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Bonaire Survey Reveals Widespread Reliance on Manual Fund and Distributor Rebate Payment Processing

  • Nearly 50% of mutual fund firms still using spreadsheets to calculate distributor payments
  • Over 45% of respondents do not have a way to report across all distributor relationships

Bonaire Software Solutions, LLC (Bonaire), a leading provider of revenue and expense management and accounting software and services solutions to the asset management industry, today announced the results of a survey conducted amongst buy-side executives on the topic of mutual fund rebate calculations. The survey revealed a widespread reliance on manual processes to process distributor rebate and retrocession payments, despite increased industry focus on transparency and automation.

Mutual fund firms may have hundreds of distributors they are using to sell fund products. According to the survey, nearly 35% of firms are processing over 500 distributor payments each period. However, over 70% of respondents have neutral to no confidence at all in reconciling distributor payouts with distributor invoices.

“The results from our survey were eye opening,” comments Christopher John, CEO of Bonaire. “Despite increased regulatory pressures to bring transparency and automation to the industry, most fund and fund administration firms are still manually calculating the hundreds of distributor payments they need to be making. This is a highly error-prone and risk-filled process and could create major problems for mutual fund firms. With accuracy and cost control being key objectives of most fund firms, this is a problem that could easily be addressed with software solutions that would automate this process.”

Survey results also showed that 44% of firms still use spreadsheets to manually calculate distributor payments and over 45% of firms are unable to generate management intelligence reporting across all their distributor relationships. Additionally, 36% of firms are tracking these relationships but via manual processes. Without automation, firms are unable to fully examine distributor relationships to determine which firms are delivering the highest revenue or which are the most expensive. Only 18% are tracking distributors via an automated process.

John continued, “Now is the time for firms to finally implement automated solutions for managing distributor payments. Bonaire has partnered with a number of our clients to implement our REVPORT automated fund rebate and fee calculation software solution that has helped them ensure accuracy and also leverage invaluable business intelligence on which distributor relationships are the most productive.”