17 May 2016



The typical CEO of an asset management company has many things on his mind, but data cleanliness is unlikely to be top of the list. It really ought to be, though, for several reasons.

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Take the sales team

When they visit prospective institutional investors, having confidence in the accuracy of the asset manager’s fund data is hugely advantageous. And here’s why: any given institutional investor has a limited window of time throughout the day to manage portfolio allocations and decide on its composition. When they embark on doing due diligence on a new fund, they have one tool to rely on before making an allocation: fund data.
Whether this comes from a Bloomberg terminal, or looking at a ratings site such as Morningstar, data is the primary source of information for an investor when assessing funds.
Having poor fund data—or worse, missing fund data—can hamper the efforts of even the best sales team. When they step into a meeting with an investor, it’s imperative that the asset manager’s fund(s) look exactly the way they should, given the limited bandwidth institutions have on making allocation decisions.
This may sound obvious. After all, it’s no different to a portfolio manager making investment decisions on a stock, the vicissitudes of which depend entirely on the accuracy of a company’s financial data.
However, when we onboard an asset manager client we find that the average data accuracy is only between 45% and 65%. But there are a number of things that can be implemented to get that data scrubbed and cleaned to a higher standard. By aggregating data, developing rules-based workflows, transforming data through re-formatting, and reporting exceptions and anomalies to enhance quality control and file transmission, the accuracy of fund data rises to levels in excess of 98%.
Having someone who not only cleans fund data but monitors its accuracy everywhere it appears, and doing this on an ongoing basis, can bring real dividend[/vc_column_text][vc_column_text el_class=”collaborate”]

Don’t risk your Michelin star

Ultimately, missing or inaccurate performance data sends out a bad brand message to investors. It also impacts ratings sites and other institutions in terms of their ability to accurately judge funds for awards. Indeed, fund ratings are a crucial part of a fund’s marketing image.
The analytics used for award and rating attribution depend upon the quality of the underlying data available to them. Having a 5-star rating with Morningstar, for example, is no easy task, just as earning a Michelin star is no easy task for a chef de cuisine.
Imagine if the sous-chef were to use the wrong ingredients in a sauce and the resulting meal was served to a Michelin inspector. In one fell swoop the chef de cuisine’s chance to earn that coveted first Michelin star will have disappeared down the sink.
So data accuracy is paramount. It gives an asset manager an edge against the competition.
A NAV showing the same price for several weeks or that is artificially low because of missing data, incorrect TNA, or incorrect fee amounts, all impact the fund’s rating and potentially prevent the manager from winning awards.
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Turn down the noise!

Clean data also improves sales team efficiency by reducing the amount of noise.
This allows the asset manager’s sales team to be proactive in terms of spending more time with an investor managing their portfolio, cross-selling and building the relationship with the investor, rather than being reactive, fielding enquiries and complaints from the client about incorrect or inconsistent data.
The reduction of noise also applies to internal departments. Who’s got the correct data? Where’s the source of the correct data? That constant back and forth, trying to locate data and fix incorrect data, ends up becoming a cost centre and a sizeable distraction.
One of our clients achieved a 25% reduction in this noise by running their data publication through us. It allowed them to drive efficiency in the sales process by allocating more resources to higher value-added tasks. And this reduction in noise has an impact on the TER of funds.
No asset manager wants to degrade his brand because of unclean data. It shows a lack of operational excellence, leading investors to question the efficacy of the compliance and sales team.
Instilling proper processes can boost the quality of data and lead to positive impacts across a fund management business. And if it leads to industry recognition and boosted sales… well, that is a game changer in anyone’s book.

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