Why centralized account management is essential for asset management

Authored by FlexFunds
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  • Jorge Meyer de Pablo, director at Inversiones Security, provided insights into the significant advantages of centralized account management for asset management.
  • This analysis is primarily aimed at asset managers and investment advisors interested in understanding the benefits of centralized account management, one of the most important tools according to the II Annual Report of the Asset Securitization Sector 2024-2025, produced by FlexFunds in collaboration with Funds Society.
  • At FlexFunds, we issue investment vehicles (ETPs) designed to enhance liquidity in asset management. For more information, please contact our team of experts

The II Annual Report of the Asset Securitization Sector 2024-2025 outlines that centralized account management is one of the most critical tools for effective asset management.

This system allows client accounts to be managed from a single platform, which is essential for operational efficiency and control.

Advantages of centralized account management

Centralized account management is widely used in asset management for three main reasons:

  • Efficiency and economies of scale: reduces duplication of effort and minimizes manual errors.
  • Control: provides greater visibility and control over all accounts.
  • Simplification: streamlines the process of tracking and managing investments.

These benefits show that centralized account management is not just a matter of convenience but a deeper, strategic need.

Expert’s opinion

Jorge Meyer de Pablo, director of investments of AGF Security in Inversiones Security, believes that managing all client accounts from a single, centralized platform offers a holistic view of operations.

This, in turn, allows for the efficient handling of large volumes of information with much greater control.

This approach is crucial in minimizing operational risk, a factor that becomes increasingly critical as rebalancing processes, instrument allocation, and portfolio limit control become more sophisticated and demanding.

“In my experience, centralized management not only enables a smoother and more cohesive operation but also allows us to scale the business more effectively. Without a centralized structure, duplicated efforts, manual errors, and a lack of visibility over accounts can become insurmountable obstacles to growth,” stated Meyer de Pablo.

Nonetheless, despite the significant benefits of centralized account management for asset management, Meyer de Pablo indicated that implementing such a system also presents challenges, primarily due to initial costs and technological dependency.

Furthermore, with all data centralized in a single space, cybersecurity risks increase, as a single attack could compromise multiple accounts and access a larger amount of sensitive information.

However, the pros outweigh the cons, which is why Meyer de Pablo and other asset managers increasingly choose this management system.

“For us as asset managers, centralized account management is not just an option but an essential strategy to ensure efficiency, control, and, ultimately, the growth of our operations. It’s an investment in the future of our business and in the satisfaction and trust of our clients,” Meyer de Pablo concluded.

Beyond centralization

In addition to centralized accounts, the annual report highlighted that asset management specialists place high value on automated and/or outsourced Net Asset Value (NAV) calculation and reporting, the effective distribution of their investment strategy, and seamless investor onboarding.

In fact, the conclusion is that, while all these tools/needs are valuable for managers, the most important are:

  1. Centralized account management
  2. NAV calculation
  3. Improved strategy distribution
  4. Onboarding process
Table 3 Assessment of needs (1)
Figure 1:  Assessment needs

Thanks to the collected information, the report’s experts noted that an integrated strategy focused on automation and operational efficiency can significantly enhance client satisfaction in investment management.

“Companies that adopt these practices will be better positioned to attract and retain clients in an increasingly competitive market,” they added.

The II Annual Report of the Asset Securitization Sector 2024-2025 is available for free download.

For more information about the securitization process, which is critical for asset management, feel free to contact our team.

Disclaimer:

The purpose of content of the above article, blog, or post is only informational, and it is not intended to provide any sort of investment advice, as an offer of solicitation to buy, sell, or hold, or as recommendation, endorsement of any security, investment, fund and / or company. The content and information provided in the above article, blog, or post does not constitute financial, trading, or investment advice of any type. Neither FlexFunds ETP nor FlexFunds Ltd. is a U.S. registered broker-dealer, or an investment adviser registered with the U.S. Securities and Exchange Commission. Our entities do not raise capital for clients or the Issuers. We do not solicit any specific products, nor offer investment advice or make investment recommendations, nor do we offer tax, legal, financial advice or otherwise. Perform your own due diligence and consult a financial advisor prior to making any investment decision.

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