Backstop Solutions and Mercer survey highlights how new industry and market pressures are exacerbating productivity pain points
CHICAGO, IL, November 1, 2022 – Allocators report an average workweek of 50 hours, up from 44 in 2020, but their time spent on non-core, non-value-adding tasks is hampering productivity, according to new research from Backstop Solutions, the industry’s leading cloud-based productivity suite for institutional and alternative investors, and Mercer, a global leader in redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being.
The study is a follow up from Backstop’s 2020 report seeking to understand how much time allocators are spending on core investment tasks versus tasks they would consider either non-core, but still value-adding or tasks they would consider non-core and non-value-adding (in other words, a waste of time).
Backstop Solutions and Mercer’s 2022 Institutional Investor Productivity Study found that:
- Allocators are losing time on non-core tasks. According to their own assessments of how allocators categorize their tasks, they’re spending 13% of their time each week on non-core, non-value adding tasks, down from 18% from 2020. Yet this still means they are spending almost a day each week (6.5 hours) on “waste of time” tasks. There is not broad agreement, however, on how important certain tasks are. Different levels of seniority view the importance of tasks differently.
- Allocators are still bogged down by manual tasks. The most frustrating tasks that caused them to think, “there must be a better way” revolved around searching for documents on shared drives.
- Allocators operate with a lack of integration in internal and external systems. Their internal and external systems (including custodians, fund administrators, etc.) are more manual than integrated, causing them to spend time manually putting data from one system into another.
- Allocators do not use external investment manager research providers, leading them to spend almost 50% of their manager meetings reviewing facts about the manager or going through a series of templated questions, versus gleaning market insight and commentary.
- Allocators’ greatest challenge is hiring and retaining talent. More than 40% of respondents cite this to be their greatest challenge over the next 12 months against the backdrop of the Great Resignation, which highlights even more the importance of preserving institutional knowledge so it does not walk out the door with their staff.
- Allocators’ focus has shifted proportionally to more meetings with existing managers (9 hours a week from 5 hours a week in 2020). Comparatively, they spend 6 hours a week with new managers, up from 4 hours a week in 2020. The phenomenon of managers coming back more quickly to ask their allocators for “re-ups” may be driving this outcome of allocators spending proportionally more time with existing managers.
“Our hope is that allocator investment teams will sit down with the study to discuss whether the results resonate for them,” said Maryling Yu, Chief Marketing Officer of Backstop Solutions. “What are they actually spending time doing, and what do they think they should be spending time doing? Once they identify what they want to be working on, and what the highest purpose of their time is, they can get to work clearing space for what’s important. Integrating and automating the flow of information can free allocators to do more critical thinking and decision-making.”
Commissioned by Backstop and Mercer, the study surveyed 100 asset allocators from June 27, 2022 to August 15, 2022, representing a diverse range of organization types, job levels, and age groups. Most respondents worked in public pensions, endowments and foundations, and family offices.
Read the full results of the 2022 Institutional Investor Productivity Study here.
About Backstop Solutions Group, LLC
Backstop’s mission is to help professionals in the institutional investment industry use time to its fullest potential. We develop technology to simplify and streamline otherwise time- consuming tasks and processes, enabling our clients to quickly and easily access, share, and manage the knowledge that is critical to their day-to-day business success. Backstop provides its industry-leading cloud-based productivity suite to investment consultants, pensions, funds of funds, family offices, endowments, foundations, private equity, hedge funds, and real estate investment firms. For more information, please visit www.BackstopSolutions.com.
About Mercer
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 86,000 colleagues and annual revenue of over $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.com. Follow Mercer on LinkedIn and Twitter.
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Malea Lydon
BackBay Communications
PR@backstopsolutions.com
