âRegulation is putting increased pressure on firms to provide a much higher degree of fee transparency,â comments Christopher John, CEO of Bonaire. âWith Dodd-Frank in the U.S. and Retail Distribution Review (RDR) in the UK, investment management firms are finding that they need to address new regulatory requirements while managing increasingly complex fee structures and investment products. We have added new functionality to handle these calculations. For example, if our clients are receiving fee revenue or paying fees to agents/partners, Bonaireâs flagship product REVPORT will handle the fund or distributor rebates, retrocessions and trailers.â
Conducted in Q1 of 2011, the Bonaire annual survey polls leading investment management firms across the globe on the primary challenges associated with fee billing and revenue management. When asked about regulation, 30% of respondents believe that regulatory changes will require new audit, control or compliance reporting processes. One out of two firms believe that proposed regulatory requirements will change the way they are doing fee calculations and billing â of these respondents, nearly 60% believe that process changes could result in fee leakage.
Fee leakage continues to be a prevalent issue as firms are potentially at risk of errantly charging their investors fees as a result of manual processing, with one out of four firms having experienced fee leakage in the past. Nearly 92% of survey respondents maintain up to 200 fee schedules and almost 60% of firms have changed their fee schedules or investment products over the last year.
Mr. John continues, âOur survey results reflect what we are hearing amongst our clients â that 2011 holds tremendous change for global buy-side firms as a result of regulation. We have continuously updated our solution suite to enable firms to address compliance challenges head-on so that they can remain efficient and successful, even in light of stringent legislation.â