Skip to main content

You’ve probably known for quite a while now that change is in the air; that your research analysts’ use of non-compliant or insecure consumer apps is increasingly incompatible with maintaining your fund’s compliance posture. Or that siloed information is hampering productivity, information sharing and effective reporting.

In our recent industry report with Greenwich Associates, Asset Managers and Allocators shared their investment research challenges and priorities, and revealed they were ready for switching to a more professional, structured research management system and process.
However, knowing when the time is right to make any change, and then making that change stick, isn’t always easy. It’s New Year after all. Whether it’s dry January, veganuary, a social-media detox or new gym-membership – it’s habit changing season, but how do you measure and ensure success?
Whether it’s a new exercise regime or a fund-wide research management process – experts will cite that successful change often boils down to a combination of three factors: 1. a trigger, 2. a real understanding of the benefits of routine change, and; 3. a viable reward.
According to the new Greenwich Associates data, institutional investors globally spend more than $6.5 billion per year on investment research and the typical manager utilizes over 25 different providers for research services and data. For larger firms that number can easily be double but most buy-side firms do not have a dedicated technology platform to manage and share research. In fact, only a quarter of investment managers participating in a recent study by Greenwich Associates use a formal research management system (RMS).
Half of respondents in the survey, stated they were not satisfied with their current research and data management set-up – many relying on legacy platforms over 5 years old or, remarkably, still struggling to aggregate data across shared drives, spreadsheets, email and a host of non-compliant siloed consumer IT hacks across Evernote, Dropbox and more.
If that sounds familiar, and you’re thinking about re-evaluating your research management technology approach, change management should be top of mind. So, we’ve created a checklist below to look at how the three critical change factors apply to your current research management process, and if it’s time you kicked the habit at your fund once and for all.

1. The Tipping Point

Something has to trigger the need or desire for change with the existing activity or habit.
It could be one thing, or a culmination of a number of small changes over time, but there is a growing recognition that the existing pattern of activity probably does more harm than good.
For consumer software or siloed systems in investment research management it’s often a combination of the following:
 The SEC’s broken windows policy and increased enforcement
 More thorough OCIE Cybersecurity Examinations
 Increased difficulty in tracking research process efficiency and/or increased amount of data silos
 Analyst frustration by time wasted searching for data in archived emails, personal notebooks and shared drives.
 More pressure from investors on due diligence and operational transparency

2. Recognize the real need for (and impact of) change

All of those set to feel the impact of a potential new approach, need to understand the real need for change and what that actually means for individual working processes. For a change to stick, you have to bring everyone with you. Which means everybody accepts the positive impact a routine change will have on their role.
For modern RMS, the impact will be felt most – and so needs to be communicated and thoroughly trialed – amongst creators, consumers, aggregators and reporters of research, including:
 Analysts, across teams
 CCO and Compliance teams
 Director of Research
 Portfolio managers

3. The Viable Alternative

The final step, and perhaps the most vital, is that the chosen alternative must offer at least a comparable experience or reward, if not a better one.
It’s the same with any habit change. If, for example, you eat fast food all day, you may decide to start eating healthier. But, if you’re choosing chocolate milkshakes to relieve stress or satisfy sugar cravings, trying to replace that ‘reward’ with celery sticks and water isn’t going to cut it alone.
If you’re moving to RMS from consumer tools in order to up your compliance posture, an alternative that offers a lesser user experience or reward than those apps, wont cut it; it won’t get adopted and will be counter-intuitive. For a new research management approach to stick, make sure it offers the same, or even more, user-led features and consumer-like experiences, such as:
 Mobile access on and offline
 Intuitive and Easy to Use
 Fits with existing fund workflows
 Integrates easily with critical tools
 Seamless updates
Take a look at our free eBook to learn more about how the rise of consumer technology and legacy software is impacting hedge fund research processes, the cybersecurity risks and compliance realities, and why some consumerization can also be good for your fund.