Building out integrated portfolio management and trading operations for an enterprise firm requires a different approach than what might work for a small- or medium-sized business. Workflows that are sufficient for managing investments and executing trades in a narrow ecosystem can quickly become unwieldy when amplified at an enterprise level.
Whether your firm is seeing double-digit growth rates, or your legacy systems aren’t cutting it, delaying technology upgrades could have significant consequences. Here are key considerations for enterprise RIAs and broker-dealers selecting integrated portfolio management and trading capabilities.
More Seats Shouldn’t Mean More Problems
When seat counts reach triple digits, the difference between systems built for enterprise-scale and those that are “good enough” becomes apparent. This is especially true when managing multiple portfolio managers, traders, and investment strategies simultaneously. Software built for firms with a handful of portfolio managers and traders might have inconvenient but workable processes. Small frictions – like manual reconciliation between portfolio management and trading systems, or slow APIs – might be manageable for smaller firms. But when these friction points are magnified across a large, complex operation managing billions in assets, they become untenable.Key Scalability Features to Look For:
Portfolio Management
- Multi-user performance: System maintains speed with 100+ concurrent users
- Bulk operations capability: Can handle mass rebalancing across thousands of accounts in minutes
- Data processing: Efficiently handles large data volumes for reporting and analysis
Trading
- Concurrent trading: Supports multiple traders executing simultaneously
- Order throughput: Maintains performance during high-volume trading periods
- Queue management: Efficiently handles large order queues without degradation
- Direct custodian and broker connectivity: Doesn’t rely on third parties to provide connectivity
Double-digit Growth Deserves Comparable Capabilities
Off-the-shelf solutions might suffice for firms growing with the market. But for firms scaling rapidly, integrated systems that can handle sophisticated portfolio management strategies while executing trades efficiently become paramount. Managing thousands of portfolios requires capabilities that showcase the diligence and differentiation provided by top-level investment managers.Growth Support Features to Evaluate:
Portfolio Management
- Strategy scalability: Handles multiple investment strategies, models, and asset classes
- Custom analytics: Provides flexible performance and risk analytics
- Tax management: Supports sophisticated tax-loss harvesting at scale
Trading
- Advanced order types: Supports complex trading strategies
- Cross-asset capabilities: Handles multiple asset classes efficiently
- Smart order routing: Optimizes execution across venues
Technology Should Be Lifting Your Investment Operations, Not Weighing Them Down
Both portfolio management and trading technology evolve rapidly. Providers that stop innovating or try to lock clients into closed ecosystems may signal their capabilities aren’t receiving needed enhancements. Legacy systems might work for smaller firms, but their inefficient workflows and lack of integration tend to constrain growth-focused firms.Technology Evolution Checklist
Portfolio Management:
- Regular updates: Consistent feature enhancements and improvements, along with a dedicated vendor service team to support implementation
- Open architecture: Flexible integration capabilities with other systems
- Modern infrastructure: Cloud-native or modern deployment options
Trading:
- API robustness: Well-documented, reliable APIs for integration
- Market connectivity: Modern connectivity to exchanges and venues
- Performance optimization: Regular latency and throughput improvements
- Deployment efficiency: Rapid implementation and testing against thousands of complex trading scenarios to verify performance in real-world conditions
Encouraging Teamwork
For enterprise firms, portfolio management and trading systems are central to operations, facilitating everything from client conversations to implementing investment strategies. Intuitive operations shepherded by top technology also helps enterprise firms attract and retain top talent, which is becoming increasingly crucial for firm growth and longevity as tenured advisors are retiring at a rapid rate. Success requires seamless coordination between portfolio managers and traders, efficient training and onboarding, and integration with various partners and technologies.Collaboration Features to Consider:
Portfolio Management:
- Workflow automation: Streamlined processes between teams
- Role-based access: Granular permission controls
- Communication tools: Integrated messaging and alerts
Trading:
- Order collaboration: Shared order blotter and trading tools
- Team oversight: Trading desk supervision capabilities
- Integration hub: Connects with risk, compliance, and other systems
