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By Chris Whitside

OK, let's do the math. An advisor, assistant or back-office administrator types an investor's change of address into his company's database. Let's say that takes one minute. The person then has to figure out who else needs the change of address. Let's say the investor owns mutual funds from three different companies. Conservatively speaking, we'll guess that it takes three minutes to look up contact information and fax numbers for the three companies. It then takes three minutes to prepare and send each fax with the change of address. We're now at 13 minutes of that person's time. But, oops, a little later, he gets a phone call — one fax didn't go through: "Would you mind sending it again?" Let's say that's two more minutes for a total of 15 minutes. For the moment we'll ignore the time it takes for recipients of the change of address to deal with the new information on their end.

Now let's look at what's required from a company using FundSERV's Non-Financial Update service. One person types in the change of address. That's it. One minute. Period.

"Saving a few minutes for one address change isn't very impressive until you multiply that timesaving over the thousands of messages fund companies typically contend with every year," says FundSERV business analyst, Michael Reaume. "And it's not just address changes. Think of all the little changes that are made to account information all the time. Adding or changing beneficiaries and modifying distribution payment instructions are just two more things that come to mind. There's really no reason to handle those changes more than once. FundSERV's Non-Financial Update (NFU) service is automated end-to-end and facilitates the data exchange transparently."

FundSERV's NFU service is built on XML technology and on standards developed and shared between FundSERV and its customers. Once in place, it is invisible to users. Information, such as an address change that must be shared between designated parties, is exchanged in a batch process with updates posted overnight.

As with most of FundSERV's services, NFU's effectiveness will increase with the number of customers adopting the technology. Fortunately, many customers have already done the arithmetic and, as of February 2004, 70 distributors and 148 fund companies were using this service. Similarly, the number of messages being exchanged has climbed rapidly. Even so, not everyone is rushing to adopt the service.

"For fund manufacturers NFU has significant advantages," notes Theresa Redmond, vice president of operations at FundSERV. "The sheer volume of changes that the big companies must deal with demands an automated solution. On the other hand, some distributors may not be large enough to realize the savings inherent in NFU, since there are costs for them in adopting this service. In the end though, like most of the services from FundSERV, NFU will save time and money and help to make everyone more competitive."

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