Why Investment Managers Are Choosing Co-Sourcing for Regulatory Reporting

Author:

Shannon Pienaar
Head of Managed Services Operations at Confluence

Rethinking the Role of Managed Services

Investment managers today are under extraordinary pressure. Tight margins, expanding rulebooks, and restless regulators are forcing investment companies to rethink how they resource their regulatory obligations. Filing deadlines are tightening. And internal resources are stretched thin, thanks to hiring freezes, retirements, and growing workloads.

Yet, firms can’t afford to relinquish oversight of critical compliance functions. That’s why many are turning to co-sourcing: a collaborative model that provides scale, transparency, and expert execution, without sacrificing control.

Co-sourcing isn’t traditional outsourcing. It’s not DIY either. It’s a strategic partnership where responsibilities are shared and visibility is built into every step.

What Co-Sourcing Really Means

Co-sourcing is a service delivery model where your firm retains final authority and visibility, while a trusted partner executes non-core, data-heavy functions like regulatory reporting and compliance preparation. It’s designed specifically for areas that require additional oversight to support accuracy and expertise, but don’t define your competitive edge.

Key characteristics of co-sourcing include the following:

• Client retains control and approval authority
• Service provider handles operational execution
• Process visibility is built into shared platforms

This isn’t about handing off responsibility. It’s about gaining bandwidth, consistency, and confidence—especially for critical, time-sensitive filings.

4 Reasons Why Investment Managers Are Choosing Co-Sourcing

Firms are adopting co-sourcing at a rapid pace. Why? Because:

1. You can’t outsource responsibility
As a regulated entity, your firm is still accountable. Co-sourcing gives you the tools and transparency to meet those obligations with confidence.

2. Talent scarcity
Experienced regulatory reporting professionals are in in short supply. Teams face hiring freezes, unplanned turnover, and a loss of institutional knowledge. It’s often more efficient to buy the expertise you need than try to build it in-house.

3. Complexity and urgency are increasing
Deadlines for filings like Form PF, 13F-2, and AIFMD are getting tighter. Accuracy and speed are critical, and hard to maintain with limited internal bandwidth.

4. Variable cost structure
By co-sourcing, firms can convert fixed-salary overhead into usage-based fees, making it more cost-effective and aligned with workload, especially during regulatory filing peaks and troughs.

Common Misconceptions About
Co-Sourcing

Despite its benefits, co-sourcing is still sometimes misunderstood. Here are the realities behind these common concerns.

“We already have someone in-house.”
That’s great—until they retire or leave. Co-sourcing helps to enable improved continuity, scalability, and backup support.

“We don’t want to give up control.”
With co-sourcing, you don’t. The model is designed around transparency and oversight.

“We’ll wait for the rules to finalize.”
Deadlines aren’t going away. Proactive preparation is a smarter strategy than last-minute scrambling.

“It’s not a differentiator, so why invest?”
Exactly. Co-sourcing lets you redirect internal focus to core business initiatives while trusted experts handle the regulatory heavy lifting.

Real-World Drivers for Co-Sourcing Adoption

Firms often embrace co-sourcing when they experience one or more of the following:

• New or expanded regulatory workloads (such as Form PF, 13F-2, or AIFMD)
• Headcount freezes or delays in filling key roles
• Siloed or fragmented data across fund admins and accounting systems
• Limited institutional knowledge of new requirements or rule changes

These challenges are common, but they don’t need to derail regulatory reporting compliance or increase risk. Co-sourcing helps bridge the gap with speed and structure.

Control Meets Capability

Investment managers aren’t looking to outsource accountability; they’re looking to scale it effectively.

Co-sourcing empowers your firm to stay compliant, confident, and in control, even as demands grow and resources remain lean. It can help you handle complex, non-differentiating work efficiently, so you can focus on the strategies and services that truly set your firm apart.

For today’s reporting environment, co-sourcing isn’t a compromise. It’s a competitive advantage.

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About Confluence

Confluence is a global leader in enterprise data and software solutions for regulatory, analytics, and investor communications. Our best-of-breed solutions make it easy and fast to create, share, and operationalize mission-critical reporting and actionable insights essential to the investment management industry. Trusted for over 30 years by the largest asset service providers, asset managers, asset owners, and investment consultants worldwide, our global team of regulatory and analytics experts delivers forward-looking innovations and market-leading solutions, adding efficiency, speed, and accuracy to everything we do. Headquartered in Pittsburgh, PA, with 700+ employees across North America, the United Kingdom, Europe, South Africa, and Australia, Confluence services over 1,000 clients in more than 40 countries.

For more information, visit confluence.com