Investment managers drive up tech spend

Investment managers drive up tech spend

Investment management firms are raising their spend on technology and driving down salary levels for top staff as they shape their recovery from the 2008 financial crisis, according to a study by Advent Software.

The vendor polled 136 asset managers from the global Advent User Group for the research, which found that a majority of respondents increased their operations budgets in 2010 and expect further increases in the year ahead. Meanwhile, total compensation for executives, portfolio managers, traders and analysts was significantly down from 2008 levels.

In the wake of the market turbulence, 63% of the survey respondents say their operations budgets increased in 2010, and a majority of firms of all sizes anticipate additional increases in 2011. Disaster recovery was the factor cited most often as a driver of budget increases, and also ranks high on the list of firms' near-term priorities.

Portfolio accounting and trading continue to claim almost 40% of average IT and operations spending.

Survey respondents cited portfolio accounting and client reporting, disaster recovery, and client service contact management as the top priority IT initiatives for 2011.

In contrast to the tech spending trend, compensation levels for many positions were down from those reported in 2008, particularly among senior executives and investment professionals. Median chief executive officer pay fell 15% from 2008 to $383,000, with an average of $614,000. Chief investment officers (CIO), typically the second-highest paid executive, earned an average $442,000. Four out of ten CIOs saw their compensation fall during the past year.

Median compensation paid to other investment professionals fell by double-digit percentages since 2008, but more than half reported compensation starting to rise over the past year. Senior operations staff saw median compensation rise slightly from two years earlier.

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