Citywire: Helping Hands

Citywire Article published June, 2018

With ever-increasing regulatory hurdles and technological requirements, almost all independent asset managers now use outsourcing partners to help shoulder the burden. We quizzed four independents on which parts of the business they outsource, and how to select the right partners.

Peter Hottinger - Pilotage Private Wealth AG

The ultimate objective of outsourcing is to reduce operational expenses and to use those savings to help make better use of working capital or even improve profitability, while also increasing operational gearing and optimizing human capital.

When considering whether outsourcing is an option, a key question management must answer is where does the organization struggle and where are business operations exposed to risk?

An evaluation of day-to-day operational processes, combined with the size of the organization, will answer this question and can help in the decision-making process. This has been our approach.

• IT: A key element to consider is whether the business has the ability to manage its own IT infrastructure in a secure and compliant manner. IT systems should automate as many day-to-day tasks as possible. Depending on the business needs and regulatory obligations, IT is key to the successful management of any company. Ensuring the system is managed professionally is critical, otherwise the company can be exposed to considerable risk.

• Accounting: The options to be considered are having an in-house accountant (part time or full time) versus an outsourced accountant. However, regardless of whether or not this is outsourced, all companies should have in-house cash flow analysis with at least a 12-month forward projection.

• Compliance: With recent regulations taking effect, compliance has become key to protecting the company, employees and risks associated with the management of the business. If you were to outsource, are your key controls really at their full potential? It is recommended that having an in-house compliance officer is a must for any company operating in the financial services industry.

Pilotage has decided to keep compliance and other key controls in-house. Therefore, by partnering with a reputable accounting firm, auditors and solid IT providers, Pilotage ensures business continuity and mitigates operational risk.

Credits

This article was written by Peter Hottinger, COO of Pilotage Private Wealth, and was originally published in the June 2019 issue of the Citywire Switzerland. Click here for the article.