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Executive Outlook 2011: Recommendations for Navigating a Changing Landscape
In addition to compiling responses from over 120 managed solutions executives, our 2011 Managed Accounts Executive Outlook offers recommendations for how managers, sponsors and outsource providers can successfully navigate today’s changing business dynamics and operational demands.
Coping with cost basis: A framework for the managed solutions industry
In the managed accounts industry, investment managers often track gains and losses for client accounts. However, they are not required to report this information to the Internal Revenue Service, and typically do not share it with the client. Historically, issuers of 1099s, including broker-dealers, have reported only the gross proceeds from the sale of securities.
Under the impending cost basis reporting law, a provision of the Emergency Economic Stabilization Act of 2008, broker-dealers and custodians will be obligated to report the cost basis for all covered securities and to indicate if they were short- or long-term gains or losses.
Consequently, managed account sponsors must have the necessary technology in place to do native tax lot accounting in their custodial systems. And custodians as well as broker-dealers have invested untold sums upgrading their accounting and portfolio systems to comply with the imminent regulation.
The three stages of managed account client service
The managed accounts industry is stepping up its efforts to streamline electronic communications. For its part, the Money Management Institute (MMI) has led a longstanding drive to develop messaging standards in hopes of easing the exchange of data among program sponsors, asset managers and other stakeholders in the managed account supply chain.
IT Under the Spotlight as Advisor Migration Continues
Gib Veconi, CEO, Peridrome
The continued migration among wirehouse advisors is creating tremendous operational pressures on receiving firms that are in a varying state of preparedness to support them. Top producers expect to get up and running without a hitch to protect and grow their business. Consequently, non-wirehouse firms are scrambling to implement the necessary infrastructures to support expat advisors with the same or better technical resources they left behind.