Delegating key business operations to third-party providers such as custodians, administrators, distributors and transfer agents is certainly not new to asset managers. It is a traditional investment management business model which has been refined over the years with increasing third-party interaction.
But recently, the scope and dimension of outsourcing services have evolved and new third-party providers have emerged from unexpected providers, many with long track records of service. At the same time, many asset managers have begun to move beyond traditional sourcing models to gain competitive advantage, fill product or capability gaps and enhance underlying shareholder or partner value. This is creating sea changes across the industry as relationships, roles and related risks that must be considered are transformed.