We helped an Asset Management boutique, which decided to expand its business model, adding the provision of advisory services and portfolio management services not only to its direct clients but also to Independent Advisors, having a similar business purpose, in the name of their direct clients.The move is part of a larger strategy update, in view of the important changes that the new Regulations Financial Services Act (FinSA) and Financial Institutions Act (FinIA) entering into force in 2020 are going to introduce in the Industry for all its members.
Targeted Independent Advisors are those who lack of the minimum organizational capabilities and of an adequate IT and operating platform, especially in view of the new regulatory requirements that will increase dramatically the obligations in terms of controls, risk management, compliance and investor protection.
Based on our documented experience in Outsourcing Services and especially on our deep knowledge of how to develop outsourcing agreements, we have been mandated by our client to build a contractual framework supporting the provision of the mentioned services in partial outsourcing.
The requested deliverable was a package of documents, setting the Services description, the expected service levels, the terms and conditions.
In a second phase we have been also asked by the Client to assess their IT platform currently in use, make a comparison with a second IT platform potentially available and identify Strengths and Weaknesses of both, proposing the best possible IT solution as platform adopted for the services provision (one of the two or a combination of both, opportunistically integrated).
As a first step we have assessed the Client internal processes, its IT applications, its organization, in order to draw the reference operating platform.
Once acquired all the information needed to design the contractual framework, we have finalized the Outsourcing agreement package in two months, respecting the deadline assigned.
The package included not only the Legal Terms and Conditions, the services description and the service levels and key performance indicators, but also the Security requirements to be fulfilled and a review of the GDPR obligations for both contractual parties.
We have in addition supported the Client in the design of the most appropriate Service pricing.
Regarding the assessment of the IT solutions, we have formulated our evaluation in terms of:
• better functional coverage, including in our analysis also the forthcoming changes inducted by the new Regulations,
• better adherence to the technological evolutions, including DLT and Blockchain,
• Total Cost of Ownership, in a 3 to 5 years business plan,
recommending our preferred solution.