The Evolution of Transfer Agency Services: Reaching the Many, Not Just the Few
The Evolution of Transfer Agency Services: Reaching the Many, Not Just the Few
October 2019
By Rachel Turner
For asset managers looking to grow AUM, it is clear that scale, not margin, is the most important metric in determining future success. To this end, firms are exploring the most cost-effective ways of launching new products and entering new markets.
But the distribution landscape has changed, requiring asset managers to secure new capabilities to reach and service new customers. Five years ago, managers looking to expand their footprint would have relied primarily on fund distribution platforms as the most efficient route to a mass audience, leaving most onboarding, administration and direct client service interaction to intermediaries.
Today however, things have moved forward. And backward. At the front end, managers see many benefits in reaching directly to the customer, using digital interfaces to offer differentiated experiences and develop long-term relationships across client types. But this direct approach has implications at the back end too. Without platforms, managers increasingly rely on transfer agents to support their growth ambitions, by ensuring user-friendly, timely and responsive interaction.
The Changing Investor Landscape
Millennials and Generation Z are widely perceived as the primary drivers of the growing trend toward digital intermediation. But many institutional and retail investors and distributors are already exploring self-service functionality that enables greater access, control and transparency, whilst also offering cost-efficiencies as traditional distribution costs rise.
To meet these client demands, firms that have not retained or developed such capabilities in-house will need to partner with a transfer agent that can offer breadth of reach as well as depth of service levels and expertise across geographies. Recent engagement on strategic client initiatives suggests three capabilities are critical:
First, managers looking to expand their customer base will need to run multiple funds ranges, across a number of domiciles, while embracing new fund types and asset classes. Partnering with a single provider across a broad range of products and domiciles can help to capture efficiencies throughout the enterprise and support a consistent standard of service for the end-investor, irrespective of product or domicile.
Second, managers need providers that can support all distribution channels and investor types (institutional, wealth, distributors and retail). Whether driven by regulation, technological evolution or changing investor preferences, new requirements are always evolving and need to be catered for.
Lastly, as client experience is increasingly becoming a differentiator, managers will need a provider that can support their ambitions by offering innovative technology solutions that facilitate the kind of comprehensive digital interface that meets specific client needs.
BNY Mellon’s global transfer agency offering has been shaped by these needs. Our integrated operating model handles diverse dealing and settlement methods, administers funds registered in more than 100 markets and supports all major fund types, distribution channels and client segments. Unlike peers, BNY Mellon offers a common platform across funds registered in the UK, Ireland and Luxembourg, providing managers with a single client view and even a single contact point for distributors irrespective of fund range(s).
The central importance of the end-investor experience is recognised in the functionality of our market-leading self-service portal offering, TA Online, designed specifically to cater for the preference of multiple different constituents.
Opportunity to Engage
The opportunities are significant, but many are daunted by the challenge of migrating to a new transfer agent, often fearing negative impact on clients. Such concerns are fuelled by project delays suffered by some managers. However, experienced providers such as BNY Mellon have a strong track record of onboarding new clients on time and on budget. Ease of migration is helped by the open architecture of our technology solutions. As part of our transfer agency offering, TA Online enables our clients to enhance services to their end-investors and to increase efficiency while helping to reduce operational risk.
Technology is now an opportunity for asset managers to re-engage as part of a coordinated strategy across retail, wealth, distributors and institutional market segments. Nevertheless, managers will only succeed in raising their share of retail AUM in the digital age if they can deliver a differentiated experience alongside attractive returns. With the support of a world-class transfer agent, asset managers can combine streamlined back-end processes and relentless front-end focus on customer needs to successfully and profitably serve the many, not just the few.
