How to choose analytics software for asset managers: questions, data and traps

Most buying decisions for analytics start from a feature list. For asset managers the better start is the questions that come back every month, the files already on hand, and the traps that make a tool look right in a demonstration and wrong in the first board meeting.

Start from the questions

Any tool you consider should answer these from your data, not from a sample. Ask to see it.

The data you already hold

• Transfer agency or platform flow file
• Flow file
• Asset file
• Market flow data or stated allocation
• CRM activity
• Fee schedule
• Ratings log

If a vendor needs a warehouse built before it can read these, count that in the cost and the time.

Ten questions to ask any vendor

1. What does it need in place before the first answer? A warehouse, a data model, a modelling language, a partner? Ask for the list and the typical weeks.
2. Who does the setup, and who maintains it? Your team, the vendor, or a partner, and what that costs after year one.
3. Does the AI calculate figures, or choose from computed ones? A language model that writes queries or code can produce a plausible wrong number. Ask what it is allowed to do.
4. Does every total reconcile to a control figure? Ask to see a bridge that does not sum and what the product does about it.
5. Can every figure be opened to its rows? An answer nobody can check becomes a debate in the meeting.
6. What does it cost in the first year, all in? Licences, consumption, implementation, modelling and training, not only the seat price.
7. How does data arrive, and who holds credentials? A file your systems already export, a scheduled drop, or a live connection with the vendor holding keys.
8. What happens to the data, and where is it stored? Residency, retention, deletion, and whether names can be replaced with identifiers.
9. Can we see it on our own data before we sign? A demonstration on a sample dataset tells you little about your own.
10. What does the tool do when it cannot answer? It should say so. A confident guess does more harm than no answer.

Checks specific to asset managers

Ask whether the tool enforces these, and what it does when they fail:

• Flows: Opening assets + gross sales − redemptions + market movement = closing assets
• Channel share: Channel flows sum to strategy flows; strategy flows sum to the firm total
• Coverage: Intermediaries = covered + uncovered; each in one tier
• Concentration: Intermediary flows sum to the flow file total

The traps

Gross flows split from net. Net flow is the headline everywhere, and it hides both the clients rotating out and the ones quietly leaving.

The turn before the fall. Assets are near a high and the dashboard is green. The three-month flow went negative two months ago. That is the call list.

Fee yield on flows. Sales are up and revenue per asset is down, because the flows went into the institutional share class.

Measures to leave out

Assets under management as a sales measure. It moves with markets. Flows are what distribution controls.

Meetings held. Count without direction. Replace with coverage at cadence, by assets.

Net flows alone. Always beside gross sales and redemptions.

A scorecard

Where Covirage fits

Covirage reads the exports above, answers the questions with figures our tools compute and check, and is set up for you within a week. See analytics software for asset managers compared, AI analytics for asset managers and Covirage for Asset managers.

For the measures in full, with formulas and exports, read Distribution KPIs for asset managers.