How are asset managers planning to rebalance their portfolios?

How are asset managers planning to rebalance their portfolios?

How are asset managers planning to rebalance their portfolios? Financial services software provider SS&C has released results of a survey titled 2016 Global Insurance Asset Management Technology Outlook. Polling 100 insurance and asset management executives in various fields of financial services including accounting, finance operations, investments, and technology worldwide, the study asked 28 questions to determine current challengers, concerns, and future directions in asset management operations.

“Our 2016 survey shows that large insurers and other asset management firms are expanding their portfolios to include a wider range of asset classes in an effort to increase yields in a low interest rate environment,” said J. Timothy Reilly, SS&C's senior vice president and general manager, institutional and investment management. A notable finding was that 33% of the responding asset managers plan on increasing their funds’ investments in commercial loans, alternatives, derivatives, equities and mutual funds over the next 12 months.

Of course, expanding fund portfolios is not a zero-cost effort. It comes with its own set of challenges and necessitates new strategies to adapt. “[P]rocessing new securities types was most frequently cited by survey respondents as a challenge to expansion, followed by compliance with related regulations and accounting standards,” said Reilly.

While 25% of the companies surveyed currently rely on technology solutions that are home-grown or provided by third-party investment managers, many are starting to migrate toward licensed software and outsourcing services.

“While many considerations come into play when insurers weigh the costs and benefits of choosing a software-centric vs. outsourcing model for their investment-related systems, our survey reveals that staff skill levels, regulatory compliance capabilities, and access to technology are foremost,” said SS&C Vice President of Institutional Technology Services Christopher Brown.

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