DTCC is delivering streamlined customer access to its new Managed Accounts Service by forging partnerships with the managed account industry's leading service providers.

Once these providers establish secure links with DTCC, their investment manager clients will have access to the Managed Accounts Service via those links, eliminating the financial and technology hurdles associated with creating individual links. In effect, investment managers will have the option to achieve a turn-key connection to the service's communications platform.

DTCC introduced its Managed Accounts Service in September, with Citigroup Smith Barney's Consulting Group and Global Transaction Services as charter participants. The service provides a centralized platform that streamlines communications and reduces risk in this booming segment of the market.

One connection
Investment managers eager to grow their managed accounts business have been clamoring for a solution to the multiple connections and manual processes they juggle daily as they manage portfolios residing in dozens of sponsor programs.

"There is a growing recognition that operations have to become more efficient to support continued growth and profitability in this market, said Ann Bergin, DTCC managing director, Wealth Management Services. "The average manager is working with 19 distinct platforms, which creates a chaotic mix of communications that is squeezing the manager's time and profit margins.

"Dozens of managers we've talked to believe that streamlining managed account operations to one connection would literally transform the business, said Brett Ginter, a DTCC consultant and principal with Smart Consulting LLC. "The benefits are enormous, but the technology build that's required to recon-figure their existing systems can be a hurdle for smaller firms.

This is where the partnerships deliver a solution that benefits both sponsors and their investment manager clients. "Strategic partnerships with technology providers in the managed accounts space enable managers to tap into the service's efficiencies more quickly and efficiently than many would be able to accomplish on their own, explained Rob Klapprodt, president of Vestmark Software, one of the firms piloting the Managed Accounts Service. "It allows them to maintain their focus on the client rather than worry about operations.

Building an ‘adaptor'
"We've committed to developing a front-end ‘adaptor' that plugs our clients directly into DTCC's communications infrastructure, said Moshe Barnes, CEO of Octavian, a provider of revenue management, reporting, reconciliation and data consolidation solutions for wealth and investment managers that is also piloting the Managed Accounts Service. "Our clients get the benefit of access to a robust managed accounts network without having to invest in building custom technology on their own.

Barnes said his firm is eager to work with DTCC to streamline the new account lifecycle process, which, he said, "will allow both sponsors and investment managers to achieve operational efficiencies that support the continued growth of a variety of managed account products.

Multiple benefits
The "buy versus "build advantage will allow investment managers to focus on growing their client base, while cutting overall operating expenses.

"When we tell managers we have the tools to allow them to open a new managed account - to initiate, fund and launch a new account - for only $7.50, they sit up and take notice, David Gardner, a DTCC consultant and principal of Smart Consulting LLC. "The average cost in the industry right now to open a new account is well over $100 and, in some cases, significantly more. They see the immediate benefit in dollars and cents.

In addition to the cost savings, DTCC's Managed Accounts Service delivers substantial benefits in terms of security and reliability. "When you factor in the inherent risks of faxing confidential details like bank account and Social Security numbers, you start to see that you really can't measure the value of this new capability, Bergin said. @