To maximize market exposure, fund managers offer a diverse range of investment opportunities via multiple fund administration platforms. In such a volatile and constantly fluctuating market, new insights and investment research are frequently available. Discretionary fund managers must adjust asset and fund allocations, swaps and trades in line with each client’s risk profile to proactively maximize returns and mitigate risk.

To ensure client investment positions are accurately represented across every fund administration platform, model portfolios require periodic rebalancing to reflect how the fund is invested. If this process isn’t executed within the required time limits and with 100% accuracy, fund managers face significant financial impacts and put their clients at risk.

Challenges with Manual Portfolio Reconciliation 

Manual portfolio reconciliation puts operational teams under repeated periods of unnecessary pressure. Discretionary fund managers operating like this leave themselves wide open to the impacts of failing to mitigate risk with technology. When firms try to navigate this process manually, they run into issues, including:

• Missing the market: If underlying asset values change during the lengthy process of updating multiple platforms, it leaves clients at risk of receiving an inaccurate investment position on their portfolio – which can be costly.
• Risk of errors: Multiple complex and tedious manual steps can significantly increase the risk of human error, even if there’s a four-eyes verification check in place. This can cause inaccurate investment positions and failure to comply with regulations, resulting in financial penalties and additional time and cost spent fixing those errors.
• Workload spikes: Peaks of period activity can overload operational teams. This pulls their focus away from daily tasks requiring their attention and removes any opportunity to add value to client-focused work.

Intelligent Automation Solution for Portfolio Reconciliation 

Luckily, there’s a solution that can help you remove these challenges and associated risks. SS&C Blue Prism deploys intelligent automation, delivered as a digital workforce, to replicate any process undertaken by a human at a faster pace, and with 100% accuracy every time. Putting digital workers to the task of reconciling fund and asset allocations, trades and swaps enables your firm to benefit from:

• Enhanced productivity: Eliminate peak workload periods so your team can focus on excelling in their daily processing activities and on client-facing initiatives that create value.
• Assured accuracy: Ensure investment position accuracy as digital workers never make mistakes. They meet regulatory obligations every time and come with key-stroke auditability, removing any rework caused by human error.
• Seamless integration: Rapidly deploy your digital workers to interact seamlessly across multiple systems and platforms without incurring any incremental technical debt.

How does Automatic Reconciliation and Rebalancing Work?

Within a rapid 3-month deployment, your digital workers will ensure your clients have accurate visibility into the performance of their portfolio with the following steps:

 1. Data collection

SS&C Blue Prism collects details of the changes that need to be made from the portfolio management platform.

2. Allocation validation

The digital worker undertakes quality checks to ensure changes have been appropriately authorized and notifies the appropriate team member(s) if approvals are missing.

3. Platform reconciliation

Once the digital worker has confirmed the changes are fully authorized, it logs in to the fund administration platforms. It then carries out a set of validation checks to ensure the information on the current positions matches those in the portfolio management platform.

4. Discrepancy management 

If there are any discrepancies, the digital worker can either resolve these directly or escalate to a human if intervention is required.

5. Position reconciliation

With confirmation that the data is correct, the digital worker updates each fund administration platform with the required changes to each model. It ensures all trades are carried out exactly as instructed and balances every portfolio rapidly.

6. Audit trail

The digital worker collects evidence of the work it has carried out, including history logs and screenshots. This provides the discretionary fund manager with an audit trail to validate and confirm all changes have been carried out effectively.

7. Completion notification

The digital worker then provides an update to the fund manager and their team to confirm all updates have been completed successfully. Now, the client can be assured their investment in the fund is performing as well as possible and that it reflects the current state of the market.

For more information on how SS&C Blue Prism can help you reduce the operational and financial impacts on your team, reconcile portfolios and eliminate risk, get in touch today.