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Published on Hedgeweek here

Fri, 10/16/2015

Data analytics and advisory company Convergence has launched its ‘Best Fit’ service for advisers allowing users to identify service providers who are most closely aligned with the operating complexity of their business model.

Convergence has identified 31 unique operating complexity factors that will help focus the choice of service provider based on data driven metrics.

Advisers can use Best Fit to streamline their service provider sourcing and RFP process by focusing on the most appropriate ‘short list’ of service providers based on the complexity factors that are most important to them. Best Fit can be used to create the right alignment upfront in the RFP process and monitors changes to the client base serviced by current service providers.

“Best Fit is an excellent tool for advisers to efficiently look at the service provider marketplace,” says John Phinney (pictured), Co-President, Convergence.

“Empirical data will define firms that should be partnering,” adds George Evans, Co-President, Convergence.

Best Fit analysis gives the adviser the following six views to ensure optimal alignment:

  • Service provider complexity view – The min, mean, mid and max complexity scores across the Service Provider’s entire client base
  • adviser Client Complexity Distribution – A distribution of complexity scores grouped into complexity score bands
  • adviser Client List and Complexity Scores – A Service Providers client list with their total and complexity score comprised of relevant complexity factors
  • Service Provider Market Share Analysis – Market Share using criteria selected including Fund Type and Primary Investment Strategy
  • Service Provider Internal Business Concentration Analysis – The distribution of the Service Providers book of business broken down by Fund Types and/or Strategies supported
  • Service Provider Client Concentrations Analysis – The percentage of the Service Providers business the adviser will represent.

Complexity is defined by the way advisers operate their business. Convergence assigns simple unweighted values to each part of the adviser’s business model that creates complexity, which creates additional work, additional cost and additional operating risk within an adviser. In essence, a Complexity score by adviser. That is then matched with the Service Providers current book of business.

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