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.
Boston Financial’s Creating Future Value series will discuss how we are responding to industry megatrends by moving away from the classic, transaction-driven transfer agent model in favor of a smart servicing model that positions clients for growth in the changing economy.
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Money market reform (MMR), FATCA, Blue Sky, and unclaimed property administration. These are the hot button issues in compliance programs – with every asset manager and intermediary paying close attention to how the changes in the rules will affect operations and ultimately, fund performance.
This is not news.
The classic transfer agent systematically prepares for reform by analyzing system requirements, building operational infrastructure, training staff, and collaborating with clients to ensure they are ready when reforms go live. Also not news. You’ve read dozens of blog posts, participated in several webcasts and advisory meetings, and downloaded pages of content from Boston Financial on these and other regulatory changes. You expect us to be ready for evolution in the environment, and we will be.
But Boston Financial is more than a classic transfer agent. We are a smart servicer. And this means we are also looking at the compliance landscape holistically. We do this so we can anticipate what federal and state regulatory bodies will ask of our clients so we can lay the groundwork for them and minimize opportunity cost to their core business.
Of course, we don’t have a crystal ball, or even a low-budget magic 8 ball, telling us what’s coming down the regulatory pike. But, from our vantage point at the table with industry organizers like the ICI and NICSA, we do know that the “next big thing” that shakes up the industry will likely be driven by regulators’ call for more transparency in order to continue to build consumer trust in the market.
How do we know this? Key provisions of both FATCA and MMR seek to distinguish between institutional and retail account activity with the goal of increasing transparency. Myriad omnibus reforms are trying to shed a light on account detail obscured through the transition to subaccounting by intermediaries. AML beneficial ownership rules clarification? Again transparency as FinCEN and other regulators seek to understand who is benefitting from the movement of monies through the U.S. mutual fund industry.
While Boston Financial doesn’t yet know what will come after MMR, we are confident that transparency is the name of the game. This is why we are laying the groundwork to open a secure data window for clients, making it possible for them to answer potential future questions about account activity and performance. This includes looking closely at underlying account data available to determine what detail is available, and how it might be cleaned and repurposed to serve future compliance reporting needs. In parallel, we are exploring strategies for streamlining the due diligence process through Compliance Corner and enhanced educational programming for fund boards.
The transfer agent industry is often criticized for being too reactive. This is no longer good enough given the intensity of the regulatory push. In looking ahead, we are shortening product and technology development cycles so our clients are prepared for whatever happens next in the compliance space. This is smart servicing in the 21st century.
Read other blog posts in the Creating Future Value series: