Interview: FE fundinfo’s Philipp Portmann and Stephen Mitchell discuss automating rebate management

FE fundinfo’s Philipp Portmann, head of business development and strategy, and Stephen Mitchell, head of advisor product strategy, share how automated rebate management empowers asset managers to focus on their core skills and comply better with the FCA’s consumer duty regulations.

Funds Europe: FE fundinfo’s rebate and distribution channel management initiative would help streamline the process for asset managers. Why is this important today?

Philipp: Our early conversations with asset managers have been positive, indicating a significant demand for outsourcing certain fee and distribution channel management functions. While distributors have already outsourced many of these functions to fund platforms, asset managers have lacked a global solution tailored to their needs. 

Firstly, there is ongoing debate regarding the potential banning of rebates, which introduces uncertainty and prompts them to seek alternatives. Besides, ongoing discussions on transparent reporting, value for money, benchmarking, distributor segregation as well as distributor KPIs have triggered many to review their current systems, technology and back-office processes. Additionally, the industry is experiencing cost pressures and reduced margins, prompting asset managers to explore ways to optimise resource allocation.

By providing a tailored rebate and distribution channel management solution, we aim to offer a comprehensive and modular service meeting their requirements. Our collaborative discussions with them allow us to understand their pain points, leverage their insights and develop a service aligned with their business objectives. 

Funds Europe: What have been your biggest lessons from this initiative? 

Philipp: Manual processes and outdated technologies often hinder asset managers’ ability to calculate rebates accurately and efficiently, and our service addresses this by automating calculations and reducing the risk of errors. Their interest in our pilot programme highlights the recognition of efficient rebate and distribution channel management processes, rebate calculation and reconciliation. Asset managers recognise the value of governance and oversight in their distribution networks, and our distribution channel management service allows them to monitor and manage their distribution partners effectively, providing them with better control and visibility over sales channels. We aim to continually refine and enhance our offering to ensure asset managers can focus on their core expertise: managing and selling investment strategies.

Funds Europe: What features does FE fundinfo plan to add?

Philipp: Intending to go live by 2023 end, we have developments in the pipeline- like API integrations connecting our clients’ customer relationship management and rebate systems seamlessly. The integration will streamline data exchange, improve efficiency, and provide a holistic view of rebate management within their existing infrastructure. Through our collaborative pilot programme, we seek asset managers’ input to ensure that the final product aligns closely with their business requirements and offers maximum value. We are also working on intuitive dashboards and customisable reporting functions to help asset managers gain insights, track performance, and make informed decisions based on real-time data. Additionally, we plan to incorporate advanced analytic capabilities to provide insights into rebate performance, trends, and impact and AI integration for rebate reconciliations.

Funds Europe: You’ve partnered with asset management and due diligence platform, Door, to help modernise asset manager-client communication. How is it going?

Philipp: Door’s range of qualitative data on asset managers, which supports fund distributors in their due diligence, compliments our place in the fund ecosystem as high-quality fund data and documentation providers throughout a fund’s lifecycle and supporting market participants to become better connected and better informed. We have also created a joint solution to the Financial Conduct Authority’s (FCA) Consumer Duty regulation, which comes into full force in July. Combining our data set with Door enables our mutual clients to meet the FCA’s requirements easily and efficiently. We will soon launch the first iteration of our data partnership.

Funds Europe: How are you helping fund managers comply with the FCA’s Consumer Duty regulations? 

Stephen: FE Fundinfo has integrated two key products in its financial advice hub – FE CashCalc and FE Analytics – which will save advisors time during the financial planning process. This product suite helps financial advisors onboard and engage clients, create financial plans, analyse investment options, and invest in managed portfolios. Advisors can utilise our technology, data and investment portfolios as part of their advice process to meet Consumer Duty requirements. Our single advice ecosystem enables greater efficiency, reduces manual re-keying of data, and therefore provides them with more time to spend with clients.

Funds Europe: Why should financial advisors be integrated, especially between their cashflow planning tool and back-office systems?

Stephen: Integrating technology tops the wishlist of many financial advisor surveys – with 90% of respondents in a FE fundinfo advisor survey telling us they believe integrations between software providers were important to their financial planning process. However, per data from FE CashCalc, only 28% currently have an active integration between their FE CashCalc account and back office systems. For the 28% that did integrate with their back office, nearly 300,000 pensions, investments, incomes, addresses and other information were exported from FE CashCalc to a back-office system in 2022 alone. This eliminated the need for nearly 300,000 client information items to be manually re-keyed, helping make financial planning processes efficient while retaining data integrity. Data also showed that, on average, those who accomplished the integration have 32 more clients within FE CashCalc than someone who has yet to integrate.

If we can support the software integrating process, there is a huge opportunity for the profession to provide a more efficient and effective service.

Funds Europe: FE fundinfo’s agreement with MSCI last year gave them access to your full universe of European energy, sustainability and governance (ESG) template data which plays a critical role for financial market participants. How do you think this will deal with disclosure challenges and underreporting?

Philipp: MSCI is for all the customer segments and financial advisors, but it’s also for asset managers and global private banks. Our cooperation with MSCI is in two ways. First, they’re included in our form reporting. For instance, an asset manager wants to produce ESG infection for all of their firms or regulatory report in EDT SFTR report. The game for us is we already have the MSCI ESG data in-house to make our clients’ life easier. Most of our clients already have an MSCI ESG data licence. However, by already having the data incorporated in our data warehouse to produce all the outputs our clients need in a standardised way. New regulation, particularly across Europe, has accelerated- not to mention Hong Kong and Singapore -which could be overwhelming for clients.

Funds Europe: What are some top trends in the field of investment fund data and technology?

Philipp: We will see more regulations, particularly on the ministry side. The amount of regulations we have seen coming up on the ESG side over the last few years will drive more appetite for investment data and drive consolidation. Asset managers, distributors and wealth managers are now preferring a single provider of various datasets to make sure the data is coherent. 

© 2023 funds europe



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