Category: Industry Trends

Distribution. Servicing. Compliance. Analytics. Competition. Where do they stand in 2014?

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Kicking-off the New Year, we thought it would be timely to invite some of our senior leaders at Boston Financial to reflect on the key trends and issues affecting the fund industry.  Over the next several weeks, we will use this blog to dive deeper into these trends, and the questions they raise for our clients.

There was a high degree of consensus on what these trends are and what they mean for the operations of fund companies.  Topping the list are (1) an intense regulatory and compliance environment; (2) shifts in product distribution channels; (3) increasing interest in fact-based, analytical decision-making; (4) changing shareholder and advisor behaviors; and (5) an increasingly competitive market environment.

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We will explore each in greater detail in future posts, but for now we have briefly highlighted the drivers of these trends and some of the critical questions they raise for fund operations:

  • Stepped-up Regulatory and Compliance Oversight – the regulatory environment has become increasingly complex at both the state and federal levels.  The intensity and scope of government scrutiny on the industry is increasing; this is likely to gain further momentum in the years ahead.  We’ll explore how fund companies are minimizing risk and ensuring compliance in today’s environment.
  • Shifts in Product and Service Distribution Models – third-party financial intermediaries will continue to influence how fund products and services are distributed to investors. We will explore how this has impacted fund families from a fiscal, regulatory oversight and shareholder servicing perspective.
  • Movement Toward Fact-based Decision-Making – the trend of using analytics and “big data” to drive core decision-making is making its way into the fund business.  Our review will take a look at how the industry is looking to capitalize on the use of advanced analytics by leveraging data to evaluate and influence consumer and advisor behaviors and expectations through mature, informed insights.
  • Changes in Consumer and Advisor Behaviors / Expectations – mobile and social technologies have effectively created a new buyer / seller environment involving highly customized services and functionality.  We will dive into the new priorities exhibited by investors and advisors that emphasize access, delivery, and experience; we will also highlight the importance of continuity across all platforms.
  • Increases in Market Competition – new product entries such as hedge funds, active/inactive ETF index funds, global markets, and regulatory and infrastructure costs have dramatically altered market opportunities and  the cost of doing business. We will delve into the rise of these alternative products; and examine what fund companies look for in growth opportunities and long-term partnerships.

This series is intended to both share our perspective and create a dialogue around the drivers and impacts of these trends on our industry.  We look forward to your feedback; stay tuned for the first entry of this series!

 

Nick Darsch

Nick Darsch

Nick currently serves as a Senior Sales Executive for Boston Financial’s suite of Asset Manager solutions. Nick is focused on building relationships, aligning with enterprise partners and expanding the footprint of the firms core transfer agency, shareholder servicing, distribution enablement and compliance services. He joined Boston Financial in 2012, spending 2 years as the Manager of the firm’s Global Relationship Management program, directing strategy and business development efforts with the firms largest and most complex mutual fund relationships – along with State Street, DST and international sister firm, IFDS. Prior to Boston Financial, he served as an Enterprise Business Systems Consultant with Deltek, where he primarily consulted for public accounting firms and global advertising agencies. Nick holds both an MBA and B.S. in Economics and Finance from Bentley University. Nick currently serves as the Fundraising Chair for the United Way LINC Executive Council and Business Development Chair of the Young Professional’s Expect Miracle’s Leadership Team.

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  1. Justin DeekenJustin Deeken

    I am interested in what Boston Financial is working on gaining from Big Data. What insights are we focusing on uncovering, and how do we want to turn the insights gained into additional profit. Are we going with DST’s work on Big Data, or do we have our own teams at Boston Financial looking at the data collected?

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    1. Nick DarschNick Darsch

      There are a lot of exciting things going on right now at Boston Financial and DST with regards to Big Data. DST recently formed the Global Insight Group, which employs a team of data scientists charged with developing ‘big’ data-driven solutions for our enterprise. The asset management industry is one of the early focuses for this group. Arthur Dunn recently joined the GIG team at DST (from Boston Financial) to help develop big data driven products and services that focus on the transfer agency environment. Stay tuned over the next couple of weeks for look deeper into the Big Data opportunity.

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    2. Arthur DunnArthur Dunn

      Boston Financial is aligned with DST’s Global Insight Group (GIG) which is putting in place the infrastructure necessary to support robust use of ‘Big Data” and has hired the data scientists and mathematicians who can deliver Analytics. I have been tasked with working with GIG to represent the interests of Boston Financial’s businesses and clients in the development of products and services using data analytics. I will be leveraging our business leaders, the Business and Product Development Team, input from associates like yourself and, obviously, input from our clients to identify business use cases to evaluate and ultimately turn into products.

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  2. Anton Kozlov

    Great point about fact-based decision-making, Nick. Following up it, not only is data analytics being used increasingly to influence consumer/advisor behavior, but big data management/analytics is starting to be viewed as a tremendous cost-cutting tool which can directly affect the bottom line for players in the fund industry. Case in point, I have personally been involved in a firm-wide data automation project at a financial company dealing with large amounts of fixed income bond data, and the results have directly reduced the number full-time resources who were managing that same data manually. If a human can perform a consistent, daily task, most likely it can be scripted to a computer. Rather harsh reality, but the trends don’t lie.

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