Commission and Expense Management: Asset Managers in Control

March 8, 2004

Abstract

Boston, MA, USA March 8, 2004

Asset managers face new challenges today as regulatory authorities and investors increase pressure for transparency. The question for most asset managers is not whether to meet with these new obligations, but how. Systematic tracking, budgeting and reporting of third-party relationships, and commission and expense management require the support of technology. A new report from Celent discusses a comprehensive solution that addresses these issues: Eze Castle Software’s Commission Optimizer.

In this report, Celent profiles two financial institutions using the solution and explores how this solution meets today’s challenges in commissions and expense management. The report summarizes Commission Optimizer’s features and functionality and discusses how specific features help clients meet fiduciary responsibilities, either regulated or implied, how the solution improves end-client satisfaction, and how it aids with internal controls and budget decisioning.

"Today’s headlines are the asset management industry's wake-up call for greater transparency and accountability. This is not about pointing fingers and assigning blame. This is about the reputation of an industry and the many, many firms with solid integrity who must rise to the forefront and respond proactively. It is the only way to re-establish trust with investors," said Denise Valentine, Celent analyst and author of the report.

Greater transparency and accountability is achieved through:

  • Establishment of internal controls for centralized tracking, reporting and review
  • Disclosure of vendors, counterparties and non-competitive information
  • Explanation and reporting of how clients benefit from specific services
  • Creation of a formal soft dollar committee with multi- functional representation
  • Substantiated, ethical use of the soft dollar arrangement, and adherence to the spirit and letter of the law insofar as the services must directly and clearly benefit the investment process

Because commission management is so tightly linked to cost control, operational maintenance, traders’ execution, the success of the investment process and, ultimately, client satisfaction, the commission management process be precise, proactive, and all-encompassing. Industry discussions and regulatory evaluation require on-demand reporting to be thorough and accurate, and to provide full disclosure.

A is available online.

of Celent Communications' Retail Securities & Investments and Institutional Securities & Investments research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA March 8, 2004

Commission and Expense Management

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 5
  Commission and Expense Management Process 5
  Contract Management 5
  Commission and Expense Tracking and Budgeting 6
  User & Usage Oversite 7
  Trade Allocation 7
  Service Evaluation 8
SOFT DOLLAR AGREEMENTS 9
COMMISSION OPTIMIZER

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