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Fund Communication Shouldn’t Bog Down Broker Dealers

Fund Communication Shouldn’t Bog Down Broker Dealers

It’s indisputable that fintech is rapidly changing the landscape of financial services. It seems as though there’s a new innovation every day promising that Mutual Fund asset managers can leave their outdated legacy systems behind. Broker-dealers have been particularly hampered in recent years due to where they sit in the mutual fund supply chain. They are pulled in all directions, whether it’s their fund company partners adding or altering share classes or responding to demands from their investment managers around product availability, performance, and transparency.

Fund communication is one of the top contributors to the overwhelming strain on the mostly manual-based processes still in use by most broker-dealers today. Fund companies, for the most part, still prefer the blast email method of communicating fund events and changes, requiring broker-dealers to sift through though thousands of mostly irrelevant emails to find the information required to execute the changes properly.

The good news is that the tide is changing.

The rise in Data as a Service (DaaS) allows a clear path to solving many of the issues associated with fund communications, at the benefit of the broker-dealer. We’ve outlined the following three problems facing broker-dealers that the DaaS model can solve.

Problem: Broker-dealers currently receive data from fund families in different formats via email.

Solution: Standardize the format of the message to make it easy to interpret.

Operations teams spend precious time combing through an individual email just to identify if the message even applies to their firm. If an email is applicable, that begins one step of many in verifying the information and clearing up ambiguities. On average, there are about 5 follow-up emails per relevant fund communication in order to clarify the message and action items.

Establishing a set format (or even a common portal) for fund companies to distribute the information would allow broker-dealers to quickly understand the fund change and whether they need to take action.

Problem: As much as 80% of all emails that broker-dealers receive from funds about change events are irrelevant to them.

Solution: Filter the fund communication to ensure that the change event details are only delivered to the affected distributors – based on the firm’s book of business.

The current prevalent method of communicating fund changes is an email blast from the fund company sent to every broker-dealer working with them. Blast emails seem advantageous from the fund’s perspective since they think they’re guaranteeing everyone will receive the message. However, it’s easy to see how the sheer volume of these messages can prove to be a tedious task for broker-dealers to simply determine if the fund change is even relevant to them.

A simple filter function is the solution in this case. Setting parameter for only messages pertaining to the funds on the broker dealer’s platform would go a long way in eliminating many of the unnecessary emails clogging inboxes, as well as ensure that the right person is receiving the message at the right time.

Problem: Inputting a fund change is a manual process that leaves room for human error, which puts the firm’s reputation at risk.

Solution: Automate the updating fund changes (and in turn get more from your operations team).

It’s difficult to mitigate risk with manual processes, as they leave the door open for inaccuracy and human error. If a fund change isn’t properly keyed in, there are financial costs and the broker dealer’s reputation at stake. Working through a DaaS model removes the manual roadblocks and puts the information into a standardized template. Why take the risk when automating the process is quicker and more consistent?

Not only will automating the process take risk out of the equation, but it will also allow broker-dealers to spend their time on more strategic and value-added projects for the business rather than with rote tasks, which means a happier (and more productive) operations team.

Is there a DaaS solution like this out in the market today?

Luckily for both broker-dealers and fund companies, Delta Data developed FundBlast for this very reason.

Officially launched earlier this year, FundBlast is Delta Data’s unique offering that provides the most reliable and accurate fund change communications, as well as other critical data sets such as daily prices, accrual rates, and periodic dividends, all in one user-friendly portal. From the centralized mutual fund data to the ability to export and download the fund-change data to the relevant and real-time updates, the promise of FundBlast is to address the major issues that have plagued broker-dealers for years and help them stay ahead of the change in a fast-moving industry.

For more information, FAQs, and to request a demo, visit our FundBlast homepage

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Steve Tomasheski

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.

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