Cumbersome client data acquisition and onboarding processes, along with trading delays due to missing or inaccurate client documentation, are top concerns for buy-side firms, according to a report from TABB Group.

The study found 62 per cent of respondents experience challenges gathering and maintaining data from their clients, including the need to ask clients for additional documentation to ensure data correctness and consistency for Anti-Money Laundering (AML)/Know Your Customer (KYC) compliance. 
 
TABB Group’s research suggests that individual investment managers could avoid costs of over USD11,000 per onboarding by improving client data and document management processes.
 
In addition, the majority of firms reported delays in setting up trading relationships, such as the configuration of new client, broker or custody accounts due to the weaknesses of their client data management strategies. 
 
Estimates from TABB Group’s research suggest that the average annual cost from trading and settlement delays is between USD1.5 million and USD2 million for each individual investment manager.
 
Dayle Scher (pictured), senior analyst at TABB Group and author of the study, says: “It is apparent from the findings that investment managers continue to face many challenges when it comes to managing client and legal entity data. Much of that pain can be alleviated through the adoption of utility model solutions, which can help firms to cope with increasing regulations and free them to focus on their core competencies of managing investor portfolios.”
 
Matthew Stauffer, CEO of Clarient Global, a client data and document management joint venture set up by Barclays, BNY Mellon, Credit Suisse, Goldman Sachs, JPMorgan Chase and State Street, says: “Asset managers are under significant pressure to effectively onboard their own clients, while also responding to the changing and often redundant demands of their banks and broker-dealer counterparties. As a result, we have seen over 100 buy-side firms adopt Clarient Entity Hub in order to securely manage their entity data and documentation, increase transparency and reduce the time required to be ready to trade on behalf of a client.”