Pressure from regulators and investors on asset-management companies to improve the transparency of their reporting will only increase, says Peter Hertel, an executive at financial software company Sim Corp.
“There is pressure to provide information to investors as if they have invested directly,” says Hertel.
Many investors, including Australian superannuation funds, invest in pooled groups of funds to enable access to prominent asset managers while lowering average costs.
Reporting on the details of such pooled-fund transactions is costly, yet regulators and investors are demanding it particularly because investment gains have proved elusive.
Hertel says US regulatory demands will pressure funds globally to improve their transparency.
“US tax laws aimed at taxing US citizens on their investment gains will affect investors globally as funds will have to provide more detailed reporting in order not to be taxed,” he says.
This may force asset managers to bolster their automated processes, says Hertel.
“Once automation is up and running, you can increase your client base,” he says.