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Advent Users Group Survey Finds Cautious Optimism Among Asset Management Firms as Revenue Grows by 16%Growth Fueled by Evolving Asset Allocation Models and Portfolio Diversification Creates Opportunities for Investment Management Professionals (October 31, 2011)
SAN FRANCISCO, CA -- (Marketwire) -- 10/31/11 -- Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services for the global investment management industry, announced today the results of the independent Advent Users Group (AUG) annual Asset Management Operations and Compensation Survey. Co-sponsored by the Investment Adviser Association (IAA) and Advent Software, the 2011 study found that asset management firms benefitted from market growth and recovering fund flows, which contributed to a 16 percent year-over-year revenue growth and a rise in compensation for investment management executives and professionals. Furthermore, despite the uncertain economy, profit margins were up from the previous year, fueled largely by cost-cutting measures initiated in response to the financial crisis.
"The AUG survey offers invaluable insights into the trends shaping the asset management industry. Listening to our clients and understanding their needs is critical in our effort to develop new technology solutions that offer competitive advantage and support our clients' growth," said Anthony Sperling, senior vice president and general manager, Asset Management Group, Advent. "This year's survey results underscore the importance of technology solutions to support operational efficiency and help clients focus on what matters most to them -- the ability to adapt to market conditions and deliver great results for their clients."
Focus on Client Service, Diversification of Investment Products and Social Media Top of Mind
The survey found that across the asset management industry, managers continued to diversify the types of products they manage for clients.
Spending on investment operations rose at a steady pace, while profit margins increased. In an effort to remain focused on client services, an increasing number of firms are delegating operations and support functions to third parties in order to achieve cost benefits and scale, gain access to additional resources and expertise, and address regulatory requirements.
Key survey findings include:
- Firms experienced a 16% year-over-year increase in revenue, and assets climbed in tandem.
- Spending on investment operations rose 16.7% between 2009 and 2010, ranging from an average of $126,000 among smaller firms to over $2.4 million among the largest firms.
- Spending on investment operations is expected to grow by 16% in 2011.
- A growing number of firms are using research management systems developed by external vendors.
- Trading volume increased significantly from 2009 to 2010, with the average number of trades per month growing from 1,700 to 2,500.
Overall Growth in Compensation With More Equity Across Firms
For investment management industry professionals, overall compensation rose during the last year, with senior executives and investment professionals receiving higher pay. Despite the fact that most professionals received larger bonuses than the previous year, fewer big earners meant lower top quartile numbers and a contracted compensation range.
Additional findings include:
- 40% of firms are now using absolute and relative performance to award bonuses.
- Median total compensation for CEOs and Presidents rose 28% from the previous year.
- More than 80% of investment professionals reported higher earnings than the previous year.
- Most investment operations personnel had higher earnings year-over-year and 50% of compliance professions saw compensation rise in 2010.
- Compensation gains were the least consistent among marketing, sales, and client service professionals.
"Industry benchmarks and an understanding of best practices are critical in helping firms effectively gauge their success and accurately plan for future growth," said Erin Kestner, director of development, Advent Users Group. "The findings provide the most comprehensive industry metrics to help professionals at all levels better understand and prioritize strategic initiatives for their firms."
To download a copy of the survey's selected highlights, click here.
Advent Software, Inc., a global firm, has provided trusted solutions to the world's financial professionals since 1983. Firms in more than 60 countries count on Advent technology to run their mission-critical operations. Advent's quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling operational risks and costs. Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support and services organization. For more information on Advent products visit http://www.advent.com/about/resources/demos/pr.
Advent, the Advent logo and Advent Software are registered trademarks of Advent Software, Inc. All other company names or marks mentioned herein are those of their respective owners.
Advent Users Group (AUG) is an independent organization formed in 1998 by a group of investment professionals using Advent products. The group saw the benefits that a user group could have in sharing information and providing valuable feedback to Advent Software. Advent embraced the idea and now benefits from the collaborative working relationship with the independent group, which now boasts over 340 member firms. AUG's ongoing mission is to bring together a diverse group of investment advisors who utilize Advent products to share knowledge, define challenges, and advocate for a coherent vision of future technological solutions.
Advent Software, Inc.
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