Category: Creating Future Value, Industry Trends

The Impact of Megatrends to the Transfer Agent Model


Thought leadership is more than marketing jargon at Boston Financial. What really matters is what we are doing to adapt to changes in the industry, not just what we think 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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The classic definition of transfer agent focuses exclusively on shareholder recordkeeping, transaction processing and phone servicing. Analysis of industry megatrends tells us that this definition is no longer sufficient to capture the value transfer agents must provide to clients in order to provide them with an edge in the market.

Industry Megatrends

Research by industry experts like KPMG, ICI and Deloitte, along with extensive interviews with our clients; have made it clear that there are several megatrends shaping our industry. These include:

  • Rapid evolution of technology: Changing the way we live and work, technology continues to be an enabler and a disruptor.
  • Changing consumer behaviors and values: Technology evolution and changing demographics have led to empowered consumers who demand easy access to information and deeply personalized experiences.
  • Demographic stressors: With over 50% of the mutual fund assets, baby boomers are moving into retirement and asset managers are focused on retaining assets and sufficient return. Millennials represent only 5% of mutual fund assets. How can they be converted into mutual fund investors?

It is likely you have heard these trends before. Boston Financial has gone one step further and analyzed how these trends will likely impact the way we do business.

Guided by more than 40 years of industry experience, Boston Financial has concluded that the transfer agent of the future needs new product solutions and continued operational innovations in order to meet expected client challenges:

  • Shifting compliance and regulatory environment: Given the pace, pervasiveness and complexity of the regulatory environment, our role is to ensure we are staying ahead of regulatory issues and preparing for implementation and compliance on behalf of our clients – in both the retail and intermediary space. The regulatory environment is one of the top challenges – if not the #1 – for mutual fund companies.
  • Empowered consumers with high expectations: There is a high demand for mobile, web-based self-service across all demographic groups. But, consumers want access to both tech-powered investing solutions and the human touch. We need to ensure our clients’ consumers – shareholders and intermediaries – have the optimal experience through our contact center interface.
  • Leveraging the power of data: Data analytics is an industry buzz phrase – everyone has to have it, but few really understand what it means. The transfer agent is uniquely positioned to help clients gain valuable insights about investor and intermediary trends and behavior, while addressing complicated issues of data ownership, strategy and security.

These challenges do not spell the end of the transfer agent function in mutual fund processing. In fact, as more investors enter the market place, volumes are increasing. What is changing is the complexity of the work and expectations about the way work is managed.


Smart Servicer: The transfer agent of the future

In order to make the transition from classic transfer agent to smart service provider, transfer agents must expand digital capabilities, accelerate technology development cycles and adjust both the staffing model and professional development programs to ensure staffing teams have the optimal mix of technical, analytic and operational professionals serving clients and intermediaries.

The pursuit of alpha has contributed to the development and introduction of complex products that tend to have lower volume and higher risk. With this increased risk profile, transfer agents must invest in people and technology to ensure they deliver the highest level of quality and mitigate risk, without compromising the standardization and scalability that are chief advantages of the classic transfer agent model.

Finally, a more consultative and collaborative style is needed with clients. The transfer agent of the future must be prepared to demystify new regulations, data presentations and digital advances in order to help clients on their road to success.

We believe that what really matters is what we do about the challenges facing the industry, not just what we think or say about them. Boston Financial’s Creating Future Value series will bring experts, like Chief Compliance Officer Craig Hollis; Managing Director of E-Business Solutions Brian Melter; Managing Director of Investor Services, Trish Crockan; and Managing Director of Transfer Agency Services, Tracy Shelby to discuss how we are taking action on these and other challenges today to create future value for our clients and the mutual fund industry.


Read other blog posts in the Creating Future Value series:

Prepared for Whatever Comes Next: Creating future value in compliance programs

Have It Your Way: Meeting the Needs of Empowered Consumers

Looking at the Big Picture: Leveraging the power of data

Facing Industry Challenges Together

Anne Hebard-Duduch

Anne Hebard-Duduch

With over 25 years in financial servicing, Anne Hebard-Duduch has extensive experience in all aspects of retail and institutional servicing functions, including: relationship management, operations management, transition oversight, sales and marketing, and product development. Anne recently led product development at Boston Financial, providing innovative, market-driven solutions. This resulted in several new business lines, including: a digital strategy offering, a financial intermediary oversight solution, and an expanded suite of compliance solutions. Anne currently plays a lead role in managing one of DST's largest and most complex conversions involving one of the industry's largest asset managers. Anne supports DST in the transition of the asset manager's in-house transfer agent platform to the TA2000® platform with operational and relationship management expertise. Anne is a board member of the National Investment Company Service Association (NICSA), member of United Way Women's Leadership Council, and an active participant of industry conferences. Anne holds a BS from the University of Massachusetts and an Executive Diploma in Strategic Direction and Leadership; Certified Management Institute, United Kingdom. Anne's three teenage sons keep her on her toes, and together they enjoy skiing, boating, and her attempts at playing golf.


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