Whether you’re talking about a hammer or a fintech platform, you can only enjoy productivity gains with the right tool. Invest in the wrong tool for your practice, and it’ll end up being a liability rather than an asset.
That was the experience of Mike Damas from US-based Maryland Capital Advisors, according to ThinkAdvisor. Shortly after setting up his firm in 2005, he discovered that the technology system he’d purchased was actually costing him and his partner precious time.
The problem was that the system wasn’t a good fit with his firm’s particular investment strategy. They specialized in fixed income, which had nuances that differed from equities and mutual funds that the software couldn’t get. This forced Damas and his partner to go hands-on, correcting data on performance reports themselves.
Eventually, they tried to switch systems, but the second platform was still problematic. Software issues affecting daily reconciliations with the firms’ custodians forced them to manually download transaction and price files to ensure accurate booking.
With experience from his growing business, Damas was able to more thoroughly grasp what software system functions they needed. He eventually went with a system that could accommodate a more nuanced treatment of bonds, considering that his firm does not consider high-yield and emerging-market bonds as low-risk assets. The system also included a rebalancing tool that assisted Damas with tax-loss harvesting inaccuracies.
When searching for a fintech solution, it pays to keep your particular needs in mind. Some vendors may claim to have the perfect solution, but it’s best to start with the idea that a one-size-fits-all product will not be able to accommodate your firm’s specific financial approach.
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