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Setting a high bar
The Global Custodian Mutual Fund Survey continues to reflect an impressive
level of satisfaction on the part of North American clients.
I
n 2015, Global Custodian conducted a
review of client perception of North
American mutual fund administration
over a ten-year period. This showed a
steady improvement up to and including
the record scores achieved in 2013. While
slight declines were recorded in 2014 and
2015, last year’s rebound has continued
in the current survey. The survey average
across all eight service categories in 2017
is 6.30 – the highest overall score so far.
As Table 1 illustrates, six of the eight
service categories posted gains. In most
cases the improvement was slight, but for
Compliance and Regulation, the increase
of 0.27 points was statistically meaningful.
Scores for Value Delivered improved
further from last year’s 0.34-point leap
and now average 6.05. Across all Glob-
al Custodian surveys, it is rare for this
category to rate above the high-fives as
clients are understandably reluctant to
signal that they are more than satisfied
with the price they are paying. A score
above 6.0 for Value Delivered reflects well
on the industry as a whole and the major
providers operating within it.
The only service category to record a
double-digit decline is Distribution Sup-
port, which last year recorded the biggest
increase. This, however, remains rela-
tively low on the scale of client priorities,
registering, as in 2016, eighth out of the ten
categories. There were nevertheless several
comments from clients suggesting Distribu-
tion Support as an area of weakness.
Priorities
Table 2 shows the relative priority at-
tached by respondents to each of the eight
aspects of service covered in the survey in
both 2016 and 2017. While the top three
categories are the same in both years,
the order has shifted. Last year, Fund Ac-
counting and Valuation ranked first with
Relationship Management and Client
Service second and Costs and Value De-
livered third. Once again, a combination
of regulatory pressure on transparency
and competitive pressures in a challeng-
ing market have focused attention of
fund groups on charges and ensuring that
they and their clients are getting the best
possible value.
TABLE 1: OVERALL SCORES
TOTAL MFA 2017 2016 2015 Difference:
2017-2016
Relationship Management and Client Service 6.28 6.27 6.01 0.01
Value delivered 6.05 6.00 5.66 0.05
Fund accounting 6.42 6.33 6.28 0.09
Transfer Agency 6.54 6.42 6.12 0.12
Distribution support 6.14 6.39 5.99 -0.25
Reporting 6.22 6.18 6.17 0.04
Compliance and regulation 6.56 6.29 5.99 0.27
Operations and custody 6.17 6.18 6.03 -0.01
Average 6.30 6.26 6.03 0.04
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Global Custodian
Summer 2017
TABLE 2: RELATIVE PRIORITIES
Priority 2107 2016
Relationship management & client service 1 2
Costs and value delivered 2 3
Fund accounting and valuation 3 1
Transfer agency 6 5
Distribution support capabilities 8 8
Fund reporting 5 7
Compliance effectiveness 4 4
Quality of custodian services 7 6
In this year’s survey, Relationship Man-
agement and Client Service has returned
to top position. To some extent, the fact
that all service categories score in the
‘Very Good’ range takes the pressure off
the need to compare individual service.
The measure remains useful, however, in
suggesting which functions clients would
pay most attention to in the event of a de-
terioration in service received from their
existing provider.
An alternative way of looking at this is
to analyse the percentage of respondents
giving top priority to each service catego-
ry. Table 3 shows that almost 50% of sur-
vey respondents considered Relationship
Management and Client Service as their
first or second priority. Last year, 62% of
all respondents placed Fund Accounting
in the same position. Operations and
Custody remains at or near the bottom of
the list. Custody is perhaps the ultimate
‘traffic light’ service – as long as the lights
are working properly, they tend to be tak-
en for granted and so it is with basic asset
administration.
Interestingly, despite the strain on
resources resulting from expanding
compliance requirements, only 15% of