Effective Cost Forecasting and Budgeting in Asset Management

Fund firms want to make the most of advanced technology for cost forecasting and budgeting — and for good reason. By automating the process of budgeting, accruing, and validating fund expenses, firms can increase accuracy, provide more frequent reporting and analytics, and minimize risk, among other benefits.

Nicsa members got the scoop on best practices fund companies are using in this area during a recent #WebinarWednesday event on the topic. Andrew Peddar, General Manager, Revenue and Expense Management Solutions at Broadridge Financial Solutions, moderated the panel. 

Rourke Dillon, Director at Citi, said his firm is looking to scale major operational processes, and expenses is one area of concern on his list. “It’s one that’s increased in volume and complexity over the last few years, and with the diverse client base and variability that Citi has, it’s really critical to look at streamlining this process.”

Philip Blais, Senior Director of Revenue and Expense Management Solutions at Broadridge Financial Solutions, added that the challenges experienced in this space are universal, regardless of the firm’s size. 

“Technology that allows both large and small firms to complete budget analysis and reconciliation and forecast their accruals more frequently — without negatively impacting day-to-day operations — will enable firms to drive down risk and be less impacted from an efficiency standpoint by increasing volumes of fund events,” he said.

From a product manager point of view, Dillon said his team strives to achieve full transparency around client workflow and the approval process in terms of payment status and supporting details. In addition, his team is looking to reduce the number of bespoke processes it has today, as well as implement enhanced reporting tools.

Dillon said a reliance on Excel and other non-industrial-strength solutions are driving firms to rethink their overall expense and payment processes — or, potentially, to outsource the activity. From a client or prospect’s perspective, he said it’s also important to move non-standard tasks to third-party administrators when possible.

Blais said data visualization and business intelligence software is becoming more relevant in the budgeting and expense space. “The ability to organize and present datasets to key decision makers, especially as complexity within the budgeting process grows and as vendor/firm relationships expand, is going to be extremely beneficial, both from a management and operational perspective,” he said. 

Nicsa thanks Broadridge for sponsoring this webinar. For more in-depth information, members are free to listen to the webinar via our archives.

Note: Although the observations contained in this work represent the best thoughts of the individuals comprising the Nicsa panel, they do not necessarily reflect the views of Nicsa or any of its member organizations. Matters addressed in this work may touch upon legal or regulatory matters, however nothing herein is intended to be or should be construed as legal advice. You should contact your own counsel in order to obtain legal advice regarding these or any other matters.



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