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Comprehensive Data Key to Actionable Account Aggregation


The independent broker/dealer marketplace now represents the fastest-growing distribution channel for providers of mutual funds, variable annuities and other packaged investments. Of the various distribution channels, independent intermediaries also represent the most direct-to-fund business.

Independent intermediaries, in turn, rely on their product providers to deliver technology solutions that help them efficiently sell and service their accounts. In this environment, more providers than ever before have chosen to make their shareholder account information available to hundreds of thousands of independent intermediaries through a single account aggregation portal. In doing so, they have set the stage for new possibilities in distribution support.

Management companies courting the independent market cite a number of key reasons for choosing to make their shareholder account information available for sales and servicing through one primary portal.

Participation and usage. Much as it makes sense for real estate brokers to list their inventory on a single, large-scale multiple listing service, so does it make sense for management companies to make shareholder account data available through the aggregation tool representing the largest number of management companies and relied upon by the largest number of independent intermediaries.

Supported products. Similarly, it makes sense for management companies to make their information available on a portal that supports the broadest range of products that these intermediaries sell, from mutual funds and other tax-advantaged savings vehicles such as 529s and 401(k)s, to variable annuities, real estate investment trusts and other investment options.

Innovation and functionality. A major reason for management companies to participate in an aggregation portal is to help reduce fund servicing expenses.

To that end, they rely on a portal with a long history of providing innovative business tools that enable intermediaries to efficiently manage accounts while reducing their reliance on the management company's back office. Self-servicing innovations such as providing access to electronic shareholder statements, downloadable by book of business, provide efficiencies to intermediaries while reducing management company costs.

Yet access to shareholder information and a host of other features is meaningless unless the underlying data that the aggregation tool provides is of the highest quality and integrity. Data must be comprehensive, real-time and easy to access. Management companies and their intermediaries have come to understand the value of servicing tools that have seamless integration with the underlying transfer agency or recordkeeping system.

Rich, comprehensive data enables intermediaries to effectively manage their customer relationships and overall book of business. With integrated information, intermediaries can initiate transactions and conduct the detailed research that can be so costly in a phone environment. Sophisticated portals provide advanced account management functionality such as enabling intermediaries to group individual accounts into customized client portfolios to truly reflect the way they organize their customer relationships.

Deep integration also ensures that as recordkeeping technology advances, participants of the aggregation portal benefit. When the vast majority of the independent intermediary marketplace participates in a single portal that supports the vast majority of their business, management companies can leverage the portal's infrastructure to offer distributors more efficient access to other areas of the recordkeeping relationship.

An illustration of this can be found in the call center environment, where management companies respond directly to intermediary inquires. Tools such as biometric voice verification and computer telephony integration continue to evolve to enable callers to "authenticate" their identities using their voices. Soon, these tools will combine with the online portal's intermediary authentication process, as well.

Intermediaries calling a product provider will soon be able to utilize their portal ID as their unique identifying information, which will secure access to their specific book of business. This transfer agency-based solution removes a potential data security issue that can exist in a call center when trying to validate the identity of and access available to an intermediary.

Account aggregation portals provide a wealth of investment information and ancillary business tools. Possibilities for expanding access to new investment products and providing additional features are wide open. But the value of these new capabilities is limited unless the core product information is comprehensive and integrated.

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