In May 2009, Broadridge Financial Solutions, a leading global provider of technology solutions to the financial services industry, acquired Access Data Corp. Access Data provides enterprise-wide reporting and data management services to asset managers and financial intermediaries. Its technology platform, Access Data SalesVision®, is currently utilized by more than 40 firms to support distribution, administer wholesaler compensation and distribution payments and manage shareholder compliance.

Money Management Executive recently sat down with Gerry Scavelli, president of Broadridge's mutual fund solutions division, and Dan Cwenar, general manager of Access Data, to discuss the impact this new partnership will have on the mutual fund industry.

MME: Why did Broadridge acquire Access Data?

Scavelli: Broadridge's position as one of the largest processors of investor information for broker/dealers and other financial intermediaries has enabled us to create value for our mutual fund clients as well. Today, through our investor communications, securities processing, and securities clearing and outsourcing services, we maintain some of the most comprehensive information about mutual fund sales made by distributors in the industry. Access Data gives Broadridge the opportunity to present the information we already capture about the sale of mutual funds, exchange-traded funds and variable annuities and solve an important problem in the financial services industry: the lack of data transparency.

Access Data's SalesVision technology platform provides visibility about the financial advisers who are driving sales and transforms data into meaningful information that can be used to build business strategies. In addition, Access Data's Software-as-a-Service (SaaS) approach enables clients to cost-effectively tackle an array of complex business challenges in distribution, compensation management and shareholder compliance.

We believe Access Data has the technology, creativity and talent to add a new dimension to Broadridge's overall information servicing capabilities.

MME: Can you elaborate more about this strategy?

Scavelli: What mutual funds want most in a volatile market is to retain clients and continue to grow their business. Broadridge can provide fund firms with deeper knowledge of their best clients and market intelligence about new opportunities to help grow their business.

Today, the vast majority of all new fund sales are made through the financial advisers affiliated with our distributor clients. With the acquisition of Access Data, Broadridge is now positioned to deliver detailed sales information that fund companies have never been able to see in the past, especially in areas related to ETFs, variable annuity sales and their defined contribution investment only businesses.

Broadridge intends to be the central hub for acquiring, aggregating and augmenting the sales data that is so essential for mutual fund manufacturers and distributors to achieve their respective growth objectives. In the same way that Broadridge gained a reputation as a respected services partner for the brokerage community for their proxy, post-sale prospectus and other regulatory needs, we now have a unique opportunity to extend our value to fund companies and distributors by transforming the data from our current intermediary relationships into market intelligence.

MME: You just mentioned "market intelligence." There's a lot of buzz about providing "intelligence" to the market right now. What do you mean by that?

Cwenar: We think of "market intelligence" as the information and tools that asset management companies will need to not only survive, but also actually thrive in a business environment that is demanding they achieve "more with less."

Today, and in the future, fund firms will need extremely good control and command over information about both their sales and their competitors' sales for all products and distribution channels. Companies will need to know more about their clients based upon transactional activity and asset position changes at a very granular level. And, when performance is a concern, they will need to anticipate the impact to those clients based upon the latest data and information, and be able to get out in front of the issues quickly.

We anticipate more information-based relationship management and selling processes will be critical to support evolving selling models such as hybrid wholesalers. The winners will be those firms that approach sales in a much more analytical fashion. Fund companies need to harness all the data they have on clients across multiple trading platforms and sales channels and then have a means to transform it into quality information that can drive sales activities.

The transformation of data into market intelligence will drive these new business models so that sales organizations, including hybrid wholesalers, are focused on the best firms and affiliated advisors who can grow their business.

MME: Given this opportunity, how do you see, for example, helping a mutual fund company?

Cwenar: Getting your arms around current and reliable data for mutual fund sales through financial intermediaries has always been an uphill battle for the industry. Salespeople have perennially cried out for more and better information about their clients and prospects so they could gain an edge to sustain and grow relationships. We can help wholesalers gain insight into the independent financial adviser and RIA market to support different business needs with the right mix of products and service.

Through our new relationship with Broadridge, we are opening new windows of information for other investment products sold today. For example, Broadridge currently works with all major distributors in fast-growing areas such as ETFs, variable annuities, and retirement sales from defined contribution platforms. While many mutual fund companies are struggling to understand these market opportunities, we know how, where and when these sales occur, and which products are most successful because of our core business.

Scavelli: And, we're providing more than increased transparency to the underlying sales data and transactions. We can deliver market intelligence that will help the distribution side of the business align sales resources and allocate marketing expenditures to improve return on investment.

What sets Broadridge apart is that we're now positioned at the center of this industry issue with a complete end-to-end offering. We combine critical sales data with unique technology tools that can analyze and transform it into a valuable asset to segment and target clients. We can also integrate this information with marketing fulfillment and communication services tailored to a specific adviser segment so that the fund company can immediately act on this information. And then we can complete the cycle by measuring a program's effectiveness.

MME: What are some of the other challenges that you feel this new relationship will help solve?

Cwenar: As the evolution to omnibus accounting continues and more broker/dealers sub-account individual investor positions, visibility to sales data is actually getting more muddled. At the same time, distribution channels are rapidly changing, and financial advisers are moving to new firms. These challenges are difficult for fund firms to manage in-house as staff is reduced and technology investment is stalled.

Broadridge and Access Data's integrated offering provides an outsourced solution that can streamline time-consuming data management and complex operational processes that support distribution, compensation and shareholder compliance. We can deliver critical information to the fund company to manage its business cost-effectively while providing a clearer market view of: products beyond traditional mutual funds; Fast-evolving market segments; and changes within the traditional distribution power structure.

We can show fund firms how their sales efforts are performing relative to the industry, and where their best opportunities lie with current clients and new prospects from a universe of thousands of firms and hundreds of thousands of financial advisers.

MME: How does Access Data fit into Broadridge's business model?

Cwenar: It's a great fit. Both companies share a common business model and focus. We also have mutual objectives for our companies and our clients. We eliminate the need for clients to manage complex technology to run their businesses. Broadridge's investor communications, securities processing and clearing and outsourcing solutions help reduce the need for clients to make significant capital investments in their operations infrastructure. Similarly, Access Data's distribution, compensation management and compliance solutions utilize a Software-as-a-Service (SaaS) delivery model. There's no hardware or software to install, so clients run their business with groundbreaking solutions that require minimal resources and financial commitment.

Scavelli: More importantly, we are committed to this business model and the opportunities it affords us to become the market leader in the information business. We see the market shifting from merely processing data to harnessing and transforming it into high-value information. And our firms' cultures are very much alike in that we are very passionate and enthusiastic about our ability to achieve success for our clients.

MME: How can technology impact the industry? What role will technology play in providing better information to manage business growth in the next two to three years?

Scavelli: Innovative and dynamic data management technology will be the key to delivering good, clean and complete information about sales intermediaries. We see the smarter firms recognizing that deploying this technology will not only provide competitive differentiation, but it will power the strategic direction defining their future business success.

We think that the timing of this acquisition coincides with a clear understanding and movement in the marketplace toward outsourcing to economize, while also improving the quality of information. These objectives, although seeming contradictory in nature, are the basic values that our respective clients derive from our services.

MME: Any plans in the works right now?

Scavelli: You'll have to come to our client conference at the Waldorf Astoria in New York on November 18-19 to see for yourself. We'll be demonstrating to our clients how we're combining our data and technologies to create the next generation of market intelligence.


(c) 2009 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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