The evolving nature of risk in a dynamic environment and an industry of rules and regulations has 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 Delta Data 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 had been utilizing 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 logging of expected invoices and tracking pending agreement changes caused inefficiencies, while physical documents and other labor-intensive processes hindered the firm’s efforts to streamline workflows. Disparate systems with data elements spread 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

          The Delta Data team, with its vast implementation experience and industry expertise, applied its well-established and intricate knowledge of distribution partner invoices and validation processes toward helping the firm deploy solution functions and enhancements that best met the needs and parameters of the firm’s oversight program.

          IM INSIGHT

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

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

          Fee Management

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

          Integrated Reporting & Analytics

          Crucial data points from all silos of the firm, including Fee Management, are brought into one view to quantitatively assess how intermediaries are performing, and a document repository provides easy retrieval of counterparty agreements, invoices, and other important documents.

          Results with Delta Data

          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

          Delta Data’s 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 reporting and analytics features enhance the firm’s audit capabilities by tracking assets and distribution fees across the dealer network, reducing the firm’s exposure to regulatory and financial risk.

          Customized & Centralized Oversight Workflow

          Enables the firm to consolidate 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

          Standardized and automated management and board reporting saves the firm’s oversight team from using additional time and resources while enabling more accurate and timely reporting.

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

          Domain Expertise

          Delta Data’s 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.

          Read the full case study here to learn more about how Delta Data helped this leading investment management firm enhance the efficiency of its intermediary oversight program.

          Connect with our team for more information on how to overcome the challenges of intermediary oversight.

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