Monthly Archives: January 2017

Category: Compliance, Conferences and Events

Suggestions for Getting Ahead of the Compliance AND the Regulatory Exam Curve


Nick Nichols, in his latest post on DST Insights, talks about how the financial services industry is leveraging behavioral analytics to strengthen their fraud monitoring programs.

In this post, he talks about the role behavioral analytics are playing among regulatory bodies, like the SEC’s Office of Compliance Inspection and Examinations (OCIE). In addition to the many potential benefits behavioral analytics can offer your firm’s fraud detection efforts, they can also help you prepare for any scheduled OCIE examination. How? By giving you the tools to analyze, identify and remediate (if necessary) those issues OCIE says they will be using analytics to examine.

To learn more about the potential benefits of adding behavioral analytics to your fraud detection program, visit Nick Nichols’ post, Getting Ahead of the Curve: Re-Imagining Fraud Detection in 2017 on DST Insights.

Category: Conferences and Events, Industry Trends

The Sky Is Not Falling: Managing Disruption in Financial Services


Disruption is an (almost too) easy way to explain what is happening in financial services today. Trends affecting the industry – changing consumer expectations, evolution of technology and the resulting influx to data, pace of regulatory change – feel to many of us like they are reaching a crescendo. The passage of the DOL Fiduciary Rule last April, which is rapidly accelerating the movement from active to passive investing and leading to unprecedented scrutiny of fees, coupled with the frenzy and uncertainty created by the U.S. presidential election, is contributing to an environment in which many are in a state of panicked paralysis.

But, disruption on this scale has been continuous since the events of 2008, which triggered a tsunami of regulatory changes that continue to this day. Or, at least continued through November 8, 2016, when the results of the election put many regulatory bodies on pause.

Disruption and change are what’s normal in financial services.

The theme for the 2017 NICSA Strategic Leadership Forum (SLF) is “Disruptors Facing the Asset Management Industry,” with the goal of offering asset managers the opportunity to think strategically and critically about how they are managing disruptors at their firms.

Boston Financial’s leadership in this arena is evident in the conference agenda, where five of our enterprise executives are presenting on how we’re adjusting to the “industry disruptors” to help our clients stay ahead of the curve. NICSA SLF participants will be able to learn what we’re doing and why we’re doing it, to adapt to trends in regulatory compliance, customer service, and technological advancement; and consider how they might apply what we’re doing to benefit their firms. Topics we’re addressing include:

Swing Pricing: Can it Work in the U.S.? This panel will explore the operational challenges associated with implementing swing pricing in the U.S. and debate the differing opinions on adopting such policies for open-end mutual funds.

Our Role: DST Compliance Officer Nick Horvath will moderate.

Updating the Non-DOL Regulatory Landscape: Take a deeper dive into topics like RIC modernization, business continuity planning, liquidity, contingent NAVs, and derivatives, get the latest update on the regulatory horizon, and learn more about potential opportunities and threats to investment managers, administrators, and service providers.

Our Role: Boston Financial Chief Compliance Officer Craig Hollis will participate.

Leveraging Data Analytics to Combat Money Laundering and Other Financial Fraud: In this session, attendees will hear about current money laundering and fraud trends, and what strategies are being used to more cost effectively address them.

Our Role: DST Vice President of Risk and Compliance Nick Nichols will moderate a panel that includes DST Vice President for Development and Data Science John Young.

The Rise of the Robo Advisor: This session will explore the role of digital advice in an evolving financial marketplace and provide attendees with information about the ongoing evolution of technology that supports it.

Our Role: DST kasina Senior Research Analyst Jason Dauwen will moderate.

When Generations Connect: Keynote presentation and discussion with Hannah Ubl that will provide valuable tips and actionable solutions for multi-generational workplaces, and key strategies for marketing and reaching generationally diverse client bases. A panel of industry leaders representing different generations will follow her presentation to share their experiences and perspectives on the topic.

Our Role: I’ve got this one! I will be one of the panelists in the post-keynote discussion.

If you are not attending NICSA SLF this year, please make sure you are following Boston Financial on LinkedIn. We will be sharing comprehensive event highlights both here, and through our corporate Twitter handle, @BFClients.

Thought leadership is more than marketing jargon at Boston Financial. For us, thought leadership tells the story of what we think about changes in the industry, and what we are doing about them. The agenda at 2017 NICSA SLF demonstrates that Boston Financial is recognized for doing more than merely talking about industry trends. We’re also creating efficient solutions and products to help asset management firms meet the evolving needs of their investors.

Category: Conferences and Events

Upcoming 2017 Events


It’s a new year full of new events and dates to mark your calendars! Boston Financial will be bringing you opportunities to network and learn in 2017 at the following forums and industry events.

January 29 – January 31: NICSA Strategic Leadership Forum (SLF), Diplomat Resort & Spa, Hollywood, FL. Hear from the experts themselves as they update attendees on today’s most important industry topics. Connect with peers, participate in discussions, and network with professionals of all levels. Attendees will be walking away from this conference with new knowledge, inspiration, and contacts. Register today!

February 20 – February 22: DST Advance Conference, JW Marriott Desert Ridge, Phoenix, AZ. Are you interested in connecting with over 450 like-minded asset management professionals at ADVANCE, the only conference where the power of DST’s entire Financial Services organization comes together? View the full agenda, spanning more than 60 sessions, 75 speakers, and 10 hands-on labs here. Register today!

March 8 – March 9: MFEA Digital Council Summit, Janus Headquarters, Denver, CO. Make plans now to join digital strategists to identify today’s best practices, key trends, challenges and opportunities in the asset management industry. Boston Financial is a sponsor. Reserve your spot today.

March 12 – March 15: ICI Mutual Funds & Investment Management Conference, JW Marriott Desert Springs in Palm Desert, CA. The conference offers panel discussions and keynote speakers addressing a wide range of regulatory and legislative issues affecting the fund industry. Boston Financial will join DST and State Street in hosting a client dinner on Sunday night. Registration is now open.

April 24 – April 25: Boston Financial Blue Sky Roundtable, Boston, MA. At this event, our Blue Sky Administration team gives our clients the opportunity to network with peers, discuss strategies, and discover best practices to improve the efficiency and effectiveness of their blue sky programs.

May 3 – May 5: ICI General Membership Meeting (GMM), Washington, DC. At this year’s GMM, a forum for industry executives to discuss key issues, Boston Financial joins DST and State Street as conference sponsors. A client dinner will be hosted at the Hay Adams on Wednesday night.

*June 8: Expect Miracles East Coast Classic Charity Golf Tournament, Pinehills Golf Course, Plymouth, MA. Boston Financial is once again a sponsor and will attend.

September 11 – September 13: Boston Financial Client Forum, Pendry San Diego, San Diego, CA. Our annual Client Forum is a great opportunity for our clients to network with their peers and hear from leading industry experts.October 4 – October 5: NICSA General Membership Meeting, Boston, MA. Boston Financial is a sponsor and will attend.

*October 12: Expect Miracles West Coast Classic Charity Golf Tournament. The Resort at Pelican Hill, Newport Beach, CA.

November 7: Boston Financial Chief Compliance Officer Forum, Mandarin Oriental, Boston, MA. Our annual CCO Forum provides insights into Boston Financial’s culture of compliance and how we use controls and oversight to help assess and mitigate risk.

November 9: Expect Miracles Wine & Spirits Charity Event, House of Blues, Boston, MA. Boston Financial is a sponsor and will attend.

Make sure to follow @BFClients for updates and announcements on our conferences and events for 2017!

*Subject to change.

Category: Industry Trends

Top Ten 2017 Predictions for Product, Distribution, and Marketing in the Asset Management Industry


Operating margins for asset managers in the DST kasina Asset Manager Composite rose to 33.7% by Q3 2016 — an increase of 20 basis points from year-end 2015 — and AUM reached an all-time high for the Composite group: $10.6 trillion.

While this sounds like good news for the industry as a whole, the reality is being masked by the growth and scale of the largest asset manager in the group. When looking at the trend in asset flows, excluding the largest manager, the Composite shows five consecutive quarters of net outflows. While there are pockets of success in the industry, most asset managers are experiencing profitability challenges and the threat of consistent net redemptions.

Given these trends, I offer 10 predictions for 2017:

Prediction #1: The U.S. presidential election has given rise to speculation that the implementation of the DOL Fiduciary Rule might be delayed, or even repealed. However, our research shows that most broker/dealers and asset managers intend to forge ahead with compliance, since the current timetable does not provide the luxury of taking a wait-and-see approach. Moreover, many of the requirements under the Rule reflect broader market trends that will likely continue, even if the Rule is delayed or changed. 

Prediction #2: Despite a year with a record 409 mutual fund closures in 2016 (through October 31), we expect the number to climb to a total of more than 450 closures in 2017 as distributor platforms consolidate fund offerings.


Prediction #3: As franchise valuations decline and asset manager fees come under greater pressure; look for the volume of U.S. asset manager merger and acquisition deals to surpass the levels reached in 2015 and 2016 to reach more than 150 deals in 2017. We can also expect to see a reduction in the number of unique fund families and individual funds from today’s figures of 750 and 8,048, respectively.


Prediction #4: Active to passive net equity fund flows will continue unabated, and likely accelerate in 2017 with a greater market and regulatory focus on fund fees. Passive mutual fund assets will surpass 30% market share, up from 23% by the end of November 2016.


Prediction #5: As managed accounts assets approach $5 trillion, fee-based revenue will continue to drive growth in financial advisor practices. The average advisor will derive more than 65% of revenue from fee-based assets.


Prediction #6: As technology-guided portfolio management continues to gain traction, more financial advisors will focus on goals-based wealth management. Model portfolios will influence more than 70% of market assets.


Prediction #7: Asset managers will continue to cut their fees on actively managed products, and a number of firms will do so in an aggressive fashion. The industry will also launch special purpose Institutional shares targeted specifically for IRA rollover sales.



Prediction #8: Distribution resources will be shifted from sales to national accounts teams, resulting in larger national accounts teams and slightly smaller, more streamlined sales teams. Firms will not always replace wholesalers who retire or leave the firm, allowing attrition to reduce the wholesaling ranks by 5% to 10% in 2017.


Prediction #9: Asset managers that invest in more sophisticated data for both marketing and sales will recognize significantly higher wholesaler productivity and marketing effectiveness compared with firms that continue to rely on the metrics that have been available to the industry for years.

Prediction #10: There is more pressure than ever on marketers to demonstrate their impact on business retention and growth. At least 30% of firms will use some form of methodology to analyze cross-channel attribution.

Scale is the name of the game in 2017. Asset managers that have a comprehensive product spectrum with differentiated active and expansive passive, broad national accounts efforts, highly targeted and sophisticated wholesaling, and the guts to make big decisions that could have negative, short-term revenue implications, will be the winners in 2017.