Pershing's Affiliate, iNautix, Releases New Study for Broker-Dealer Firms Focusing on Best Practices for Maximizing Operational
April 27 2009 - 8:00AM
PR Newswire (US)
JERSEY CITY, N.J., April 27 /PRNewswire-FirstCall/ -- A new
independent study published by Moss Adams LLP and iNautix (USA)
LLC, an affiliate of Pershing LLC and unit of The Bank of New York
Mellon Corporation, found that operationally efficient
broker-dealer firms are able to support more investment
professionals, achieve higher levels of productivity and generate
more revenue per employee. The report emphasizes that given
increasing competitive pressures, new regulatory requirements and
challenging market conditions, it is critical for broker-dealers to
continue enhancing their operational infrastructure and processes
to achieve long-term growth. The study, entitled The Art of
Efficiency: A Holistic Approach to Operations, analyzes
characteristics of the most efficient and profitable broker-dealer
firms to provide best practices for developing an efficient
platform. According to the report, the overall success of
broker-dealers will be defined by the effectiveness of interactions
between processes, people, technology and product strategy. The
most critical elements to achieving operational efficiency include:
-- Highly efficient firms are placing a greater emphasis on process
management - Broker-dealer firms best positioned for future success
are measuring processes, streamlining workflow and shifting more
responsibility to investment professionals who are in the field.
According to the study, firms that initiate more processes in the
field have significantly lower not-in-good-order (NIGO) rates and
are able to process new accounts faster and more efficiently; --
Effective technology integration is crucial to enhancing
operational efficiency - Processes that lack automation and are too
paper-intensive are viewed as the most significant operational
challenges facing broker-dealer firms today. Where technology falls
short is not so much in the technology itself, but rather in its
implementation and how it is used. For example, while 90% of survey
respondents have a document imaging system, only 30% of them
leverage workflow technology to completely automate the new account
opening process. While integration of technology systems has its
challenges, the rewards are rich for those firms able to achieve
it. The study shows that firms with a higher percentage of
integrated systems had lower overhead expenses, more favorable NIGO
rates, faster processing times and greater staff productivity; --
Designing an organization around operations will help to enhance
client satisfaction - Tying home office compensation to operational
goals, such as lower NIGO rates, is one strategic way to make
operational excellence an integral part of the overall business
strategy. To help ensure the end client experience isn't
jeopardized, the report recommends implementing recognition,
compensation and training programs that align the interests of both
the home office and branch office to help reinforce desired
behaviors; and -- Being all things to all people is a strategy that
rarely works well - The solutions and services a firm chooses to
offer its investment professionals and clients can impact a
broker-dealer's efficiency. Inefficiencies can result from too many
capabilities being offered, as well as increased costs for due
diligence and systems maintenance. The study shows that
top-performing firms are imposing limitations around their product
strategy, such as mandating that advisory accounts be opened with
specific custodians and offering fewer separately managed account
managers. Suresh Kumar, chief executive officer of iNautix USA,
said, "Broker-dealer firms are standing at the crossroads of an
operational transformation. They must think strategically about
ways in which they can optimize their operational processes, human
capital and infrastructure to achieve higher profitability and
long-term success. Firms that take these actions will competitively
differentiate themselves and be in a better position to devote more
time to helping clients fulfill their investment objectives." The
Art of Efficiency: A Holistic Approach to Operations was
commissioned by iNautix USA and independently executed by Moss
Adams LLP. It draws on data submitted by 23 broker-dealers through
an online survey conducted during the summer of 2008. To receive a
copy of the study, please contact iNautix at 1-866-355-5551 or
http://www.inautix.com/ iNautix (USA) LLC is an affiliate of
Pershing LLC (member FINRA, NYSE, SIPC) and a leading provider of
enterprise solutions, custom technology and business consulting
services to institutional and retail financial organizations and
independent registered investment advisors. iNautix draws upon its
financial services experience and technology expertise to help
financial organizations enhance their operating performance and
maximize their productivity. Additional information is available at
http://www.inautix.com/. Pershing LLC (member FINRA/NYSE/SIPC) is a
leading global provider of financial business solutions to more
than 1,150 institutional and retail financial organizations and
independent registered investment advisors who collectively
represent over five million active investors. Located in 19 offices
worldwide, Pershing is committed to delivering dependable
operational support, robust trading services, flexible technology,
an expansive array of investment solutions, practice management
support and service excellence. Pershing is a member of every major
U.S. securities exchange and its international affiliates are
members of the Deutsche Borse, the Irish Stock Exchange and the
London Stock Exchange. Pershing LLC is a subsidiary of The Bank of
New York Mellon Corporation. Additional information is available at
http://www.pershing.com/. The Bank of New York Mellon Corporation
is a global financial services company focused on helping clients
manage and service their financial assets, operating in 34
countries and serving more than 100 markets. The company is a
leading provider of financial services for institutions,
corporations and high-net-worth individuals, providing superior
asset management and wealth management, asset servicing, issuer
services, clearing services and treasury services through a
worldwide client-focused team. It has $19.5 trillion in assets
under custody and administration, $881 billion in assets under
management, services more than $11 trillion in outstanding debt and
processes global payments averaging $1.8 trillion per day.
Additional information is available at http://www.bnymellon.com/.
DATASOURCE: The Bank of New York Mellon Corporation CONTACT:
Barbara Gallo, +1-201-413-2930, Web Site: http://www.bnymellon.com/
http://www.pershing.com/ http://www.inautix.com/
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