Fund Service Company

Assessment of Technology and Administration Operations

Client Challenge

  • This bank-owned mutual fund subsidiary with $90 billion in assets under management has engaged in several acquisitions over the last few years, thus integrating organizations, technology and processes. They were in need of increasing efficiencies throughout the organization.
  • Its 5-year plan is to double assets under management through executing an aggressive acquisition strategy.
  • The company needed an assessment of the current state of both the service company and the fund administration business units with respect to staffing, technology and departmental business processes to help facilitate their strategic initiatives.

Our Approach 

  • The team performed a detailed analysis of the individual business units within the service company and fund administration organization of the fund company. This focused on documenting walk-throughs and interviews to present to management the observations of the current state of the operating environment with associated recommendations for improvement.
  • Based on the team’s knowledge and experience within the mutual fund industry, two staffing models, a top-down and a bottom-up, were utilized to determine full-time employees required to service and administer the assets of the fund company based on current operating metrics. The top-down model comprised a three-pronged forecasting approach based on a composite mutual fund universe, a proxy company, and the company’s own historical trends. The approaches were tailored to correspond to different growth forecasts based on acquisition vs. organic-driven growth scenarios.
  • The bottom-up model incorporated volume, cycle times, utilization rates, and work hours to determine necessary full-time employee staffing requirements within the service company, broken out by individual business units.
  • The team delivered a technology assessment of the service company and fund administration units of the fund company which detailed over 50 potential technology or process enhancements to increase the efficiency of the business.
  • Eight of these technology/process enhancements were raised to a priority to management as being most critical to implement.
  • A detailed quality and control review of a high dollar volume and high exposure department within the service company was also completed. Over 40 processes were identified that lacked sufficient risk mitigation or could benefit from additional process improvements.

Solution/Client Benefit

  • A successful, on-time detailed assessment of the service company and fund administration division of this bank-owned mutual fund subsidiary was completed.
  • This assessment has enabled this company to determine the resources and technologies needed to meet their growth targets in assets under management.

Gartland & Mellina Group — A Management Consulting Company