Intermediary fees make up a significant amount of a mutual fund company’s annual expenses. The complexity and the volume of these fees continue to increase, which means it’s crucial for a firm’s fee management program to be robust, efficient, and all-encompassing in order to avoid erroneous expenses, inefficient allocation of resources, and unnecessary risk.

Whether it be on a monthly or quarterly basis, asset managers are consistently inundated with fee invoices. Operations teams must parse through all of those invoices to verify that each one is correct and that it aligns with the intermediary’s particular agreement.

Additionally, they need to be able to allocate the payments correctly and capable of providing regulators, as well as their own firm’s board of directors, with documentation that confirms correct payment allocation.

Read on to learn how Delta Data helped a leading investment management firm overcome these fee management challenges.

Customer Challenge: Seeking a Robust Solution

A prominent US investment management firm, overseeing $100+ billion in assets under management (AUM), faced critical challenges in fee management. The firm sought a robust solution to enhance automated efficiencies, emphasizing quality, technological advancements, and forward-focused development that also offered modular integration between fee management data and intermediary oversight due diligence reviews.

    Identifying the Pain Points – Fee Management Challenges

      Manual Processes

      The investment management firm was burdened with a heavy reliance on manual processing for fee payment and allocation as well as time spent manually poring over data to affirm that payments aligned with intermediary agreements and prospectuses.

        Inefficient Workflow

        They faced operational inefficiencies incurred from manually logging and tracking expected invoices and pending agreement changes, offering themselves up to fall victim to the inevitable human error that accompanies manual processes and inadvertently exposing themselves to the unnecessary risk.

          Regulatory and Financial Risks

          As a result of inadequate invoice receipt and audit capabilities, the firm lacked easy access to historical records with all data points, tasks, and transactions, posing regulatory and financial risks.

          Implementing a Comprehensive Fee Management Solution

          The implementation of Delta Data’s Fee Management solution addressed these challenges head-on for the firm, providing a comprehensive solution that facilitated the client’s fee management processes and workflows.

          Automated Intermediary Fee Processing

          Straight-through processing with configurable tolerance authorizes approval of accurate invoices, and those error-free invoices flow directly into payables management. With this automated intermediary fee processing, the firm significantly increased operational efficiency, allowing them to reallocate time and responsibilities of personnel to more strategic tasks.

          Invoice Verification and Analytics

          Invoice verification and analytics enables independent fee audit by comparing the firm’s fee calculations against distribution partners’ invoices. Using distribution transparency data, accounts, and contract agreements, fee calculations are performed to confirm that an invoice is correct and matches the billable assets.

          Streamlined Workflows

          Automated invoice processing streamlined the firm’s fee management workflows, ensuring rapid and accurate analysis of granular-level fee data.

          Results with Delta Data

          Delta Data’s Fee Management solution had major impacts across the organization, including:

          Regulatory Impact

          Full audit capabilities for role-based duties and approval requirements with automated allocation and reporting reduced the firm’s regulatory risk.

          Relationship Impact

          Over 70 percent reduction in processing time for transfer agent (TA) and Omnibus files resulted in more readily available data required to receive and process invoices, fostering timely and accurate payments to intermediary partners while elevating the service experience.

          Reputational Impact

          Employing an automation tool that manages the critical components of rules-based intermediary invoice reconciliation facilitated a seamless operational process and enhanced industry perception of the firm as a trusted and reliable partner.

          Transforming Intermediary Fee Management

          To effectively manage the countless invoices and improve operational efficiency, firms need to have a robust system in place that automates every step of the process.

          Read the full case study to learn more about how Delta Data’s Fee Management solution empowered this leading investment management firm to not only overcome their challenges but also thrive in an environment of regulatory scrutiny and operational complexity.