Institutional Investor recently spoke with Lisa Jacobs, Head of Product Management – intelliflo redblack at intelliflo. intelliflo is the global financial advice technology division of Invesco. We discussed how wealth managers and asset management firms implement new investment platforms such as intelliflo redblack, intelliflo’s award-winning rebalancing, trading, and order management solution.
Here are the highlights of our conversation, edited for clarity.
Q: What advice do you have for wealth managers and asset management firms as they prepare to adopt a new investment management platform?
A: It varies based on how each firm functions, and most firms are unique in some respects. In my experience, it comes down to two things: clean data and change management.
On the data side, it’s essential to ensure the data that will be used in the new platform is clean. This typically includes anything from removing closed or inactive accounts that may be sitting in your system to fixing mismatched asset classifications, archived versus active models, and similar data cleanup tasks.
On the change management side, it comes down to investing time to engage with the system’s stakeholders as well as power users within your firm. The closer the alignment among the decision makers and primary users that will manage the work on the platform, the easier the transition. With this in mind, it’s wise to make sure that the power users buy into the new system and its functionality and have some level of ownership in the decision-making process.
Q: Who should participate in the design, customization, testing and so on of this new platform? What role should investment professionals and so-called power users play?
A: Our implementations of intelliflo redblack are quite bespoke, largely because our customers are each set up differently, and we like to make sure at least one representative from each area of the business who will use intelliflo redblack is participating from the start.
We like to involve the decision makers as the kickoff and implementation begin. But at the end of the day, the most important group is composed of the power users and the managers who will set the tone for the implementation and empower their teams to use the new platform.
We recommend having at least one representative from each area of the business as part of the team. That is, somebody from the front office who’s managing the data coming in and also power users from each area of business who understand upfront how things are set up now and how they’re going to run in the future. And then you have your centralized trainers, traders, and staff members from operations.
It’s also important to have an executive decision maker who serves as a tiebreaker if there’s any uncertainty about setting up firmwide business rules.
Q: How does intelliflo guide new customers as they roll out this platform?
A: We at intelliflo assign a project team for your implementation, who works closely with a project leader from the customer. And across all aspects of the project, you’re going to have a dedicated integration engineer or data manager who’s helping you with, for example, the initial data import piece as well as any connectivity for the trading side. There’s also a main trainer and usually his or her backup, who’s on hand as you go through each step.
We offer a very modular training structure that provides customers with a dedicated training team. And there are various forms of documentation and a knowledge base of how the data flows and the system works to supplement the training, because as the firm you are responsible for making sure your application is set up the way you want with the rules that are needed to run your business.
We like to make sure that the application is set up as we train. For example, you’re going to first have data flowing in, and your trainer’s going to teach you how to use that data. Then we’ll set up different business rules and exceptions, like models, restrictions, and equivalents that are so important for portfolio management. All things considered, we provide thorough training, as well as lots of ad-hoc support for our customers as they get there systems up and running.
Q: How do users learn how to use intelliflo redblack with confidence?
A: Once the system is set up, it’s really a matter of practice, just like, say, playing the piano.
We try to ensure our customers spend time upfront to set up the application and workflow to ensure its going to do what you need it to do. Then it’s a matter of practicing and testing – for example, testing your workflows in parallel with the old methods and processes with the new ones.
Ultimately, becoming an expert user in anything requires practice.
Q: How do customer firms take advantage of usage data and put it to good use and understand more about their business practices and refine their processes?
A: The good news is this: at the end of the day, intelliflo redblack’s data sets and APIs will capture and provide all this usage data, and we want our customers to be able to put their data wherever they need it, whether it be Tableau for analysis and visualization or another analytical system.
There are a great many data points that users can pull out, and we want our customers to have the flexibility to do this at scale, the way that they need to. In most cases, they’re able to do this sort of analysis on a daily basis if they want to. The order archive becomes the single source of truth for their trading activity as well as the audit trail, which is very important for compliance purposes.
Q: What positive surprises have users found from using intelliflo redblack that they didn’t necessarily anticipate?
A: The most positive surprises I’ve seen are cases when a firm thinks that it’s going to put only a portion of its business or investments in intelliflo redblack. That is, their implementation is set up and designed to handle one distinct process. But once they get started and see the deep level of functionality, they realize they can, say, manage mutual fund portfolios, or capital gains budgets for tax-sensitive customers as well.
We made one small change within our global trading actions to allow a single action to happen and we had one customer that brought on an additional $4 billion in assets onto the platform because of it. So, we work with customers as we’re looking at their book and that’s typically where we see the big surprises like these I’ve mentioned. They don’t anticipate intelliflo redblack to be as scalable as it actually is. And once they get there, they put the rest of their book on the platform.
Q: How do customers go about measuring their return on this sort of technology investment? What kind of improvement do they hope to see?
A: The biggest return our intelliflo redblack customers seek is time. Our advisory customers, their teams, and portfolio managers can spend less time on making changes after shifting a strategy decision because redblack can scale investment changes across a great many portfolios or accounts. We often see that our customers are getting their time back, which frees them do other things to run their businesses efficiently and profitably.
The other big return I see is the decrease in compliance mistakes, which are very, very costly. So when you compare compliance misses – from catching a pre-trade error to a post-trade error – intelliflo redblack has checks built into the application, which makes compliance teams really happy because fewer trade corrections mean fewer mistakes made along the way. And if you program the application the way it’s intended, it really does give back investment professionals’ time and reduce compliance errors.
To get the full value out of this sort of investment, it comes down to doing your homework. You do your RFPs. You compare your current system with where you want to go and look closely at one or more technology solutions. By doing this, you’ll understand how you’re going to navigate this project and the technology and features you needs.
The other big piece required to realize the value of this sort of investment is making sure your firm is ready to embrace the change that comes with a new technology platform. If you’re implementing new technology, you are going to have to work through that process and make sure you understand the value and business rationale of the change you’re making.
Interested in intelliflo redblack? Book time with them to learn more.
