The rising impact of inconsistent fund static data

By Kneip

How easy is it for investors to make decisions about investing in your funds?

The quality of the data you or your data vendor/distributor publish determines whether your funds are visible to investors or not. Any data inconsistency creates unnecessary noise and complaints from the marketplace, and in the worst case can hinder a successful fund distribution. As data is missing or becomes out of date, right on one platform but not on another, it can damage your brand and fund ratings, create unnecessary stress on your operations and ultimately impact your bottom line.

What we mean by fund data

Fund data is usually classified as either dynamic or static. Dynamic data includes daily or regularly pricing share class information, distribution, tax information and more. Static data will be linked to the set-up and nature of the fund, legal information, naming and identification information, manager’s name, fee levels etc.

Asset managers have an obligation to inform vendors of any new mandate or change of data. Until 2009 regulators legally required them to publish in print editions any change relevant to the investors. Post 2009, digital publication became an acceptable standard in most countries, via their own website or recognized websites that are publicly available.

Regardless of size, asset managers need to manage and control data ownership and ensure efficient dissemination, in different formats, scopes, requirements adapting to different information flows (vendor specific processes) depending on the publication destination. As they grow, they will also find themselves managing the complexities of publishing in multiple countries, languages, currencies with different data definitions or rules depending on each recipient. This leads to a lot of work and a lot of repetitive checks.

45% of fund static data in the market suffers from inconsistencies

Fund data publication is not a core activity for asset managers, yet it is critical to the fund selection process. Data should be accurate, consistent and maintained across all channels, and is expected to be such, but we know that is not always the case. The recent MIFID II and PRIIPs regulation has only sharpened that focus on ensuring the data is right regardless of destination and ultimate audience. A target market that is wrong or not updated may even lead to the point that the product is sold to an investor to whom it is not suitable.

In addition, the impact of data within retail distribution (understood as sales to mass-affluent retail clients) has been increasing drastically because of its reliance on computers. The days when advisers sat with clients to build tailored investment portfolios by going through options ISIN by ISIN are long gone. Many of the investment baskets that retail investors select today are generated by computers based on algorithms that take into account KYC information and product suitability aspects.

Computers often check one data point from more than one source and discard instruments whose data is inconsistent or unavailable. When computers discard products on the back of data inaccuracy or inconsistency, nobody notices it. An asset manager may not distribute a specific fund despite increased marketing efforts but doesn’t know why. Advisers may well be surprised by the absence of products by certain asset managers in their portfolios but can’t put the finger on why that is the case. Very coldly, computers react against inaccuracy and there is no remedy but to publish accurate and consistent data across the entire distribution network.

Ensure the accuracy of the data published by the destination to the market

At Kneip we proactively manage our clients’ data by providing an accuracy and consistency check between our clients’ data and the vendors and platforms, reporting back on, and addressing necessary correction on the asset manager`s behalf, so to eliminate errors or inconsistencies. We have observed that before on-boarding, a new client’s average data consistency sits around 55% only.

Because we are independent (we don’t buy and sell data), our only goal is to ensure fund data accuracy and consistency in the marketplace and the large data vendors and platforms are willing to work with us in achieving this shared goal. Our service is an extension of the back office, allowing asset managers to focus on their core service of manufacturing and distributing product.

The result? We can guarantee the highest data consistency on the market, which means less noise from your teams and more exposure to potential investors. As you gain full control and transparency over your data covering static data, dynamic data, we make sure that the right documents are produced (in the right language) and published along with your fund data, to every destination within your distribution footprint.How accurate is the data you publish?

Kneip can measure the consistency of the data you publish across print/electronic media and distributors.

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