Understanding The True Cost of Mutual Fund Distribution

Blog > Understanding The True Cost of Mutual Fund Distribution – Part Three

Understanding The True Cost of Mutual Fund Distribution – Part Three

Apr 10, 2017

This is part three in a series on The True Cost of Mutual Fund Distribution. Part one focused on product placement, click here to read it first. Part two focused on active sales and marketing, click here to read part two. Part three focuses on tracking capabilities.

Tracking Capabilities

An investment manager will need to evaluate needs and determine what types of technology should be utilized. Although these costs are optional, it is important to evaluate each one and determine if any are necessary for the business.
Types of Technology Costs

CRM Tools
Sales Reporting
Omni/SERV

Customer Relationship Management Tools (“CRM”) – Customer relationship management tools help organize and document sales calls, email campaigns, and meetings. Most commonly utilized CRMs are Salesforce, Redtail, SalesPage, and ACT.

Sales Reporting – Aggregation tools provide consolidated data from custodians, broker-dealers, and other intermediaries. This type of service provides more detailed sales reporting to assist in managing territories, tracking sales traction, and determining market share. Providers may include Celera, AccessData, MARS Salesfocus Solutions, and SalesConnect.

OMNI/Serv – As more intermediaries are moving to Omnibus trading, Omni/SERV is an optional service to see account and rep level transparency for Omnibus trading. Although this is optional, it is important to have rep level data on trades.

Questions Advisers Should Consider

How can you use a CRM tool to your advantage?
How are you currently tracking sales data? Would using a CRM tool help your sales tracking?
Do you have Omnibus business? If so, does Omni/SERV make sense for your business?

Key Considerations When Selecting a Fund Administrator

Due to the increased investor transparency requirements and a heightened need to maintain regulatory compliance in recent years, there has been a shift toward fund managers outsourcing more back-office functions to third-party administrators. In the competitive market space, it’s critical that fund managers complete their due diligence when selecting a fund administrator and factor in key considerations such as technology, experience, servicing capabilities, and cost.

Toward the Future of Friction-Free Fund Administration

In the competitive landscape of fund administration, technology stands out as a primary differentiator among service providers. As the financial industry evolves and regulatory requirements become more stringent, fund administrators increasingly rely on innovative technological solutions to enhance their offerings and stay ahead of the curve.

Gaining Scale and Efficiencies in your Investment Practice

While the ETF asset pool continues to grow (topping $8.1 trillion in the U.S. as of December 2023), advisers are also seeing increases in assets raised via Separately Managed Accounts (SMAs). According to Cerulli Associates, there is about $2 trillion in SMA account assets, up 14.1% from $1.72 trillion in assets in 2022, and assets in these accounts are projected to reach $2.9 trillion by 2026.2 Investors are clearly becoming more and more aware of the advantages to these types of accounts. They receive customized strategies, often get a high level of personal attention from their money managers and have the ability to see all of their specific holdings in one statement.

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DISCLOSURE: Information contained on this website is based on public data, historical agreements and dialogue with intermediaries. Such information represents our current understanding of the described platforms and the costs associated with them. In many cases, such costs may be negotiable. All pricing and fee information is subject to change without notice.

8778 UFS 2/18/2022