Five questions to consider when selecting a Form PF service provider

Five questions to consider when selecting a Form PF service provider

Now that most investment managers have gone through at least one Form PF filing cycle, firms have had the chance to assess their Form PF programs, and at the same time look to  solutions that are being provided by software companies and fund administrators. With first-hand experience of how complex the filing process can be, large filers are looking externally to see what efficiencies they may be missing out on. Smaller filers too, may be looking for a standardized platform in order to complete a process that they haven’t undertaken before. With Form CPO-PQR and other regulatory filings coming on-line, firms are realizing that regulatory reporting requirements are here to stay, and that it may be time to consider an off the shelf solution as a means to creating a comprehensive filing program.

Some of the specific benefits a third-party Form PF solution can offer include:

  • Providing  your firm with a fully auditable, repeatable process for filing Form PF (as well as other regulatory filings as vendors expand their offerings);
  • Helping to ensure that your firm does not miss any changes to the format of the Form;
  • Potentially providing  a lower cost model in comparison to using internal resources;
  • Providing access to the expertise which many third party service providers have gained while assisting in the preparation of numerous Form PF filings, including first- hand information on how other filers have answered the more ambiguous questions on the Form.

Given the numerous solutions available to choose from, it’s important to undertake a thorough selection process in order to choose the right product for your firm’s specific requirements, and to in turn create a successful Form PF program. By staying ahead of the curve, and choosing the right technology partner now, you may be able to prevent headaches further down the line.

With this in mind, below are five questions to consider when going through the Form PF solution selection process.

How much support are you looking for?

The range of support for preparing and filing Form PF varies from providing a desktop software install where the Form can be filled out completely by the client, to a full service option, where the third party, in consultation with the filer, prepares the entire Form from start to finish. The breadth and depth of the items on the Form which your firm needs to fill in are important factors to consider when deciding how much assistance you are looking for from an external solution.  If your firm decides to do a full-service outsourcing, you will need to determine whether you want to partner with an administrator, a compliance consulting firm, a technology firm, or a combination of one or more of the three.

What unique time saving benefits does the product offer your firm?

Most products will offer standard features such as audit tracking, permissions, and formatting an electronic filing to SEC standards. In order to differentiate between various products, you should determine whether a particular solution has an existing relationship with one of your current administrators or data vendors. If it does, there may be built-in efficiencies that your firm will want to consider leveraging. Do you calculate risk metrics? If so, you may want to consider products that have risk calculators built in, or have partnerships with your risk metrics vendor. If you have an existing relationship with a trusted software provider that has a Form PF solution, take the time to comparison shop first in order to ensure that it is truly the best option for your firm.

What is the payment/pricing model?

We have found that there are almost as many pricing models for Form PF products, as there are vendors. When selecting a product, ensure that you are only paying for what you need. For example, if you are comfortable filling out the Form, but are looking for a software solution for audit and consistency purposes only, ensure that the firm that you select has flexible payment options that  do not charge for additional technology or consulting services . Some software companies will charge on a per filing basis, while others will charge an annual licensing fee. When you make a decision on which product to move forward with, you want to ensure that your money is being well spent.

Do you want a hosted solution or a local installation?

A hosted solution will help you avoid what could be a costly installation project, as well as the need to ensure that you are using the latest version of a product. This, however, may result in higher fees, and open your firm to the risks of having your Form PF data stored externally. Fund administrators will generally only provide a hosted solution, whereas software vendors will be more likely to offer a local install option. The direction that you decide to go in will help narrow down the providers that you choose from.

What enhancements is the vendor working on?

Although the solutions that you are considering may not yet be the perfect match for your firm from a data input or user functionality standpoint, the vendors may be working on enhancements that will soon be available. For example, the vendors may be developing customized data feeds for your data providers, or enhancing  user functionality features, such as being able to drill down to position level detail of numeric results for certain Form PF questions. Being aware of what is coming next will help you to make a more informed decision.

About IMP Consulting

IMP Consulting works with asset managers and hedge funds to select and implement effective technology solutions. Our team of industry experts includes former portfolio managers, traders, compliance and operations professionals, and IT managers and engineers from leading OMS/IMS and accounting systems providers.

Our team’s intimate knowledge of  market-leading products and our industry contacts keep IMP on the inside track of the best products to use and the top vendors in the industry. The net result: a team uniquely qualified to efficiently and expertly match your needs with the full capabilities of your investment management systems.

This article was authored by Roger Binggeli, Senior Compliance Consultant.  For more information, please contact Roger at or Jane Stabile at  Roger can also be reached on 617-314-7415 x118.