Exploring margin sourcing: An interview with Revel Wood, founding partner of ONE group solutions, and Thomas Desombere, head of business development at RiskConcile.
Q1: What is Margin Sourcing, and how does it work?
Revel Wood: Margin sourcing is where an asset or wealth manager forms strategic partnerships with specialist solutions providers to improve margin and reduce costs through the outsourcing of marginal, non-value-adding activities.
This approach ensures managers focus their limited resources on core regulatory, strategic and value-enhancing activity, which will ultimately improve margin and their clients’ experience. ONE group solutions and RiskConcile combine best in class governance and technology solutions to provide cost effective, streamlined and enhanced governance and control, allowing managers to focus their resources on areas such as product development, risk management, portfolio management and distribution—i.e., their core business.
This unique combination of solutions, developed through our strategic partnership combines three decades of Asset & Wealth Management expertise with leading-edge technology and data science. Providing managers with in-house Management Companies, AIFM or Authorised Corporate Director functions with the ability to increase operational efficiency and ultimately improve margin. Margin sourcing is the next generation of outsourcing, moving further up the value chain and allowing managers and administrators to focus on their core activities.
Thomas Desombere: Exactly. We approach each conversation by first getting to understand the specific challenges, frictions, and areas of inefficiency that the client is facing, with a particular focus on marginal activities that are not adding value to their core business goals. Often we uncover cost saving and operational enhancements, purely because these activities are not considered core and have thus suffered from under-investment or a lack of focus, resulting in processes or technology having been patched up many times to keep the wheels turning, rather than dealing with the underlying issue. These conversations enable us to better propose ways in which processes can be streamlined, and how the client can digitalise manual intensive tasks.
Through working in an agile way with the client, combining operational and technical expertise, we are able to deliver quick wins and immediate results tailored to clients’ specific needs and operating model.
Q2: How does margin sourcing improve results and operations for fund managers?
Revel Wood: Asset and Wealth Managers are under constant pressure to deliver positive outcomes, while also coming under increasing scrutiny from regulators and investors. Margin sourcing addresses operational inefficiencies and streamlines processes that might be sapping valuable time and resources, which is preventing the manager from being able to allocate appropriate resources to these key challenges. By improving efficiency in areas such as distribution support, corporate governance, compliance, vendor management, data management and regulatory reporting, we help clients focus on what they do best. The result is a more efficient operating model that directly contributes to improving team performance, reducing cost and ultimately improving margin.
Thomas Desombere: And it’s not just about creating efficiencies, it’s also about relieving senior, experienced employees from non-core tasks. When senior managers are freed from time-consuming administrative tasks such as data capture, data validation and endless spreadsheet maintenance, they can dedicate their skills to more strategic activities. This approach helps improve employee engagement and reduces burnout — a significant issue in the industry today due to relentless cost and regulatory pressure.
Q3: Can you describe the process that you follow when you first engage with a client?
Thomas Desombere: We normally kick off the conversation with a brainstorming session. During this session, we make a point of letting the clients do most of the talking. We want to hear about their pain points, areas of friction and where budget constraints are causing challenges with meeting the increasing demands of local regulation. Most commonly, these are operational tasks that are essential but not core to their business, and thus underinvested, manual and prone to operational risk, resource fatigue and frustration. We then evaluate whether we already have a solution available or if we need to create a solution. If a tailored solution is required, we work closely with our tech and data science teams at RiskConcile, combining our expertise with ONE’s industry experience and insights to develop a quick proof of concept that we are then able to deploy quickly, generating immediate benefits.
Revel Wood: The goal is to be highly solution-oriented. Clients appreciate the speed at which we can present a viable solution, and if it meets their needs, we move swiftly from concept to production. It is an agile, iterative, and collaborative process, ensuring we deliver cost savings, enhanced efficiency, reduced risk, and improved margin, while also freeing up resources to focus on core value adding activities.
“In today’s highly competitive and fast-evolving AI-led environment, those who continue with manual tasks, data entry, and non-scalable Excel work will become the BlackBerry or PalmPilot we hardly remember.”
Q4: Why have ONE group solutions and RiskConcile chosen to work together on this?
Revel Wood: Both companies have a strong solution-driven culture and a client-centred focus. At ONE, we are a governance solutions provider, with a range of solutions in areas such as corporate services, compliance consultancy, asset and wealth manager support, Ucits management company and AIFM. Our “client and people first” culture drives everything we do, backed by best-in-class technology, which we have developed ourselves or in partnership, as demonstrated with RiskConcile.
Thomas Desombere: And RiskConcile brings the technological expertise with the same solutions focussed culture. Our background is in risk and regulatory tech, and we are focused on data and compliance solutions like PRIIPs, SFDR, AIFMD and complex calculations such as market risk, liquidity risk and swing factors. We share similar values with ONE and found that our common values and diversified skillsets complement each other perfectly, as reflected in the margin sourcing logo, which symbolizes this close collaboration between our teams.
Q5: Who can benefit from margin sourcing, and when should fund managers consider it?
Revel Wood: The margin sourcing process is essential for any Asset or Wealth Manager who wants to improve their bottom line and allow their teams to focus on core activities by outsourcing marginal, non-value enhancing activity. In today’s highly competitive and fast evolving AI led environment, those who continue with manual tasks, data entry and non-scalable Excel work will become the Blackberry or PalmPilot we hardly remember. The finance industry has lost some of its allure, and there is increased pressure for leadership to improve the workplace, enhance team collaboration, focus on wellbeing, and this can only be achieved by reducing waste, removing menial mind numbing tasks and inefficiencies that contribute to burnout, sickness and ultimately smart people leaving our industry.
Thomas Desombere: If your team is losing time on manual tasks, data entry and cleansing, if you’re under pressure from shareholders and regulators, or just struggling with rising operational costs, then it’s time to consider margin sourcing. We are here to listen, help and start to move the needle to enhance the performance of your teams, your business and ultimately your client experience.
Q6: Any final words for our readers?
Revel Wood: Don’t wait until inefficiencies start costing you valuable resources, whether it’s time, money, employee morale or high staff turnover. Reach out. We would be delighted to listen and have the opportunity to understand your challenges, sharing our experience of working with over 200 managers, and 37 administrators to see how margin sourcing can make a difference for your team, your business and your client outcomes.
