Broker/Dealer Division of Top 5 Global Investment Bank

Mutual Fund Platform Consolidation

Phase I

Client Challenge

  • The Broker Dealer processed affiliated fund family on a proprietary platform while all other fund families were processed on an industry standard platform. The client’s overall goal was to consolidate and standardize the proprietary platform by migrating it to a single broker-controlled servicing environment.
  • This was a cross-divisional functional effort between two of the client’s internal departments, Broker Dealer and Transfer Agent, that required significant socialization in the midst of an extremely delicate internal political situation.

Our Approach

  • A Project Management Office was established to coordinate and monitor the progress of the Broker Dealer and Transfer Agent efforts. A reporting mechanism was also created for reporting activities and issues to the Leadership and Executive Steering Committees.
  • An existing Gap Analysis of the current state and future state operating model processing environments was validated. The team facilitated the gap remediation decision process by creating an Impact Analysis, which identified associated product, procedural, business and organizational impacts to the current Broker Dealer environment.
  • The team developed a high-level Business Case and Cost Benefit Analysis (CBA) which considered the cost of current technology and operating environments, conversion and implementation expense, and financial quantitative and qualitative benefits of migrating to the proposed consolidated platform.

Solution/Client Benefit

  • 77 gaps were identified and categorized into 7 remediation categories. This allowed the team to determine the number of Business Requirement Documents (BRDs) that were required to enable the technology build-out.
  • A Mutual Fund Target Operating Model was defined that addressed the systems, processing, and service-related constraints that existed within the current environment.
  • The team was selected to complete Phase II of this effort, which consisted of the continuation of the Project Management Office, the refinement of the Business Case, the documentation BRDs for technology infrastructure build-outs, and the development of a high level conversion strategy.

Phase II

Client Challenge

  • Mutual fund processing was supported on several operating platforms. In order to create a single broker-controlled environment, eliminate legacy architecture, and support industry standard operating models (NSCC Level 3 Broker Controlled), the client’s overall objective was to consolidate and standardize Mutual Fund processing functionalities by migrating all mutual fund processing to one broker dealer platform, as well as to eliminate legacy architecture by outsourcing the Transfer Agent Platform.
  • This cross-divisional functional effort between two of the client’s internal departments, the Broker Dealer and Transfer Agent, required significant facilitation and socialization.

Our Approach

  • A Project Management Office was established in Phase I and continued through Phase II. PMO consisted of the coordination of the Broker Dealer and Transfer Agent Phase II development efforts, monitoring progress, and governing and structuring all Phase II workstreams including BRD development, conversion planning and Business Case development.
  • AS a result of the Gap and Impact Analysis executed in Phase I, 14 BRDs were identified for development in Phase II. Work-sessions for requirements gathering were coordinated.  These work-sessions created a forum to raise issues, pose solutions, and subsequently document, review and validate the requirements.
  • The team documented the approach for streamlining all of the Open and Closed-end Mutual Fund Functionalities by coordinating all workstreams, conducting work-sessions, and by documenting, reviewing and validating conversion approach as it was developed.

Solution/Client Benefit

  • 14 BRDs were developed that identified functional areas affected by the conversion, identified issues and remediation options for those issues, and detailed specifications for infrastructure build out necessary to support Mutual Fund processes and functionalities on the External Platform.
  • Two high-level conversion plans for both Closed-end and Open-end Funds were developed. The conversion plans included high-level timelines, risks and interdependencies between the various workstreams, working assumptions, as well as detailed pre-conversion, conversion and post-conversion activities by workstream. In addition, these documents also integrate the Gap and Impact Analysis conducted in Phase I.
  • The team continued to refine the high-level Business Case developed in Phase I and received sign off on the quantitative analysis.
  • The team was selected to complete Phase III of this effort, which consists of the continuation of the Project Management Office, the refinement of the Business Case, the implementation of the Closed-end Fund Conversion, development of a detailed conversion strategy, as well as the development of the detailed client and FA communication plan.

Phase III

Our Approach

  • A Project Management Office was established in Phase I and continued through Phase II and Phase III. PMO consisted of the coordination of the Broker Dealer and Transfer Agent Phase III development efforts, monitoring progress, and governing and structuring all Phase III workstreams including BRD development, conversion planning and Business Case development.
  • The project team documented the detailed conversion and cutover approach to migrate the proprietary variable price funds to a single broker-controlled servicing environment by coordinating all workstreams, facilitating work sessions, and managing critical detailed interdependencies and conversion risks.
  • Roles and responsibilities were defined for the conversion command center, including regular status check-point meetings and an issue remediation infrastructure.

Solution/Client Benefit

  • 2 BRDs were finalized that identified functional areas affected by the conversion, identified issues and remediation options for those issues, and detailed specifications for infrastructure build out necessary to support Mutual Fund processes and functionalities on the External Platform.
  • The Proprietary Variable Price Fund Conversion Approach and Plan were developed and finalized. The approach included high-level requirements, cutover plan, working assumptions, test approach, and timelines.
  • A high-level Test Approach and Communication Strategy for the proprietary variable price fund conversion were developed. These documents addressed how the conversion strategy would be tested before live production implementation and what types of communication would be distributed to clients and FAs regarding any changes as a result of the conversion.
  • The high-level consolidated Business Case and Appendix, originally developed in Phase I, were finalized.
  • During this Phase, a small number of closed-end accounts were migrated from the Transfer Agent platform to stock record as a proxy for the larger mutual fund conversions to follow.
  • The project team was selected to complete Execution Phase I of this effort, which consisted of the continuation of the Project Management Office and the implementation of the proprietary variable price fund conversion strategy and communication plan. This Phase also consisted of the planning and execution of the sub-accounting and money market sweep funds conversion.

Gartland & Mellina Group — A Management Consulting Company