Check & App is Great! (Till It Isn’t): Webinar Replay


In this recent panel discussion, the audience learned how one introducing broker/dealer that had been chiefly concerned about the impact of the proposed fiduciary rule on direct mutual fund accounts ended up solving many additional challenges that those accounts pose by taking a centralized approach.   In the discussion, you will hear a Paul Osterheld of Basecamp Strategies moderated panel of Monica Daggs, Chief Administrative Officer of CUSO Financial Services, Ian Martin, Executive Vice President of U.S. Bank Global Fund Services and Kelly Lynch, Senior Vice President of Envision Financial Systems discuss the economic, business and compliance benefits of centralizing fund-only accounts.

An executive summary of the discussion is available here.


Moderator:  Paul Osterberg, Basecamp Strategies

Panelists:  Ian Martin, Executive Vice President, U.S. Bank Global Fund Services. and Kelly Lynch, Senior Vice President, Envision Financial Systems, Inc.

The following text is a transcript of the webinar, Check & App is Great! (Till it Isn’t) held on June 13, 2018.

John Gray, Senior Vice President, Envision Financial Systems: Thank you for joining our webinar, Check & App is Great, Till it’s Not: The Case for Centralizing Fund-only Accounts.

Before we get started, a few housekeeping items. The webinar is being recorded and we will send you a link to the recorded session in the days after the webinar’s conclusion. We encourage you to share the recording with your colleagues. If you could take a moment to mute your phones if they are not, that would be helpful and help eliminate background noise.

And then lastly, if you have any questions during the webinar or the presentation, please use the chat window in the lower right-hand corner of the GoToMeeting control panel to send a message to the meeting organizers. You’ll note that the default chat setting is to everyone, so you will need to change this by selecting organizers from the drop-down menu before hitting the send button.

Lastly, time permitting, your phone lines, they’re not muted, but we may open up the panel to questions that you may not have submitted via the chat. With that, I turn the discussion over to our moderator Paul Osterberg, Strategy Basecamp. Paul?

Paul Osterberg, Co-Founder & Managing Director, Strategy Base Camp: Thank you, John. I appreciate it. I see some familiar names on the call, but I’m going to go ahead and introduce myself. So about five years ago, I started a firm called Strategy Basecamp. It’s a firm that focuses on helping firms like yours optimize the use of technology to improve your operations and manage cybersecurity.

Ten years prior to that, I worked in small, medium and large financial services organizations and running operations and technology specific to introducing independent broker-dealers over the recent decade, the complex web of relationships have developed as it relates to operationalizing and managing fund business.

Today the folks on the call that we’re going to introduce shortly, are going to introduce themselves, talk about how they have used FundKeeper to not only make their organizations more profitable, but also just operationally streamline work and of course become more regulatory compliant.

On the call today we have Monica Daggs, Kelly Lynch and Ian Martin, and in that order we’re going to go ahead and introduce ourselves. Monica, tell us who you are and your relationship with FundKeeper.

Monica Daggs, Chief Administrative Officer, CUSO Financial Services: Thanks Paul. Hello, my name is Monica Daggs. I am the Chief Administrative Officer for CUSO Financial Services and we have a couple of broker-dealers that have decided to use the FundKeeper service to really get us a better solution for our Check & App business, for mutual fund transaction business, which I’ll go into in a little bit.

A little bit about me, I’ve been with CUSO Financial Services for the last 13 years and primarily in operations and compliance roles.

Paul Osterberg:  Thanks Monica. How about Ian?

Ian Martin, Executive Vice President, U.S. Bank Global Fund Services: Okay good afternoon everyone. I’m Ian Martin, Executive Vice President for U.S. Bank Global Fund Services. My various responsibilities, I oversee transfer agent investor services operations for more than 250 investment adviser clients and we support over four and a half million end clients.

And from a FundKeeper perspective, I’ve lived and breathed all the operational and client servicing challenges my entire 25-year career. I’m just really excited to be able to offer a product like FundKeeper that addresses the operational challenges broker-dealers and their RIAs are facing today.

Paul Osterberg: Thanks, Ian. And Kelly?

Kelly Lynch, Senior Vice President, Envision Financial Systems: Thanks, Paul. This is Kelly Lynch and I’m Senior Vice President with Envision Financial Systems, and I’ve worked in the shareholder record-keeping space for about as long as Ian’s been in his space. And these days I spend the bulk of my time talking with broker-dealers about how to streamline their Check & App processing.

Paul Osterberg: Super. Well we want to make this come alive and be real for you. So we’re going to start, I’m going to tee up some questions for each of the panel. And we’re going to start with Monica, a user of FundKeeper, somebody that has leveraged FundKeeper from a business case perspective.

Monica, the other day you were talking about Check & App is great and then it’s not so great anymore. Can you elaborate a little bit on that? And then specifically kind of getting into the business and economic benefits of FundKeeper.

Monica Daggs: Absolutely. So we, just a little bit about our firm. So we are, in tracing broker-dealers in the recent days, mostly is credit unions and broker, and small city banks. However we function as independents and our advisers function as independent advisers, and we have had an open architecture over our existence.

And over time for Check & App business, we have built this business and spent a lot of time and resources to build an internal system to allow our advisers to continue to do direct business – direct mutual fund business with the fund companies. And while that’s challenging for a couple of reasons which I’ll get into that, we initially came to the platform when the Department of Labor fiduciary rule came out.

Look, we really need to get a better handle on this. We have a good sense of what our Check & App business is, but the DOL is going to force our hand to tighten our protocols if you will. What we found is that over time or through the implementation, we found a lot of other benefits, not just for the DOL which parts of it have remained, others have not. But what we did is we ended up spending so much time and resources building the functionality to continue to allow our advisers to do that business, direct business.

What we found from our advisers and what we heard from them is that they love the convenience of direct business from, mostly not from a convenience really, but from a low-cost structure. So many of our advisers would get familiar, much as yours, with one or two fund families, and that’s what they would sell because they would get familiar with their account applications and their process, and that would become easy for them. And it was pretty low cost as opposed to a full-service brokerage account which had the convenience of a single account where you could buy multiple fund families, there’s typically less paperwork, that the account application in that process is a little less than having to do that plus a direct business account application. But the challenge is that was more expensive.

So being an innovative firm, we wanted the best of both worlds and we came across the solution with Envision and U.S. Bank called FundKeeper. And what it has allowed us to do is to take the convenience of an omnibus full-service type brokerage account, but have the lower cost structure of direct business. And it’s also allowed us to, by being on a consolidated platform like that, keep pace with the technology. I think many of our firms are struggling with technology budgets at the same time as regulatory budgets, and being able to offer things like remote check capture, online completion of an account opening process, timely consolidated account reporting. The data fees that we were getting from direct business in some cases were delayed weeks, and that’s just not acceptable to clients and advisers anymore. So we wanted the benefits of both of those worlds.

The other thing that was important to us is to make the transfer process of existing positions onto the platform easy for advisers. Because unless we make it easy for them, they’re not going to be, easy and inexpensive, our advisers typically don’t adopt it.

So the status quo really wasn’t a viable option for us anymore and we came to the solution to try and build the best of both worlds really.

Paul Osterberg: Thanks, Monica. Hey and just a quick, as a facilitator one thing I’m going to ask is if you’re not speaking, if you could mute. Because we do have a heavy breather on the phone, as I’m sure most everybody can hear. So if you’re not speaking, please mute. We can hear somebody either in the wind in the background or heavy breathing. Much appreciated.

Monica, anything else to add there in terms of operationalizing things? We’ll definitely come back to you later in the call. Otherwise we’ll move on to Kelly. Anything else Monica?

Monica Daggs: One more piece that I wanted to mention is it was important for my firm and the firms that we represent to own the adviser experience and to have a single consolidated experience for account opening as well as how accounts are presented. And so that was another benefit of having all of the mutual fund direct business in a consolidated account. It gives us a better point to be able to control that process and have a great experience for our advisers.

Paul Osterberg: Outstanding. Thanks, Monica. We’ll definitely come back. Kelly, how about talking a little bit about the case for centralizing this complex network of business that’s still in each of our firms over the last 20 years or so?

Kelly Lynch: Sure and we can hit that, do we want to hit Ian with the operation side? Or do you want me to jump to the compliance side?

Paul Osterberg: No, let’s go with Ian. Yeah Ian, you’re up.

Ian Martin: Okay well as I said, having spent 25 years of my career working in various management roles within banks, brokerage, trust, investment advisers, etc., I really found the secret for success is to solve operational challenges at the same time as you’re improving service to the end customer. And that’s what is so exciting to me about being able offer FundKeeper.

As Monica mentioned, you think about the rep and the customer experience. When the RIA meets with that customer and they want to invest in multiple fund families, what does that mean? You’re investing in multiple forms, you’re writing out multiple checks, you’re receiving multiple statements and confirms. You have to sign up for multiple websites. Either the RIA or the clients mailing multiple applications and multiple forms to either the back offices or the end fund complex. Now as you can appreciate, that doesn’t sound too efficient and it certainly doesn’t create a great customer experience.

And what FundKeeper does now, is now RIA meets with clients, they are, as Monica mentioned, set up with one account. They can invest in as many fund families as they want to. Again single account. They can set this account up online, electronic signature capture, they receive one statement with all of their mutual funds represented, they have one website to see all of their holdings. Electronic check capture, I mean how cool is that? Who wants to be mailing checks nowadays? That’s just not what I call sexy anymore. So much more efficient process for the registered investment adviser and significantly better process for the end customer.

Now I’m going to move on a bit now to the efficiencies of the broker-dealer back office. You think about what they’re dealing with; many of the same things I just explained. But now single platform, they have transparency to all of their clients’ mutual fund assets on this single platform. And they also gain a number of efficiencies. And I’ll mention a few. Single source for commissions. I believe there’s close to 900 mutual fund companies out there in the industry.

How would you like to get commissions from, even if it’s a fraction of that 900? Now all commissions come in single source. They have the ability online to set consistent rules across all funds, they have the ability to block certain funds from being purchased or set parameters online for suitability. And this is where I really think it adds value and Monica mentioned as well, it’s a one-stop shop to address operational issues. When things don’t go as planned and we know that registered investment advisers don’t always pay attention to the intricate details that are necessary in establishing accounts.

So when things don’t go as planned, we call them NIGOs, not in good order. The ability to immediately address these instances versus having to send things in mail and overnight, etc., certainly adds a ton of value. And last but certainly not least, the industry is one where reps will move on and they’ll take other opportunities, they’ll move to other firms. I know of firms that basically have full-time jobs for individuals to manually go in and make all the changes to the mutual funds when reps leave. Now it’s basically a one-stop, couple clicks and you can move on and make that change.

So as you can appreciate, there are so many operational benefits to centralizing your mutual fund holdings. Now Paul, I’m going to turn things over to you and Kelly to talk about compliance.

Paul Osterberg: Thanks, I appreciate it Ian. Yeah so Kelly, take us through how this platform can make us more regulatory compliant.

Kelly Lynch: Sure, sure Paul, thanks. So Monica mentioned that some of their look was prompted by the fiduciary rule and although it’s much less and some would say not, it really did prompt firms to look at their processes and a number of them either have already implemented changes, or still plan to implement changes. And the compliance people that I meet with in the field, compliance is at the front-end of the process. And as I walk into a shop, I often see manual review, paper review, check lists, paper moving around.

And with FundKeeper, we’ve automated that process so that the system can store what those rules are. And as accounts are opened, as transactions are entered, those rules can be applied and only the exceptions are routed back to the principal. So rather than manage by reviewing every item, you are managing by exception. And a lot of compliance people have found that pretty attractive. As part of that, also in an automated way, rights of accumulation for both what we have on the platform and what we’ll call held away, and that’s maybe too much for this conversation. But rights of accumulation can be automatically calculated.

Firms cannot have the rep override that if they happen to know about some other asset that we don’t know about. But I think often firms rely on the rep to calculate that, maybe it doesn’t get done right, maybe those are some of the things that get worked out later in the post-trade compliance review. In this case, we really minimize those by getting the ROA handled in an automated way right up front.

The other thing I hear and some firms are fairly sheepish about it, but when they find out they’re not the only one, they get less sheepish; if the compliance people aren’t really comfortable that they even know about all the accounts they have direct at the fund. Even if they have aggregation software that they’re reading something into, they’re just not comfortable. And by routing activity all through a single point that really brings that broker-dealer’s customers home, the compliance people can become comfortable that they know going forward, we’ll help them gather up all the existing stuff. But on a go-forward basis, the compliance people can be more comfortable that they know about all the accounts that they have.

Also seeing what the rep is doing in a single spot, again across fund families, across activity. I talked to a firm recently who had the ability through some industry tools to let their reps be more self-service with direct fund accounts. But they had turned that off because they weren’t comfortable because they couldn’t see what the reps were doing.

Whereas with FundKeeper you have this automated interface that lets the reps do things like add a swap, or change a bank, do various things online and the firm has transparency into that. So you can empower your reps and agents in a way that you can still as a firm feel comfortable with. I already hit the real-time transaction monitoring that again, there can be rules that are applied and both alerted at the rep level to say, “Hey there’s a problem,” or the transaction may go through and may be routed to a principal to review and approve. And then we talked about account maintenance.

Single trade blotter is more the thing of you do get it all in one place rather than trying to construct. Again, a number of firms I talked to that either bring in files or have aggregation software that brings in the files to produce a trade blotter across fund families. Even that trade blotter can be problematic because in the direct-to-fund model, a purchase at Franklin can look different than a purchase at Putnam, can look different than a purchase at American Funds by code, etc. And if a fund changes a code and you don’t know about it, it falls off the report, blah, blah. You’ve got a lot of tech people taking up time. With FundKeeper transactions look the same across fund families and you get a single trade blotter out of a single source.

And then we have, to the extent that actual documents are being created like new account documents. For example, we can gather the new account data in an electronic way and still produce an image of an application that can be stored online and again, the compliance people aren’t having files of that and scanning paper, etc. It’s online and available. And then let me also talk briefly about technology, Paul if I could.

Paul Osterberg: Yes, please do.

Kelly Lynch: I hit on some of it. So if the compliance people are on the front end and Monica and Ian talked about operational people in the middle, the technology people tend to be at the back end of the thing trying to piece it all back together if you’re direct at fund. And what we found both with prospect and client is that these technology people then are not having to gather up all these files. Monitor that they came in, normalize them, and then still not be confident.

We hear even with some of this aggregation software, firms are just not confident about the data that they have coming back in from the funds, that it’s complete and accurate. Those technology resources, if you get onto FundKeeper and you centralize, you can get those same files from one place. Again, they all look the same across fund family. Technology resources can be freed up to do value-add things, rather than monitoring files. Libraries of forms, another thing we hear. Hey either we have paper from a bunch of fund families or we’ve got some tool, there are certain industry tools to let you store fund forms. But you’ve still got a bunch of fund forms to maintain.

With FundKeeper there’s a single form, a single new account application across fund families, a single to the extent forms have to be used for certain things, there’s a single form that works across fund families. So it just frees up technology to do value-add things like integrate this mutual fund data into the existing systems. And I don’t know if Monica will talk about it at the end, but they did that very extensively at Monica’s firm using the API library to expose the mutual fund data in already existing tools that the reps were already using and familiar with.

Paul Osterberg: Yeah and as we kind of open it up, one thing I just wanted to introduce is last year looking at what FINRA expected in their annual letter that they spent all of us around small firms being able to manage data, and manage technology, and manage integration, and manage cybersecurity just like big firms. And my observation is FundKeeper is the solution that allows firms of any size to act like a bigger firm.

Monica, can you start to talk a little bit about how you integrated FundKeeper? Maybe from a technology perspective, but also just from a rep or adviser perspective. What’s that rep or adviser experience been like? Why don’t you start wherever you wish there, either on the integration side or the rep experience side?

Monica Daggs: Sure I’ll start with the integration side. We certainly are, because of some of the things Kelly mentioned, our technology and operational teams were really excited about this project because of the amount of work that they do on a regular basis to maintain the data and process the business. And so it was really a collaborative experience with Envision and U.S. Bank, and we leveraged a lot of their standard API files so that our system could talk to theirs. With a real focus of reducing paperwork, reducing data input, we figured if we have the information as their way to pass it through to the FundKeeper platform.

And so the FundKeeper team was able to work with our custom technology platform through the standard API that they established. And so just a small example. For example we wanted to use our instance of e-signature with our vendor for transitioning the account fund to the platform because we wanted that rep experience for them to continue to use the way they opened accounts for that. And because of that system, we wanted to use our integration. And it allowed us to keep the tools that our advisers use that they’re familiar with, with this new process, and that was really smooth.

And our key through this, at least mine as the lead on this to integration, was to one, make it simple for advisers, two prefill the data. If we had it, we were going to pass it through and not ask them to populate it again, and to eliminate forms wherever possible. A simple example of that was in other clearing platforms we needed a separate form to establish ACH instructions and then a separate form or data entry to include a systematic. And the system ties all that together without a form. The ACH instructions are combined into the new account forms. So we can establish that from the beginning.

As we rolled it out to our advisers, it’s gone very well. We’ve taken, with the DOL we were planning on taking the approach of the big stick, “You’re going to have to do this.” And we haven’t had to use that stick and we haven’t really needed to, to begin with. So I’ve been on the road talking about FundKeeper to our advisers at large conferences and in smaller group meetings. And we launched FundKeeper about nine months ago and we currently have, within nine months, more than half of our advisers using the platform simply from telling them about it. There’s no incentives, there’s no disincentive to use other systems, and they are just starting to use it as they hear about it.

And in these meetings they’re saying things like, “Is it really that simple?” And another adviser said, and this was a new adviser to our platform who had been in another institution previously and said, “Why would I ever open a direct business account again?” and I was of course cheering because of all the operational efficiencies that it gets for us. I had a fun interaction with a long-time adviser of ours that wasn’t really an adopter of the platform. And he was sitting with his client, and this is in a financial institution, so he had the client have a check cut from the teller line to bring it over to fund the account.

And advisers get used to doing business a certain way, and he called me because he said he knew there was some way to do the remote check capture, he wanted to figure out how to do that, have me walk him through for the first time. And I asked him, I said, “Well did you fill out those ACH instructions on the new account form?” “Well yeah.” I said, “Okay have your client take the check back to the teller line and return it, and go here, click these three buttons,” and the account funded. And he’s like, “Wow that was easy. Is that it?”

So there’s been some great anecdotal experience, but also just with the integrations that we built and the simple trainings that we’ve put together, it’s been really well-adopted by our advisers who have been really thrilled with that.

Paul Osterberg: That’s great. So one thing I want to comment on before turning it over to some of the other panelists is, Monica mentioned 50% adoption out of the gate within nine months. If we think of common tools like Albridge. When I was running technology and if these broker-dealers, Orchestra or other clients that I’ve had, we just dreamed of adoption of 33% within 2 to 3 years of any tool. So 50% adoption is amazing in nine months. Kelly or Ian, anything you’d like to add around integration or adoption? Or just a rollout experience at CFS?

Kelly Lynch: Maybe an integration comment. And that is that there are two ends of the spectrum. So very extensive and deep integration is quite possible, is possible, and as testimony to that at CFS, at Monica’s firm, they don’t even use the term FundKeeper. They have their own name for it because it’s so integrated with all of their existing tools.

On the other end of the spectrum, you could use FundKeeper directly out of the box day one and maybe integrate day two, or never, and just use FundKeeper as a standalone site.

Paul Osterberg: Ian, anything else you’d like to add?

Monica Daggs: Oh I’d like to ask …

Ian Martin: Go ahead, Monica.

Monica Daggs:  Oh sorry, sorry. Some of things that we did at our own custom integration with, we now are actually going back to the off-the-shelf version of it. So there’s a lot of flexibility within the platform to pick and choose what you want to use or not. And as with any project as you roll it out, there are changes that need to be made and the team’s been really great to work with as we’ve wanted to make those changes. So sorry, go ahead, Ian.

Ian Martin: I was just going to make mention that we knew. Just because again, we dealt with registered investment advisers, we know how sometimes reluctant they are for change. So the tools that we really have tried to put in place have really made it easy to do things like transfers and everything else that Monica spoke about.

Kelly Lynch: And we had another, Paul I’ll mention another rep because I think it’s so nice to hear Monica share some of the rep examples, because I think they’re powerful and really important to the firm, the rep experience. We’ve had occasion with other firms to have reps exposed to the platform and make comments recently, and it’s been super useful. And even aside from all the technology, Ian mentioned rules being consistent.

And as an example, a rep recently brought to our attention one of the rules things that was going to be really helpful in their mind, which was signature guarantee rules across fund families being different. And this rep was talking about chasing down signature guarantees, and it’s not so easy, and the rules are different, and I send something in and then I get it back.

Well with FundKeeper, that’s a rule that can be consistent. First off, she was chasing down signature guarantees for transfers which FundKeeper largely automates. But beside that, those signature guarantees that remain, those rules would get set once with U.S. Bank across all the fund families. They’d be consistent, the rep would know, and there’d be few instances where they’d be required. So there are even these sort of basic, if you will, rep annoyances that maybe some of us aren’t even aware of that are of benefit.

Paul Osterberg: Just a reminder as we move toward taking your questions, feel free to go into the chat window and submit questions. Or we’ll unmute in a bit here too. But before we do that, Monica or anybody, Kelly or Ian, anything you’d want to share around savings or efficiencies?

Obviously it costs money to get something like this implemented. Any comments you’d want to make around ROI? I know in your case, Monica, it’s early. But is it worth it financially?

Monica Daggs: It is.

Paul Osterberg: Anything you could share there?

Monica Daggs: Yeah. The cost savings, if you take them and start to add it up around what our programs and our advisers are spending in FedEx costs. Because if the business is over a certain amount, they want to get that to the mutual fund company as quickly as possible. So they were FedEx’ing applications and checks. And then alternatively, if they were on the full-service brokerage platform, there were all those nuisance fees that add up to the end client or potentially the advisers covering them. Things like ticket charges and inactivity fees, confirm fees, multiple IRA maintenance fees.

We’ve been tracking some of that and I don’t know if we’ve completely overcome in the nine months, the cost of implementation, because this was a very large integration. But we have made a lot of headway on that from the standpoint of cost savings to our clients to our programs. I think I came up with the business that we put through the platform already. We’ve saved the end client over $80,000. Or no, I’m sorry that was a combination of the end client and the advisers in FedEx costs, ticket charges, inactive fees; those kind of things that would have occurred had they done the business somewhere else. So that’s been really helpful to us.

And then from a time savings, these are the harder things to track from our home office and our operational folks. Because of the integration that we built, if an adviser, if there’s a rep change on the account, because a book of business transitions from one adviser to another, or simply an address change by the client, instead of having the adviser have to go to multiple fund companies as Kelly mentioned I think earlier, having to key that in to different systems, they put that into our system and it automatically flows through and updates the account at FundKeeper. As opposed to having to then also call the fund company to update it there.

So those are some of the costs that are a little harder for us to track about the time savings that we have from an operational standpoint. But we, as a firm, have been very happy with the adoption and the savings from a time and hard cost already just nine months in.

Paul Osterberg: Super. Anything else there, Kelly?

Kelly Lynch: Paul, I might mention one thing about adoption, which is and Monica might have some observation about this. So there is adoption of, “Hey I’m going to do all my new business through this platform,” and then there’s adoption of, “Oh I’m using this platform. So what about all my existing clients that are already at the fund?” And we have introduced some automation to that process to make it as easy as possible for the advisers to do that.

So we gather up in an automated way, all of those positions that are already at the fund and present them to the adviser and say, “Would you like to move Kelly? Would you like to move Paul? Is it appropriate to move Monica?” And they click yes and they can indicate whether they want us to communicate their, CFS designed a communication piece and we send that communication piece out either electronically or via paper, and then keep track of the consents that we get back. And once we get those consents back, we can transfer those positions from the individual position into the omnibus position at the fund. So onto FundKeeper in an automated way.

So I think that’s important because I think some firms feel like, “Oh gosh, how do I get from here to there with this existing book of business I already have?”

Paul Osterberg: Thanks. Well time now for questions from the audience. John, do we have any that have come in yet? Or do you want to open it up to unmute the line?

John Gray: Sure Paul. To this point we did just get a question. I’ll just read it for you. It says, “Do the mutual fund companies send files to FundKeeper to load the mutual fund information?”

Kelly Lynch: I’ll take that one, unless anyone else wants to jump in. So I’m not sure if the question means, so a couple things. So yes, we initially get all the direct positions and we have those and we keep those current right off to the side to help this transition process. The individual accounts, once an account is on FundKeeper, it is no longer at the fund. It is in an omnibus account at the fund. So once the account is on FundKeeper, the data actually goes the other way to the fund family.

So once an account is on FundKeeper, we nightly, because we’re trading omnibus. So if John, Kelly and Paul all bought the same American Fund on the same day, that would get rolled up into one order and be in one account. So they don’t know about John, Kelly and Paul anymore at the fund. So we around the side tell the fund who the rep was on the purchase for John, for Kelly, for Paul, so they get credit with their wholesaler, etc.

Yeah, so I don’t know if that answered the question. So yes we do have electronic communication to and from the fund, and it’s different whether the account is still direct or whether the account is on FundKeeper.

Paul Osterberg: Any follow-up to that Monica or Ian?

Monica Daggs: Yeah that was important for our advisers to understand. And when looking at it transferring their existing book of business, we wanted them to be clear to their client that if you have an account directly at a fund company, that account will be closed. They will no longer get statements from the fund company. Those will come from the FundKeeper platform.

And so it was really important in our training for our advisers to understand that – especially for the business that was transferring from the existing held away, if you will.

Paul Osterberg: Before we take our next question, I have one. So I remember my CEO once telling me or asking me, why don’t we just move everything to the brokerage platform. Anybody want to comment on that? Because I was like, “Well let’s talk to the advisers about that one.” So is that something you guys thought about doing, Monica? Just make everything brokerage versus leveraging something like this that avoids that?

Monica Daggs: Yeah we did before this existed. That was one thing we were considering. Do we work with our advisers and clients to move everything to a full-service brokerage account? And there’s a couple of challenges with that.

Obviously you need the client’s consent to do that because it’s a different account and fee structure. And so that is challenging to do without a system in place. And secondly, that platform was just expensive and it didn’t seem like it was in the best interest of our clients to do that, and to move them from a directly held account to a full-service account.

So now that the FundKeeper platform exists and it’s out there, it had not existed before, some of the transfer tools that Kelly talked about, allow us to do that easily where it’s appropriate and let the adviser and the client really make that decision and consent to it. And that’s going to be our work over the next year I would say, is to work with our advisers to really get them to really use that transfer process in addition to the new business that’s coming onto the platform and really try and consolidate those existing accounts. Because now it makes sense to do so. Whereas two years ago, it didn’t.

Paul Osterberg: Have you seen some advisers or reps in the banks, your clientele move business from the brokerage platform yet? It’s a little early. I would doubt you have yet. But that could happen.

Monica Daggs: Yeah from our brokerage platform to this?

Paul Osterberg: Yeah.

Monica Daggs: Yeah we have seen some of that. A lot of it happens to be, as advisers they tend to be a little, at least in our space, in the financial institution space, a little more reactive rather than proactive.

So it’s happening as maybe a member comes in and they’re ready to make a new purchase or perhaps there’s a change in ownership in the account, whether due to marriage or divorce, or something along those lines where a transfer was going to happen anyway. And then they’re looking at moving it onto this platform being lower cost going forward, since they were going to have to make a move anyway.

Paul Osterberg: Other questions, John? Any come in?

John Gray: We have a question talking about or asking if there’s any feedback from the end investor perspective.

Paul Osterberg: Should we check with you, Monica?

Monica Daggs: Yeah I have not spoken to any end investors directly. And the fact that in my realm here at CFS, I also oversee our call center, and we have gotten very few calls from the end customers. They tend to call their adviser, which I think is the most, what most of the firms on the line experience would be. And it’s typically just been for servicing issues. It hasn’t been, I haven’t had any feedback from the field that there’s any concern about their accounts or the process or the communications that they received.

So I would say that the response has been minimal from the end client after an account is opened, which is, in my view, a very good thing. We want it to be seamless and easy for them.

Paul Osterberg: No news is good news.

Monica Daggs: Exactly.

Paul Osterberg: Next question, John?

John Gray: There are no other questions that I’m seeing at this point.

Paul Osterberg: I’ve got a couple. Do we want to unmute the line and just let people verbally ask?

John Gray: Sure, sure. Let me press the button. So all lines should be unmuted at this point.

Paul Osterberg: Great. Before anybody asks one, I’ve got one. Let’s assume I’m interested in getting started. Talk a little bit more about how a project, how much planning is necessary, how to kick off. Talk a little bit about that first.

I’d like to hear from definitely Monica and Kelly, and Ian if you have opinions here too. How do you get started? What do the projects look like?

Kelly Lynch: Monica, do you want me to start with sort of what we would say and then you can talk about what was your experience?

Monica Daggs: Yes please.

Kelly Lynch: Yeah so the FundKeeper folks bring an implementation team, I will say really, that’s headed by a project manager and we would look for the broker-dealer firm to also have a project manager that then brings the various subject matter experts to the table as needed.

And the primary subject matter experts would be operations, technology, compliance and marketing really for some of the communication. And then I’ll pause there, Monica, and let you talk about.

Monica Daggs: Yeah and that’s the team we really assembled. We had a project lead on our side, we did have at a very high level, in each of those departments, technology, operations, compliance, marketing. And I would add the commission accounting group. We got involved very quickly as well because they needed to see how the data was going to come through and reconcile commissions, because it’s kind of important to our advisers. So we included them in the project as well.

And we met on a regular basis. We had a great project plan that we worked through. And the marketing, and training falls under marketing for us, and they were brought on certainly closer to the end after it was built to make sure we had the right training in place for our advisers.

Paul Osterberg: Any other questions out there in the audience?

Ian Martin: This is Ian, I might just mention too that we take a lot of pride and really provide in a consultative approach. So to “get started,” one of the things we do is we’ll bring our entire team to the office and meet with the various groups that may be involved, and kind of work through the potential solutions to get things running.

Now Monica is certainly, their firm had a lot of integration. Some firms don’t need to have as much integration. So there really is not a one-size-fits-all and we will work with the organizations on what fits their model best.

Paul Osterberg: Thanks Ian. Any other questions?

Sherri: This is Sherri. I wanted to know where all the information is kept in FundKeeper, like all the different mutual fund companies and that type of thing. Like on the customer statements or like what the advisers or end users see online. Do they see the individual positions of the different companies still listed on their account? Like American Fund, Franklin.

Kelly Lynch: Yep absolutely, Sherri. So it would look just like as though, we’re trying to have the fund experience, right? So just like if they logged into a fund website and they could look at their balance, and look at their activity, see their cost basis, see their systematic withdrawal plan. It looks like that, except in that one account they have multiple fund families.

So if you go look at the transaction history, it might say Blackrock Fund, it might have an American Fund, etc. So if you think about a fund’s website and a number of prospects have asked us to line up function by function, here’s what we can do at this fund’s website, can we do that on FundKeeper? And our goal is to be able to say yes to all of those things.

Sherri: And is that real time?

Kelly Lynch: I’m sorry?

Ian Martin: Online it’s real time, correct.

Sherri: It’s real time? Okay.

Ian Martin: Yeah I mean one of the advantages that we should emphasize too is this gives your firm and a lot of broker-dealer trust, etc., the ability to brand the statement as yours. The underlying holdings obviously are going to list the various fund companies, but it gives you a branding opportunity and it also allows you to add statement messaging, etc.

So versus the end client getting various different statements from various different statements from various fund complexes, etc., that are not necessarily branded as your firm.

Sherri: Okay thank you.

Paul Osterberg: Anything else? So today we’ve heard some of the business benefits, we’ve heard about operational benefits, streamlining work. We’ve heard about being more regulatory compliant.

It’s nice to see solutions such as FundKeeper popping up in the industry that really are addressing all three facets of our businesses that are kind of, have been under attack over the last 10 years or so. Because out there in the field, application where your direct business continues to be popular.

One last call for questions and if nothing else, we’ll move to John to wrap things up.

Sherri: I do have one more question. This is Sherri again.

Paul Osterberg: Hi.

Sherri: With reporting, do we have the ability to create reports or our own ad hoc reports or that type of thing?

Kelly Lynch: There are a number of reports, Sherri, that are available in the system. The data is, I’m not a technologist, but so the data is, it’s SQL based. So it’s accessible and we would work with you if there are, either we can give you files of data that you might want to report on nightly. For example, some standard files. And I know Monica’s CFS receives these. Positions, transactions, etc.

We can also work with you to create reports that can be run nightly, weekly, either into data or to have hard copy reports, or electronic reports.

Sherri: Okay, that’s good to know. I guess if we wanted to go in and create like an ad hoc report off the system, just we needed something like just on the fly or something, is that available to do that?

Kelly Lynch: We’d prefer to give you the data and have you read it into a different system, but we’d be happy to talk to you about that.

Sherri: Okay, sounds good. Thank you.

Kelly Lynch: Thank you, Sherri.

Paul Osterberg: Hey John, why don’t you wrap it up for us.

John Gray: Thank you, Paul. And I’d like to thank Paul, Monica, Ian and Kelly for their time. As I mentioned at the start of the program, you will be receiving a link to the recorded session. And we do encourage you to share the link with your colleagues.

You can see Kelly’s contact information on the screen here. If you do have questions or would like to learn more about the FundKeeper product, please do reach out to Kelly.

And lastly, I’d like to thank you all for attending and suggest that you have a great rest of the day. Thank you very much.

Ian Martin: Bye.

Kelly Lynch: Bye all.

Paul Osterberg: Bye-bye.