TAKING THE REINS

Conclusion: The PwC – CACEIS Assurance Model

After the emergence of our eight KPIs, and the integral role that they play in the satisfaction of institutional investors, PwC and CACEIS have formulated an Assurance Model which demonstrates the key factors asset managers must act upon to ensure a sustainable relationship and differentiation from the competition. Our Assurance Model has distilled the KPIs into four key areas which asset managers must focus on to sustain a satisfactory relationship. The four key action areas are as follows:

Each action area contains recommendations for asset managers so that they can adapt their operations to attend to the key issues facing them.

Get the fundamentals right

First of all, assetmanagers need to understand the fundamentals and use them to their advantage. The fundamentals of business success are:

Governance

A stronger governance framework including independent verification of controls and procedures will reduce the opacity of an asset manager’s operations and help build trust with institutional investors who wish tomaintain strict governance requirements and a more comprehensive knowledge of how their assets are being dealt with.

Table 2

KPIs and key action areas

Key action areas

KPIs

Governance

Independent verification of controls and procedures of asset managers

“Skip asset gathering and partner with us.” Recommendation from a Swiss pension fund

Operational strength Operational strength (IT/People/Process) Expertise Quality of advice

Operational strength

Risk-based performance Performance over fees Fees

Operational strength could be said to be the backbone of an asset manager and essential to the maintenance and improvement of their abilities. Strong operational teams and abilities are the enablers of change and the core of the asset manager.

Transparency

Risk transparency Quality of reporting

Source: PwC-CACEIS survey 2012

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