INVESTMENT MANAGERS

At-A-Glance

Client Profiles

Quickly and Competitively Enter the ETF Marketplace

An asset manager saw a niche opportunity in the ETF marketplace – to offer a family of specialized international funds that would provide access to markets not currently being offered by any other ETF sponsor. It realized the inherent challenges in:

  • Breaking into an established marketplace
  • Managing the back-office functions to support an ETF product launch
  • Navigating the tax, legal, and compliance implications associated with the investment products
  • Finding the right strategic partner to contribute to long-term success

The firm contacted the New York Stock Exchange (NYSE) for guidance in selecting outsourcing partners to help develop and distribute its investment products. The NYSE referred the firm to a select group of potential companies, including SEI, who could help in this capacity. After an initial consultation, it was clear to the firm’s principals that SEI had the unique capabilities required to help them develop their initial concept and successfully bring it to market.

Best-in-class approach

While the firm was aware that SEI is at the forefront of the ETF industry, it was our best-in-class approach that proved persuasive, including:

  • An integrated, turnkey solution, including fund accounting and administration, authorized participant (AP) processing, custody and index receipt agent, distribution services, and compliance support.
  • A culture of innovation. We launched the industry’s first straight-through processing system for ETFs, and remain an industry leader dedicated to providing creative and transformational capabilities. In fact, SEI processes over 50% of the world’s ETFs trading volume.
  • Experience. With more than 30 years of experience providing investment managers with outsourcing solutions, we have successfully helped firms in the ETF marketplace—from investment managers launching a new ETF to experienced industry players looking to leverage an efficient, integrated operating model for their existing ETFs.
  • Partnership approach. Knowing SEI would be invested in its success, financially and via mentoring throughout the entire lifecycle of its product development – and would have the flexibility to allow the principals to grow into their business – was a decisive factor in the firm’s decision.

Combining comprehensive fund services, leading-edge technology, and unmatched ETF operating expertise, SEI collaborated with the firm, helping to refine the initial concept and shape the final product.

Innovative operating capabilities

Services provided include:

  • Fund accounting & administration services. We leverage our expertise, technology, and infrastructure we built through our mutual fund solutions – and combine it with an intimate understanding of the distinct needs of ETFs.
  • Trade order processing.  Our web-based trade platform connects the APs, sponsor, distributor, custodians, and transfer agents in one straight-through electronic process. It incorporates fund parameters and exceptions set by the sponsors to automatically assist with trade input. APs can:
    • Submit and review ETF creation and redemption transactions through our secure, web-based platform
    • Easily update an order prior to cutoff time and access historical records
    • Acknowledge and confirm orders through an instantaneous affirmation process followed by an electronic confirmation process
  • Call/contact center. This includes broker/dealer and investor services, generating responses to inbound, outbound, and e-mail queries, performing targeted calling campaigns and surveys, and performing lead capture activities.
  • Compliance, tax and legal support services. Our ComplianceAdvantage program provides clients with timely interpretation of new and pending regulations, identification of emerging industry best practices, and various monitoring tools to assist with the many aspects of compliance oversight.
  • Distribution and sales. We help generate, profile, and qualify leads, as well as assist in building relationships and developing business within multiple distribution channels. We also help educate advisors, research teams, and decision-makers about their brand and product.
  • Turnkey website solution. Clients quickly have a web presence that meets regulatory requirements, and includes premium/discount reporting, fund holdings, performance and regulatory filings. All data points are updated daily – and no new development is required when new funds or clients are added.

Success today and tomorrow

As a result of working with SEI, the firm was able to place a unique and financially competitive product in the ETF marketplace quickly and affordably, establishing a foundation for future success. Notably:

  • Assets are now in excess of $1 billion
  • It increased the number of funds it offered more than fivefold, and has continued plans for growth
  • They were able to continue investigation of new sectors and markets for future ETF development

To find out how SEI’s services can help your firm bring ETFs to market quickly and efficiently, contact us online, by phone +1 610.676.1270 or email managerservices@seic.com.