Insider perspective on how fund data management impacts fund distribution

8th February 2024

More than 25 years ago, when I started in the financial services industry, it was enough to collect and disseminate around 50 data points for an investment fund to be added on a distribution platform or in a data vendor’s database.

Fast forward and thanks to ever changing regulation (MiFID, PRIIPs) and introduction of the new ones (ESG), the number of data points for fund onboarding (distribution) has exponentially increased to more than 1,000 – per share class! And this does not even include Fund Documents or any other fund data like Portfolio Holdings, Performance or MPT Statistics.

I held various positions over the years with major global data vendors focusing on data and service delivery, but it was only when I came to Acolin that I got to understand the complexity and difficulty asset managers face in their fund distribution efforts.

Very few companies see the full picture how fund distribution really works and understand the challenges and, more importantly, issues which come up and cause the process to break. Proper data management and dissemination is the foundation of successful fund distribution, one could even say “data dissemination equals fund distribution.”

Asset managers aiming to distribute their funds need to be on top of the respective data management and dissemination requirements. This is not limited to frequency for providing updates or the delivery format.

These requirements are market specific so it is important for the asset managers to decide which will be their main sales markets and based on that to develop internal and external resources and processes for data management to support their sales and marketing activities.

For example, in the UK, apart from all the fund data and documents, the latest European MiFID Template (EMT) version needs to be used as it includes specific UK related fields and the UK Consumer Duty Report needs to be produced as well. Another challenge for the UK fund distribution is that each Fund Distribution platform has its own onboarding template that needs to be populated, process which is both manual and time consuming.

In Germany, it is important to be able to deliver MiFID data not only in a standard but in a custom format as well. This requires detailed knowledge of EMT files, data transformation and the respective local rules.

In Switzerland, it is preferred that asset managers have their documents and data presented in four languages and not just in English, even if the Swiss regulator recently became more flexible in that regard.

At the start of the process, asset managers need to decide if they will organise their data management and dissemination internally or if they will instead partner with a 3^rd party and outsource this specialised and demanding work to somebody else. Whichever decision is made, proper planning and governance needs to be established so that the process of data collection, validation, pre-population and transformation, as required by the selected distribution partner and their “golden source” vendors, runs as smoothly as possible.

Acolin supports its clients with their data management and dissemination challenges since 2006. Speak to us for further information.