The operational challenge of managing mandatory and voluntary corporate action (CA) events is complicating life for brokers as their volume continues to grow. In an increasingly digital industry, processing CAs remains a highly manual task at many brokerage firms.
Manual processes are inefficient and add risk. Advisors must approve events for distribution, get them to the correct investor, capture the elections, and enter them into their securities processing system. Advisors receive a lot of election offers and struggle to keep track of when they expire and how they voted in the past.
Fortunately, data automation is helping to take the friction out of CA events. BetaNXT is building the next generation of connected wealth management solutions. Mediant, our investor communications business, offers MIC ReOrg Manager. Take a look at three ways this data-centric approach increases operational efficiency and advisor satisfaction by automating CA events.
Re-keying election data into the firm’s securities processing system is a risky activity. For instance, inadvertently plugging in 10 percent of an investor’s shares to be voted for a rights proposal when that investor’s election was actually 100 percent can cost the firm a lot of money. That’s because when the investor incurs a loss, the broker may need to reimburse the shareholder for that loss to preserve the relationship.
Multiply this by hundreds, or even thousands, of potential errors and investor losses and the value of eliminating human error through automation becomes immediately obvious. MIC ReOrg Manager integrates with various securities processing systems including Beta Systems for real-time processing and automates the process of capturing voluntary CA elections including offer distribution, capture and entry of elections into securities processing systems. The re-keying risk is eliminated, greatly reducing the potential for costly mistakes.
With manual systems, brokers have no comprehensive way of monitoring the CA process. Managing offers and election status are often handled in Excel, which is inefficient and not very effective. It’s difficult for brokers to tell which advisors have voted and which haven’t, which offers are coming up next and which are due to expire – or which have already expired.
ReOrg Manager removes this chaos. It automatically captures and displays advisors past offers, current offers, election status, and positions. All information is easily searchable, with all information contained in one application with an intuitive dashboard.
With manual processes removed and the management of CA events made significantly easier, advisors save time, reduce stress and can focus on their clients.
At an industry level, SWIFT and the Securities Market Practice Groups (SMPGs) have made significant progress in developing and deploying a standardized communication format, using ISO 20022, for relaying CA messages. However, it’s taken longer for many brokers to take advantage of the productivity and client service benefits of data automation.
Advisors want to spend their time working with existing clients and connecting with new prospects. ReOrg Manager helps them do this, making space to do higher value work with clients and freeing up time to create fresh opportunities to grow the business.
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