Nearly 54% of mutual funds taking part in a Bonaire Software Solutions study on distributor rebate payments said that tracking and reconciliation is their biggest challenge.

While most do track distributor relationships, 44% are still relying on manual processes, and only 18% have an automated solution.

The study shows that more than 44% of the firms polled still use spreadsheets to manually calculate distributor payments. The study also revealed that 46% of the firms polled can’t generate business intelligence reporting across their relationships, with 42% reported having less than five resources dedicated to payouts and reconciliation.

In addition, 15% said they had to process between 500 to 1,000 payments each period, while 11% said they handled 1,000 to 2,000. Another 9% said they had to deal with more than 2,000.

Moreover, 70% of the firms polled said they had neutral to no confidence in the reconciliation of distributor rebate and retrocession payments. The primary challenge, reported by 38% of those polled, involved data management. Reconciliation followed at a close second, with 32% of the polled firms reporting this as an issue. Tracking was reported by 22% of the firms polled.

The study, which polled Bonaire’s existing and prospective client base, found that 32% of the firms polled plan to address their reconciliation process this year.

Bonaire Software Solutions offers revenue management and fee billing platforms to financial service providers and counts 13 of the largest 20 global asset managers among its clients. It markets a system called REVPORT that addresses fund distribution rebates and invoice reconciliation.

Tommy Fernandez writes for Money Management Executive.



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