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Product Should Improve Broker Information


Mutual Fund Services, a division of the National Securities Clearing Corporation of New York, will release a new service called Interactive Inquiry later this month. The service will provide mutual fund distributors and other financial intermediaries with instantaneous client account information in a more efficient manner than ever before, according to Rosalie Jenkins, a spokesperson for the National Securities Clearing Corporation.

Currently, intermediaries can only retrieve client account information either over the phone or via a batch system that means up to 24-hour delays in responses, according to Jenkins. Interactive Inquiry will allow them to retrieve information at any time online.

"The Interactive Inquiry service will satisfy a long-standing need in the industry," said Ann Bergin, managing director of Mutual Fund Services. "Mutual fund distributors and other financial intermediary members will be able to enter an electronic query on behalf of a client and, within seconds, call up a wide range of real-time information about any of the participating mutual funds in that client's account."

"The Interactive Inquiry system will greatly reduce the number of phone calls and faxes representatives must now make to the funds about their clients' accounts," said Paul Bucaoto, a product services manager with Mutual Fund Services. "And even if they have electronic access, representatives currently must access a variety of fund and transfer agent systems to get this data on a real-time basis, a fairly tedious, time consuming process."

Several industry executives know about and are anticipating the new system.

"From what I can tell, it should be very useful," said Thomas Iandolo, director of broker/dealer operations at Lord, Abbett, & Company, an investment management firm in Jersey City, N.J. "It looks to be very efficient."

"I think it's a great step," said Nino Palermo, vice president of broker/dealer operations at American Funds of Los Angeles. "I think that that's the way of the future. Interactive real-time data seems to be the way the world is going. It should be extremely useful."

The service was initially developed to respond to industry requests to speed up the retrieval of contingent-deferred sales charge information on a client's account instantaneously, according to the statement. Contingent-deferred sales charges apply when an investor sells fund shares within a specified number of years. It is a back-end load that can vary from account to account, and becomes important information when an investor wants to sell shares carrying these charges.

"Interactive Inquiry will allow firms, for instance Smith Barney, to look at information in a real-time environment that is currently housed on the transfer agent systems at the funds," said Palermo. "Information that the brokers won't have, especially [contingent-deferred sales charge] information. Because the accounting system that tracks all that stuff sits on the transfer agency system, and that the broker wouldn't have access on their own system, Interactive Inquiry allows the broker or financial planner to, literally, press a button which will send a message to the fund company saying What is the applicable [contingent-deferred sales charge] on this account?' We would then return that information for presentation by the broker on their internal system."

The service, however, was expanded to include other information other than contingent-deferred sales charges such as account position, financial history, rights of accumulation/letters of intent, cost basis, pending transactions, and money transfer options, according to Jenkins.

Interactive Inquiry became possible when Mutual Fund Services developed an Extensible Markup Language switch that links distributors and mutual funds, according to Barbara Simon, director of Mutual Fund Services. Extensible Markup Language is a recently-developed computer language built for exchanging data.