Enhancing Efficiency in Intermediary Oversight

The evolving nature of risk in a dynamic environment and an industry built on rules and regulations have led to an increased investment in oversight operations by fund companies, resulting in an industry-wide exploration of advanced solutions and services.

For asset managers, intermediary oversight is a portion of a broader oversight mandate covering all critical third-party relationships. As oversight responsibilities continue to expand, budget pressures demand that activities become more efficient. These competing forces present some notable challenges.

Read on to learn how BetaNXT helped a leading investment management firm address the inefficiencies surrounding its intermediary oversight program.

Customer Challenge: In Need of an Oversight Upgrade

The investment management firm sought a controlled approach to its intermediary oversight program, including an automated solution for intermediary fee management and expanded comprehensive reporting capabilities.

In addition, the third-party processing application the firm was using to manage its intermediary fee payments lacked sufficient audit capabilities and means of transparency.

Identifying the Pain Points – Oversight Challenges

Need for Efficiency & Expediency

Manual tracking of expected invoices and pending agreement changes caused inefficiencies, while reliance on physical documents and other labor-intensive processes hindered the firm’s efforts to streamline workflows. Disparate systems with data scattered across multiple platforms led to a time-consuming process to produce reports.

Insufficient Audit Trail

Inadequate audit capabilities prevented easy access to historical records with all data points, tasks and transactions, posing regulatory and financial risks.

Lack of Transparency

Due to a lack of transparency, the firm’s fee calculations didn’t provide a detailed accounting breakdown of certain intermediary fees charged to the underlying funds.

Implementing a Comprehensive Intermediary Oversight Solution

Leveraging deep industry expertise and extensive experience with distribution partner invoicing and validation, the BetaNXT team helped the firm implement a tailored solution that aligned with the specific needs and objectives of its oversight program.

Intermediary Insight

In-depth review and analysis of intermediary control documents assist the fund in mapping functions performed by the intermediary to appropriate oversight tools, ensuring coverage of all applicable areas.

Intermediary Insight offers audit report analyses that enables the firm to target its follow-up oversight activities to only high-priority controls.

Fee Management

Our automated solution verifies accurate fee payments by comparing contractually based fee calculations against distribution partners’ invoices.

Integrated Reporting & Analytics

Key data from across the organization—including Fee Management—is consolidated into a single view to provide clear, quantitative insight into intermediary performance, with a centralized repository for fast, secure access to agreements, invoices and critical documents.

Results 

Improved compliance, efficiency and transparency in the firm’s oversight program with an intuitive portal and intermediary insights to better manage oversight activities, including:

Enhanced Operational Flexibility & Efficiency

Automated solutions and managed services maximized the firm’s operational efficiency by reallocating resources and personnel to other high-priority oversight activities.

Payment advice functionality automated the transfer of payable data into the firm’s Accounts Payable platform, resulting in a straight-through, efficient validation process and reduced time spent on manual processes.

Increased Transparency & Audit Capabilities

Our Fee Management solution provides details of the underlying calculations for how expenses are allocated across the organization, allowing for increased transparency in the firm’s reporting.

Automated dashboards and integrated analytics provide real-time tracking of assets and distribution fees across the dealer network, strengthening audit capabilities and helping mitigate regulatory and financial risks.

Customized & Centralized Oversight Workflow

The solution consolidated the critical functions of its intermediary oversight program in a centralized portal with configurable dashboards, reducing risk and eliminating manual processes with customized workflows for all counterparty interactions.

Streamlined Reporting

Automated, standardized management and board reporting improved accuracy and timeliness while reducing the time and resources required from the oversight team.

Automatic reasonability checks ensure that reporting data is consistent and complete, eliminating the need for manual verification.

Domain Expertise

Our team of industry experts provided the firm with a wealth of domain expertise/knowledge and best practices while implementing these oversight solutions, giving them a trusted partner that helped increase operational efficiency and improve performance

A Partnership Powered by Adaptability

Intermediary relationships are complicated arrangements and do not lend themselves to one standardized type of oversight program.

A lean and adaptable approach to a changing industry, coupled with a willingness to explore bespoke solution enhancements and functionalities were critical to successful implementation.