Non-Investment Business
Risk Management

Convergence provides a unique blend of data-driven non-investment
risk insights that can be actioned by our consultative services team
in  five  major categories including Operational, Compliance, Regulatory
 Event, Service Provider and Human Capital Risks.

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Identifying and Managing
Operational Risk

Convergence measures the risk in the investment adviser’s operation functions by examining the relationship between  investment operations work  and the non-investment heacount doing the work.

Data-driven Products include:

Red Flag detection – red flag analytics are applied to 21 different business conditions that require heightened attention by the investment advisers operational support teams

Work Intensity Analytics – measure imbalances between changes in work and headcount

Predictive Analytics – measure the likelihood that the investment adviser may be looking to expand geographically, offer new funds or change/diversify service providers

Regulatory disclosure searches – is a time series review of SEC enforcement actions taken against investment advisers for wrongdoing

Consultative Services include:

Operational Due Diligence – initial, periodic, with ongoing daily maintenance

Risk due diligence for strategic acquisitions

Identifying and Managing Compliance Risk

Convergence “data-driven insights” and consultative services support compliance officers and their staff’s efforts to improve their regulatory filings. We provide insights into a Manager’s compliance program and its ability to meet regulatory filing requirements. We provide an independent data-driven view of the “quality” of filings and can support the corrective actions needed to improve the condition.  Compliance & ODD teams use these scores to evaluate and improve the adviser’s organization.  Quality scores are based on proprietary testing techniques applied to each filing, scoring the accuracy, consistency, and frequency of each regulatory filing.  The scores are compared to a tightly defined peer group to create a distribution that allows Convergence to provide an overall comparative score.  Our consultative services support investment advisers in identifying and implementing corrective actions across their people, process and technologies of the organization.

Data-driven Products include:

Integrated Compliance Quality Scorecard reports and analytics

Individual Form D, ADV and 13F quality reports and analytics

Fund Expense Disclosure reports and analytics

Compliance Quality Benchmarking & Monitoring

Advisor Brochure Redlining

Consultative Services include:

Regulatory Filing Process Reviews

Assist in the creation of core compliance protocols

Identifying and Managing
Regulatory Event Risk

Convergence measures the risk, or likelihood, that an investment adviser may incur an SEC regulatory enforcement action.  We  identify “high-risk business conditions” (HRBCs) that Convergence believes contributes to various wrongdoings cited in SEC enforcement actions and compares them to all advisers in the market. We use an HRBC “match-rate” to determine the degree of similarity between investment advisers and different type of enforcement actions to determine a regulatory event risk profile.

Data-driven Products include:

SEC Case Studies – decompose and highlight how high risk factor scores create high-risk business conditions (HRBCs) that are likely to have enabled wrondoing by investment advisers

High Risk Match Scores – custom analytics that profile the most common HRBCs in various SEC wrongdoing cases including but not limited to valuation conflicts, fees and expenses, disclosure failures and fraud.

Investment Adviser Benchmarking – custom analytics that compare the Regulatory Event Risk of different investment advisers

Consultative Services include:

Non-Investment Functional Risk Assessments

Risk Eductaion Services – SEC Case Debriefs

Identify, Select and Manage
Service Providers

Convergence’s proprietary “voice of the market” analytics measures and identifies the risk in service providers chosen by investment advisers to support their business. Voice of the market analytics examine tens-of-thousands of service provider selection decisions to create a “best-fit” profile using strategy, size and geography of the fund and the business complexity of the investment adviser.

Data-driven Products include:

Best Fit analytics – provides insight into what service providers are best for your business and your funds using strategy, size, geography, and complexity filters

Market Share analytics – provides insight into which of your service providers is gaining or losing market share using fund, asset, strategy, and geography filters 

Business Won and Lost analytics – provides insights into the names of investment advisers that have changed an existing or added a new service provider

ESG Profiling– provides insights into ESG profiles of your service provider’s clients and compares it to tightly defined peer groups.

Non-Investment Risk Profiling – tells you the complexity and risk of a service provider’s client base and compares it to tightly defined peers

Consultative Services include:

Service Provider Selection & RFP Support

Service Provider Management Services

Human Capital Risk

Convergence data-driven insights and consultative services can help you identify and measure “high-risk staff-related conditions” in an investment adviser’s organization.

Data-driven Products include:

Organization Key Employee Turnover – absolute and relative measures of key staff turnover

Key Employee Functional Conflicts – absolute and relative measures of key functional conflicts of interest in your business

Entity Red Flags – identification of civil, criminal and regulatory citations 

Key Employee Red Flags – identification of civil, criminal and regulatory citations 

Political Contribution Exposure – identifies history of entity and individual giving

Our risk products and services are applicable for:

Public & Private Investment Advisors

All Allocators

Family Offices

Administrators

Auditors

Prime Brokers

Custodians

Insurance companies

Compliance firms

Fintech

Legal Firms

Mancos