Distribution fees and commission management are the process of calculating, allocating and adequacy distribution commissions and distribution costs made available to distributors of a particular fund or sector. Asset managers offer traders (for example. B, financial advisors or retail banks) a single or current commission to encourage them to offer the asset manager`s products and encourage distributors` clients to invest in the fund. This is a process similar to how insurance sellers collect routine commissions on creating customers for the provider. Since the allocation of commissions is an ongoing process for the legislature, regulatory changes can occur at any time with respect to the matter. B RDR and MiFID II. For companies that follow commissions manually, considerable time must be spent on compliance and possible regulatory adjustments to ensure that distributions are paid legally and that all distributors, sellers and/or customers are informed of changes in the commission structure and underlying data, including appropriate reports. Many valuation firms, despite the risks and errors inherent in human inputs in Excel or other deficient programs, continue to rely on manual or semi-manual processes for processing commissions, fees and distribution management. Using automated distribution management software reduces working hours and improves performance, efficiency, accuracy and compliance with legislation. MFEX Rebates Out Service provides fund companies with a comprehensive solution for negotiating, signing and updating distribution agreements, coordinating positions and paying off discounts to distributors. MFEX signs a comprehensive agreement with a fund company covering a wide range of its funds in several jurisdictions.
Since its inception in 1999, Financial Solutions has worked closely with a large number of financial service providers to accelerate the management of fees and commissions – so we know what it takes to effectively manage distribution processes. Based on our knowledge and experience in the financial sector, we have put all-inclusive distribution costs and commission management solution on the market. Asset managers are encouraging distributors to attract new investors to the fund. This activity is based on the realization that getting more investors into a fund will improve asset growth, which offers all investors greater return potential. The most common terms used to define these distribution structures are: trailer fees, discounts, commissions, retrocessions, incentive fees, incentives and 12b-1 fees (in the United States). Most investment advisors (note 1) in Hong Kong follow a Commission-based business model. This means that they do not charge customers directly for consulting and product distribution services, but receive commissions (in various forms) from product issuers for products sold to customers. MFEX manages a single distribution agreement with each distributor and thus allows access to all our fund partners For the asset managers of larger funds, distribution management is not an easy task. When a fund is made up of hundreds or thousands of distributors, with dozens of customers and potentially a large number of subfunds and/or equity classes, considerable work is required in the effective monitoring of specific and timely commissions. Current challenges for an asset manager include determining the true value of the asset at the maturity of the distribution, applying the correct commission rate, setting the correct commissions of clients who have joined the Fund or left the fund during the period, verifying the sending of correct payments to the relevant distributors and ensuring a precise and transparent reporting structure.