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Industry Delegates agree Client Reporting is Becoming a Central Business Function in Response to Changing Client and Regulatory Demand

Rhyme Systems, a leading provider of asset management solutions, today announces the key findings from its industry Client Reporting workshop, held in London at the end of June to discuss the role of client reporting and the likely impact of MiFID.

The workshop provided a forum for senior industry professionals, to explore the changing role of reporting functions and the growing relationship between client reporting and customer service. Investment managers are continuing to place more emphasis on sophisticated client relationships with greater attention around using reporting functions to develop and enhance the relationship.

The event follows a UK market research study, conducted by Rhyme Systems in the first quarter of 2007 with a range of London-based investment management firms. This study focused on changing client demands analysing how increasingly sophisticated clients demand greater personalisation and flexibility from the traditional reporting model.


- Client Reporting as a Central Business Function

 Although the client reporting function fits into different areas of a business depending upon the size of a firm, it does appear that there is a trend towards integrating the service across business areas, rather than keeping it as a separate team
 One large London-based firm said it used to have a stand-alone team who produced quarterly reports but added no specific business value. They have now been involved more in other business functions such as performance measurement
 A smaller firm has different parts of the business involved at different stages of the reporting process and intends to further streamline the process by centralising despatch

- Client Reporting and the Future

 Participants agreed with continued momentum towards web delivery and the need for greater reporting flexibility to accommodate changing client needs
 In the future, all client reports may need to be bespoke – especially given the developing breadth of portfolios and expansion into different asset class investments
 Bespoke reporting presents revenue challenges to institutions – how to charge this back to the client? That said, most firms attending the workshop do not currently measure the cost of producing individual client reports

- Regulation and Reporting - MiFID

 Delegates did not expect MiFID to have a great impact on their plans for client reporting; most firms thought that their process were “on the way there”. A bigger issue is possibly proving to the regulators that they are compliant
 One area where MiFID requirements may present some complications is sending clients contract notes – as they typically do not need or want them
 Reporting of front office data, such as performance measurement and analytics, are also not anticipated to be significantly affected by MiFID
 Firms already believe existing regulation caters adequately for client needs. This includes UCITS provisions - stipulating that firms must have the correct risk control systems and adequate data reporting functions on complex instruments such as derivatives
 MiFID requires both the compliance and operations divisions within institutions to work together effectively – something which is not happening according to a number of firms

- Differences Between the UK and Overseas markets

 The workshop found almost unanimous agreement that there exist significant differences between client reporting in the UK and in other countries
 One delegate suggested, “The UK is more client sensitive, the US really don’t care.”
 US firms traditionally avoid over-personalisation in their reporting processes – preferring to focus on data
 It was suggested that perhaps UK investors are more savvy than their US counterparts – therefore more demanding in their requirements for customisation and bespoke information
 The US is the market leader in terms of quality data reporting and the UK is market leader in regulatory drivers