Ignites published an article in their January 5^th issue, entitled “2012: The Year of Creeping Distribution Costs?”

One of the most difficult trends fund companies have to deal with is how to intelligently manage both the increase in omnibus distribution expenses and compete for shelf space at omnibus distributors.

The squeeze is on for mutual fund companies.

Mutual fund company directors know how creeping expense ratios decrease the desirability of their funds.

Relationship managers see upward pressure on expense ratios hurting their ability to compete for shelf space at distributors. If the expense ratio gets too high, they’re dropped from the distributor's platform, and that’s not good.

Finance executives know there is a problem, but they don’t have the data to address it. How do you guide contract negotiations with distributors, if you don’t know:

• Where your assets are
• How many investor accounts your omnibus distributors are supporting
• What your actual distribution expense spend is (total and breakdowns)
• What agreements you actually have in place

The directors haven’t started asking questions yet, but they will soon.

Operations executives struggle to manually keep up with a dizzying array of changing invoices and contracts across an entire network of distributors. Hiring more people increases operations expense, but does not improve performance. The number of variables an operations person has to manage to validate and allocate an invoices is mind numbing, and the risk of errors is high. Operations budgets are the first to be cut when things get tough. Operations executives are stuck in a bind….where do they go for help?

To manage expense ratios, directors need to decide whether to lower management fees (hurting their investors profits), or look more closely at rising distribution costs. Smart decisions can make a huge difference. They need data to build win-win relationships with the right distributors for their products.

Get ahead of the curve. Come talk to Capnetix. We have the solution today that benefits directors, finance, relationship and operations executives.