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Thorough due diligence critical to achieving investor confidence, reveals new Advent survey

Wednesday, April 21, 2010
Opalesque Industry Update - 64% of Investment Professionals Report an Increase in Recent Investor Inquiries; 48% Believe Demonstrating Thorough and Consistent Due Diligence Would Most Improve Confidence

Advent Software, the leading provider of software and services for the global investment management industry, today announced the results of its survey that show asset management firms believe exhibiting better discipline and having a greater focus on due diligence are major drivers in regaining investor confidence.

After the scandals and financial crisis on Wall Street in recent years, investors are refusing to be complacent. The survey, which polled 360 investment professionals, found:

- 82% of Directors of Research report an increase in investor inquiries over the last 12 months;
- 48% of the respondents believe that demonstrating exhaustive due diligence is the best way to improve investor confidence; whereas only
- 33% believe better, more frequent, detailed reporting would boost confidence

At the same time, firms are increasingly overloaded by managing the influx of information and research flowing into their offices. According to the results:

- 68% of respondents feel they are overloaded by the volume of information they deal with;
- 66% of respondents spend more than an hour searching through their email inboxes daily; and
- 86% of respondents require multiple systems to acquire research needed to support investment decisions

Tower Group Senior Research Director, Dushyant Shahrawat, commented, “A robust due diligence process would be key to restoring investor confidence. After the recent financial meltdown, investment managers must adopt best practices laid out by the CFA Institute and regulators around research management, which includes having a demonstrable research process that withstands client and regulatory scrutiny. Tower Group believes such efforts may involve implementing research management systems that will boost investor confidence, create greater efficiency in research, and positively impact investment performance.”

Using a research management system, such as Advent’s Tamale RMS®, is a powerful tool for any type of investment institution that needs to bolster its operational processes to support due diligence best practices, while saving time and money.

“The results from this survey show that although the market may have rebounded, investors are demanding even more information to make sure that investment decisions come from sound research,” said Mark Rice, General Manager of Tamale at Advent. “Investment professionals are starting to understand that efficiently managing your research will be a key component of a firm’s competitive advantage.”


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