Increasingly, wealth management businesses are turning to managed services to deliver their administration software and underlying IT infrastructure. The managed services model sees the day-to-day management of an administration system outsourced to a specialist software vendor, leaving businesses free to focus on their strengths.

In the past, IT solutions in wealth management typically evolved very slowly, with most businesses undertaking a big, expensive system implementation, then ‘sweating the asset’ over five to 10 years before embarking on another painful and expensive upgrade. This model won’t necessarily work in today’s fast-paced, dynamic business environment.

Comprehensive next generation wealth administration platforms that support business needs across multiple business line – superannuation, investments, life and wrap, are now available in the market. These applications offer scalability, flexibility and functionality, enabling them to evolve with your business needs.

In the current marketplace, there are three common patterns of adopting the new wealth administration platforms. Some organisations choose to take the software application in-house, deploy it on their own infrastructure and manage it much as they do their other software solutions.

Others adopt a stepped approach – initially adopting the software solution in-house and gaining confidence in the next generation technology before making the transition to a cloud-based managed service delivery model.

Some wealth management businesses are choosing to take the software application as a fully hosted managed service, right from the get go. Under this complete solution, a specialist IT vendor manages the software – including implementation, administration, maintenance, development, compliance and data management – as well as the underlying IT infrastructure that supports it via the cloud.

A fully hosted managed service solution differs from traditional IT outsourcing in a number of ways. Sure it’s underpinned by technology, but it’s not really a technology outsourcing proposition. Rather, it’s a business solution that focuses on enabling business value with respect to continuous regulatory compliance and affordable, predictable performance.

When opting for the managed services model, businesses should seek out software vendors with demonstrated experience in delivering software as a fully hosted managed service. Look for companies with deep expertise not only in the software and managed service delivery, but also the industry and the region. Due to the highly regulated nature of wealth management, it’s prudent to check whether a managed services provider enlists local infrastructure partners. Having your data hosted onshore in your local jurisdiction will help ensure data sovereignty and regulatory compliance.

Managed services enable wealth management organisations to focus on managing their business, leaving IT management to expert suppliers. They can assist your businesses to reduce risk, achieve economies of scale and leverage greater value from your IT spend.

At the very heart of managed services, lies the ability to continuously deliver access to innovation as it becomes available, ensuring you’re always up-to-date, you’re always on the current release, and you’re always enabling true competitive advantage.

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David Hughes

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