Cofunds has launched a service for wealth managers to make it easier for them to include funds in private client portfolios.
Cofunds Institutional Services provides execution, settlement, reconciliations and custody services to wealth managers as well as dealing with corporate actions like mergers.
Stephen Mohan, head of Cofunds Institutional Services and managing director of Cofunds Operational Services, says the service also calculates the amount of trail commission and distributions due to each client. It also ensures the same price is paid for funds if clients deal on the same day.
This will ease what Mohan describes as substantial operating problems of dealing and settling funds compared to stocks.
“Cofunds Institutional Services will cater for the needs of discretionary asset managers and private client stockbrokers as they make increasing use of funds,” says Mohan.
In launching the service, Cofunds is adding more than 300 funds to its platform. Mohan says these extra funds and institutional share classes are only available to wealth managers.
Mohan says there are no charges for the new service. Cofunds receives an annual fee of up to 0.25% for retail funds and up to 0.20% for institutional funds and share classes.
To use Institutional Services, wealth managers must be able to deal electronically with Cofunds.
The service is being launched because wealth managers and institutional clients now account for 20% of Cofunds’ total business and 2.7 billion is administered through this service.
Mohan adds that funds under management in collectives in the wealth management market has grown more than 250% over the past five years.