Do you have a handle on distribution expenses?

Historically, fund companies had direct relationships with investors, and distribution expenses were pretty simple, and handled through the TA system.

Assets are now shifting from direct relationships to omnibus accounts at large distributors, and the rate of change is increasing.

Now, you've lost the ability to pull a report from TA. You can no longer track the relationship between your omnibus distribution expenses, and the assets that generate revenue for you.

You try to get reports from the people in operations, hoping they can skim some excel data from the invoices they process and hand it to you so you can cobble together a picture for the CFO and the directors, so they can see what's going on.

Unfortunately, the people in operations have their hands full. They're trying to keep their head above water, digging through a mountain of complex invoices, trying to validate they're getting billed are correct, getting them paid and allocated.

By the time operations gets around to getting you reports, the next month hits, and they're back underwater again. It's not their fault....they have to get the bills paid.

You're starting to get worried, because you hear distributors are going to be raise rates, and you don't have the data or the tools to help your relationship guys negotiate good contracts.

Without data or tools, you have no idea which are "good" assets that generate a healthy profit and a win win with your distributor, and which are "questionable" assets, where you pay more in distribution expense than you get in revenue.

Do you know how your overall distribution expenses are trending over time?

Do you know how the breakdown of assets across your distribution network?

Do you know which assets are profitable, and which ones may cost you more in distribution expense then you generate in management fees?

Do you know which contracts are efficient for both distributor and fund company?

Do you know which contracts are underwater (costing you more in distribution expense than you generate in revenues, and add unnecessary expense to your funds, and push up your expense ratios)?

If these questions bring you concern, and you don’t know the answers, come talk to Capnetix.

We can help you answer these questions about how to get smarter in your fund distribution, and compete in a tough environment.