This guide outlines the key considerations when comparing the best investment portfolio management tools. Our goal with it, is to give you the information you need to evaluate prospective solutions.
At Limina, we have been clients (investment managers) and know that transparent advice is hard to come by. We appreciate that we might or might not be the best investment portfolio management software for you. In either case, we want you to choose the right system for your specific needs.
If you prefer to watch instead of reading, our founder and CEO, Kristoffer Fürst, walk you through everything you need to know in the video below (if you prefer to read, scroll past the video).
Before you embark on a selection process, we recommend you pause and consider your ideal solution. What type of software for investment portfolio management is the best fit for you? We use the term here to broadly span “investment management”, i.e. any function capabilities an investment manager needs for their entire investment process.
The illustration below shows the functions an investment portfolio platform could cover, divided into front, middle and back offices. Then, 5 different operating models are illustrated, from a front-to-back system setup to the left to a best-of-breed approach to the right – where portfolio management software (PMS) is a separate system.
Different types of systems can vary dramatically in price. We’ve created a separate guide that walks through cost ranges for investment portfolio management systems.
Beyond covering functional areas, investment portfolio management software can have additional capabilities to help your team perform workflows more efficiently (faster) and cost-effectively. We cover 5 such capabilities here:
The best investment management software can support any type of portfolio view. All transactions go through a lifecycle: market orders, alternative investments or cash transactions. With a state filter, you can view any portfolio in any state. Only two solutions in the market currently support this (Limina is one).
When planning a portfolio rebalancing, an interactive cash ladder that shows T+1, T+2, and other settlement timings is crucial. For more advanced use cases (including passive portfolios and fund of funds), it’s possible to project exposures into the future (not just cash).
Even a broad front-to-back investment portfolio platform must connect to other systems and providers. The most common approach is with managed integrations, i.e. when the software supplier builds and maintains connections on your behalf.
This approach works well for standard integrations like trading and market data connections. For most other integrations, such as connecting to fund administrator and custody, the managed connectivity approach has challenges:
A better approach is a user-configurable import/export application. An import/export app allows users to configure new integrations in 3-5 minutes. It’s free of charge, eliminates the wait time and will enable you to connect to any source (in and out) instantly.
For more tips and tricks, follow our founder and CEO, Kristoffer Fürst, on LinkedIn.
Beyond the global leaders of investment portfolio management software, there are choices that are more popular in certain regions of the world:
Regardless of region, the global trend from Canada, through Europe, to APAC, is clear: towards all-in-one investment management platforms that cover workflows from the front office all the way to, and through, operations. Clients prefer solutions built with a single source of truth (one database, not a patchwork of systems/acquisitions) which is why providers like Limina are seeing success.
An aspect we haven’t touched upon, which is essential, is to ensure any portfolio investment management software you work with supports the asset classes you need. Whether you’re trading equities, fixed income, funds, derivatives, alternatives, etc, your system must support them.
Finally, to recap what we’ve covered in this article: