A never ending series of new regulatory and compliance mandates means that the broker-dealer community is continually having to adapt to change. In response, it’s investing in enterprise software that can handle large volumes of data, and integrate with “data as a service” solutions.
While it was the need to satisfy regulators’ demands for transparency that initially spurred the mutual fund industry to upgrade its back office technology and IT systems, the best data management utilities are now prized for their ability to provide real-time insight and analytics, and speed up decision making.
Thanks to advances in data management technology, a large number of back office processes can be automated. But there are more gains to be made from capturing and communicating mutual fund data as efficiently as possible.
We’ve identified revenue management, access to real-time data, and improved fund communication as key areas where enterprise software can enhance customer service, boost the bottom-line and help you stay ahead of change.
Revenue management has become a time consuming and error prone process, thanks to the proliferation and complexity of fund company selling agreements and vast range of revenue sharing arrangements. With the investment market becoming ever more complex, collecting the correct fees can feel like guesswork.
But with the right analytical controls, it’s possible to automate the management of every aspect of mutual fund fees, 12b-1 fees, revenue share, and shareholder servicing fees. By capturing the revenue data at the source, one process can replace three separate manual processes, while maintaining a comprehensive audit trail. Being able to centrally manage your fee schedules – and their contractual terms – provides simplicity to an otherwise labor intensive and complicated process.
Broker-dealers are learning just how advantageous it is to be able to compare fees across multiple partners and approve existing and new fee schedules through one portal. And an online executive summary of all these relationships provides quick access to documents, key contacts and other important information, as well as the ability to track changes over time.
The number of data points required to effectively run a mutual fund is vast, and includes everything from static Security Identifier-level detail, to forward-looking dividend calendars and corporate actions. To improve your product data, and avoid duplication of effort throughout the organization, it’s important to have an enterprise data management system that’s been designed to accommodate the unique needs of the pooled investment world. It should also be flexible enough to be tailored to your organization.
Such a system will allow you to manage data from various industry feeds (Profile I, Morningstar, VMS, Lipper, etc.) or it can come prepopulated with the industry’s most timely and accurate data set – something that only Delta Data offers. By allowing you to define rules and create workflows, it gives you access to critical securities information when and where you need it.
Finally, broker-dealers can use technology to vastly improve the line of communication with the funds they’re distributing. Current technology can improve upon an otherwise complicated and labor-intensive process by publishing fees and terms from contracts, providing an online executive summary of these relationships and allowing quick access to documents, key contacts and other important information. Having the ability to import and integrate data from a variety of applications into a single repository can offer immediate insight for your business, which may otherwise require weeks to gather. In a business where days and hours matter, it goes without saying that is a significant advantage.
For further reading on this topic, download our free whitepaper on mutual fund data management, authored by CEO Whitfield Athey and EVP Burton Keller.
Steve is a Sr. Sales Director at Delta Data representing the sell-side solution suite or Distribution Services. For almost 15 years Steve has made a career managing complex enterprise SaaS sales cycles with a heavy focus in FinTech. Connect with Steve on LinkedIn.