5 Key Take-Aways from Hardball with the AMF

On February 8th, The Asset Managers Forum sponsored a workshop entitled, "Hardball with the AMF." The Workshop, which was developed by AMF Steering Committee members Stephen Mellas of AQR Capital and Jean Ebbott of Morgan Stanley Investment Management, focused on how investment managers and custodians can better serve their clients. Below are 5 key take-aways:

1. There is a need to modernize the reconciliation process. Workshop participants discussed the possibility of doing "reverse reconciliations" by which asset managers would submit their positions to the custodian for reconciliation. This process may help to minimize month-end logjams and the errors that need to be researched at month-end.

2. Educating the client is an important part of client service. The question was raised whether an event for plan-sponsors might be hosted by asset managers and custodians.

3. With the proliferation of technology and the increasing sophistication of the client, the culture of relationship management has changed. Today, the relationship between asset manager and client is based on a strategic need in order to manage client expectations, especially in light of new asset classes such as derivatives.

4. Data is key. The audience agreed that it is important to agree on business practices, which will help to promote the use of standards. Furthermore, developing good business practices are more important than the method of connectivity.

5. The question was raised: "Who is in the better position to help drive the changes needed in the current support model: the investment manager, the custodian, or the client?" While compelling cases were made for all parties, the general consensus was that effective change will come about when the three partner together.

5 Key Take-Aways from the AMF Member Meeting

On February 9th, The Asset Managers Forum hosted a business meeting for its members. AMF Chair Jason Jesner facilitated the meeting. Below are 5 key take-aways.

1. John Gidman of Loomis Sayles and Chair of the Asset Management Group explained that the AMG will be building relationships with key industry constituencies and that the Group is seeking the engagement and participation of COOs and other senior executives at asset management firms.

2. The goal of the Corporate Actions Committee is to finalize its Best Practices paper after consideration of the comments received and to move toward implementation of its recommendations. Among its top goals is to bring standardization across the corporate actions lifecycle, especially with regard to corporate action announcements.

3. The STP Committee is working on having robust SSI and having metrics on SSI data. The Committee will continue to coordinate its efforts with ISITC, particularly in light a new ISTIC proposed message template. The Fails Working Group is focused on developing a standardize fail report, metrics and diagramming the process.

4. Hedge funds are demanding more downstream services from their prime brokers and as a result, traditional asset managers are increasingly using prime brokerage to meet their own business needs.

5. Frank DeMaria of Merrill Lynch and Janet Wynn of DTCC spoke about the Warehouse. Asset managers learned about the dealers' experience with backloading and how the Warehouse will provide efficiency in the audit process, in addition to operations.

The AMF would like to extend a special thanks to all speakers and panelists that participated in the two events. Additional information on the Workshop and Meeting may be obtained by contacting the staff.