JPMorgan Investor Services, PNC and Principal Financial take top honors in Money Management Executive's 2008 Fund Operations Awards. Now in its sixth year, the program honors industry leaders in three categories: Leadership, Innovation and Efficiencies/Streamlining.

We would like to extend a special thank-you to this year's panel of seven judges for their time and consideration: T. Neil Bathon, managing director of PMR Associates and founder of FUSE Research Network; Peter Delano, research area director, securities and investments, at TowerGroup; Ian Frost, senior partner at The Boston Consulting Group; Bob Goldberg, president emeritus of NICSA and consultant with Acadient; Burton J. Greenwald, president of B.J. Greenwald Associates; Charlie O'Neill, principal of Diversified Management Resources Financial; and Kathleen Whalen, managing director, Dalbar.


Tom Hierl, director of U.S. funds taxation at JPMorgan Investor Services, is first-place winner for Leadership. A 20-year veteran of the investment management industry, Hierl has served in this position at JPMorgan since August 2006. In this short period of time, Hierl and his team have overseen tremendous growth, with the number of funds they handle rising from 350 to 850, with $15.7 trillion in assets under custody and $4.4 trillion in assets under administration.

To manage this expansion, Hierl is currently implementing technology to automate processes previously handled manually, including tax provision and returns.

Throughout his career, Hierl has consistently been involved in industry organizations, including the Investment Company Institute and the Massachusetts Society of CPAs.

Larry H. Goldbrum, second-place winner for Leadership, is executive vice president and general counsel at RG Wuelfing & Associates and the SPARK Institute. The SPARK Institute represents 95% of the companies serving 401(k) plan participants and 90% of all 403(b) participants. He is also chairman of the institute's government relations committee and has served on the American Bankers Association Council on Retirement and Employee Benefits and the American Bankers Association Retirement Services Conference Board. As an industry leader, he worked with the Securities and Exchange Commission in developing Rule 22c-2 and other initiatives, including fee disclosure, fair funds settlement payments, a sample information-sharing agreement and a guide for requests for information for 403(b) plans.

Goldbrum previously was chief risk officer and senior vice president of Wachovia Retirement Services.

Receiving third place in the Leadership category is Keith F. Hartstein, president and chief executive officer of John Hancock Funds, which oversees $54.1 billion in assets under management. Hartstein rose to this year's incredible liquidity challenges for auction-rate preferred shareholders in John Hancock's closed-end funds. Working relentlessly with the fund company's board of directors, senior management, the Investment Company Institute, the Securities and Exchange Commission and the Federal Reserve, Hartstein was able to find ways to provide investors uninterrupted liquidity.

"Restoring liquidity to shareholders of our auction-rate preferred securities has been our goal ever since the industry-wide auction failures began on Feb. 13," Hartstein said.


PNC is first-place winner, Innovation, for its ADVISORport unified managed account platform. Web-based, customizable and available for sponsors to white label, the secure online platform allows financial advisers to make timely changes to clients' portfolios on an ongoing basis, eliminating processing concerns and investment delay risks. Thus, the UMA account is streamlined and can be offered to a broader client base. By improving service to advisers and clients, it provides investment firms a chance to acquire more assets and generate higher revenues.

As PNC noted, "The market has validated this innovative technology, with our assets serviced tripling since 2004, from $25 billion to $82 billion today, and the account base growing four-fold from 78,000 to 312,000." Clearly, ADVISORport is a key component of PNC's $100 billion managed accounts business.

JPMorgan Investor Service's Exchange-Traded Fund Product Development and Operations Team is the recipient of second place, Innovation. Recognizing the increasing popularity of exchange-traded funds, the team expanded its platform so that its clients could offer not just equity ETFs, but also those that invest in fixed income, enhanced indexes, inverse indexes, enhanced inverse indexes, international and emerging markets, derivative products and 130/30 strategies. Of particular concern was the ability to offer clients shortened settlement, cash settlement, customized intraday valuation, cash component forecasting, restricted securities implications and cash in lieu of processing.

Over the past year and a half, JPMorgan has increased its ETF servicing business by 205% and increased its revenue by 280%, to serve 104 funds with more than $52 billion in assets in more than 30 markets.

The third place for Innovation goes to BNY Mellon Asset Servicing for expanding its exchange-traded fund servicing beyond fund accounting, administration, custody and transfer agency services to include automated basket creation and dissemination, and order-desk services. These technologies have added 800 basis points of operating leverage by significantly reducing the headcount to service ETFs. It has also led to an 80% win rate in new business opportunities. All told, this is driving a top-line revenue growth increase of 40% year-over-year.


Principal Financial is first place winner for Efficiencies/Streamlining. The firm is being recognized for automating and centralizing multiple fund administration processes on a single platform called Unity. This eliminates error-prone manual processes and spreadsheets for clients, while giving them the opportunity to reuse the same data for multiple reporting purposes.

Notably, this reduces the time it takes clients to issue financial statements by 25%, a fund's holdings reporting cycle from 20 days to five days, and the time it takes to create a document by 50%. Conversely, clients' financial reporting capacity increases by 30% without expanding staff, and they are able to conduct compliance tests daily, while avoiding the 14-fold increase in payroll costs otherwise required with manual methods.

Taking second place in Efficiencies/Streamlining is John Hancock Signature Services' Correspondence Department. Following an increase in investor communications and a decline in quality ratings on external benchmarks, John Hancock formed the department to centralize all outgoing correspondence and realize efficiencies by creating "straight-through" correspondence from a data bank of standardized pre-formed letters. This proved to be fruitful, resulting in a faster turnaround on letter production for both internal and external customers, a 20% increase in productivity, a 15% reduction in staff and a 10% increase in external quality benchmark ratings.

Having automated more routine questions, approximately 40% of customers' correspondence, the team can now focus on more sensitive and complicated customer inquiries.

The third-place winner for Efficiencies/Streamlining this year is AccessData's SalesVision Distributor Compensation. Part of Access Data's enterprise sales reporting applications, Distributor Compensation is a first-of-its-kind solution that enables mutual fund companies to automate and streamline their compensation process for internal sales staff and external distribution partners, including advisers and administrators. The platform allows clients to apply their proprietary wholesaler compensation rules and sales plans, with calculations based on gross sales, net sales, asset growth or average assets.

The financial analysis dashboard enables finance executives to track real results against revenue and business plan projections and quickly analyze revenue by product type, distribution channel or line of business.

(c) 2008 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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