money is flowing in or flowing out, and how much is being deposited and withdrawn.

Most importantly, a 360-degree client view with Revenue Manager will allow you to understand profitability on a client by client basis. For example, you can pair revenue data with expense data to understand which clients are most profitable. Revenue Manager will also factor in how much time is spent with each client, the cost to service each client, and the overall energy dedicated to each client.

AUM Reporting

Besides providing information on your profit margin, a 360-degree view of your clients also provides insight into all the assets managed by your firm. You can analyze trends in terms of AUM on a monthly, quarterly, or yearly basis. You can also create snapshots as needed while having the ability to break down client-specific data based on reports.

Reduce Your Firm’s Reputational Risk

Finally, a 360-degree view ensures that all agreements you have made have been vetted, are profitable, and are appropriate before they are sent to your clients. Agreements that fall outside of the pre-approved profitability and diversity are flagged, so you can review them manually later.

You can also model scenarios to test and backtest to determine if the fee schedules are fit to purpose so that you can ensure they are hitting mandated profitability.

Schedule A Call With Redi2 Today

Establishing a 360-degree view of your client relationships can be a real game-changer when it comes to profitability and efficiency for investment management firms. After visualizing business data with a 360-degree client view, firms have dropped entire lines of business, expanded into new lines of business, and even changed entire business models.

Bringing in new clients is vital for any investment management firm to grow. However, understanding what type of client relationships and which products are most profitable as well as where you have the most risk can be crucial to building scalable growth.

With Redi2 Revenue Manager, you can better predict the best decisions for your clients and ensure that when originating a statement of work for services there is oversight to ensure that it’s consistent with established fees and terms.

If you’d like to schedule a demo of Revenue Manager one of our experienced product specialists would be happy to give you a tour of all of the features.