Gresham Technologies : Why wealth managers struggle with fee settlement – and how to streamline the process – Natural Self Esteem

Accounting for client fees is one of those key functions within an asset manager’s business that directly impacts revenues, cash flows and client relationships. Audit and compliance challenges can also arise from inaccuracies and inefficient workflows.

As the complexity of assets and portfolios continues to increase, so does fee billing. Investment managers must be able to demonstrate the accuracy of fee calculations, manage cash flows, meet specific client requirements, ensure the integrity of processes and controls, and be prepared for audits and compliance reports.

Why is billing so tedious and complex?

Quarterly or monthly fee reporting is only a function of Chief Financial Officers (CFOs) and their finance teams. When they use spreadsheets for calculations and billing details, it can take weeks to calculate, format, review, and send accurate bills.

And the process is getting harder and harder for several reasons:

  • Investing in more complex assets such as alternatives and derivatives

  • Huge amounts of data from multiple systems and sources

  • Significant growth in assets, accounts and services

  • Continuous streams of compliance regulations

A fragmented, inefficient process can introduce a number of risks and challenges.

The impact of errors and delays

Finance teams face inefficiencies throughout the billing lifecycle that can lead to costly errors and risks. Not only does this negatively impact revenue streams, but also customer relationships, audits and compliance.

In addition, client fee data is relevant to many functions within an investment management company. The ability to extend this data to downstream systems is key to increasing operational efficiencies and controlling risk.

But all too often, billing or operations staff must re-enter data into multiple platforms to calculate toll-free performance numbers, increasing the likelihood of data entry errors and freeing staff from time to focus on higher-value tasks. Additionally, the lack of review and approval workflows means these errors go undetected and reach the customer.

Executive teams are also striving for greater visibility into revenue streams. Data analysis and reports related to customer fee billing can give them the insights they need to forecast revenue, assess profitability when needed, and make business decisions.

How to optimize billing

The use of spreadsheets, disparate data and fragmented processes are the main causes of billing problems. Only a systematic billing workflow can provide flexibility, remove constraints for sales teams, and eliminate complaints, disputes, and painful audits.

A controlled, auditable billing process should support:

  • Flexible and consistent fee calculation

  • Billing Features

  • Review and “four eyes” approval workflows

  • Audit Tracking

  • Tailored invoices and personalized customer experiences

  • Privacy and security of customer data in accordance with GDPR regulations

  • Compliance with MiFID II and other regulations

  • Internal and external system interfaces

  • data aggregation

  • Analytical Reporting

  • sales forecast

  • Complex assets and portfolios

  • Asset and Account Growth/Scalability

Wealth managers, regardless of growth or complexity, don’t have to grapple with client fee billing and then wonder what will happen on their next audit. Accounting teams tend to be small and focused on many other tasks. As companies grow their assets, accounts and service offerings, they need to ensure accuracy and personalization while reducing billing cycles from weeks to days.

An integrated, efficient process that combines billing, data, and reconciliation can improve employee productivity and enable businesses to serve their customers more easily and effectively.

Wealth managers have more opportunities than ever to free teams to focus on other tasks, reduce risk, and alleviate the disruption and pain of billing. Automation and flexible service options are key to an error-free process that controls compliance and audit risks and provides a positive customer experience.

We help businesses scale growth through more accurate and flexible billing and best practices. Get started by scheduling a call or demo.

Gresham will be present at InvestOps USA March 28-30, 2022 in Tampa. Book a meeting on siteto learn more about how to better manage your data, reconciliation, and billing operations.

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