Direct trades at fund company

[MSN]

I work for a TPA that has relationships with a number of fund companies. We handle recordkeeping for our clients and send trade instructions to the fund companies when requests are made through our voice response or websites. As long as requests are made through our systems, everything works fine. Some sponsors and/or their financial advisors have found a way to send trades directly to the fund company for purchases, withdrawals and exchanges. When this happens, our recordkeeping system is obviously out of balance until we can figure out whose account the trade is attributable to.

Does this happen to other TPAs? If so, how do you handle these situations? If not, what are you doing to avoid these situations? Thoughts?

Thanks!

[Bill Presson]

I work for a TPA that has relationships with a number of fund companies. We handle recordkeeping for our clients and send trade instructions to the fund companies when requests are made through our voice response or websites. As long as requests are made through our systems, everything works fine. Some sponsors and/or their financial advisors have found a way to send trades directly to the fund company for purchases, withdrawals and exchanges. When this happens, our recordkeeping system is obviously out of balance until we can figure out whose account the trade is attributable to.

Does this happen to other TPAs? If so, how do you handle these situations? If not, what are you doing to avoid these situations? Thoughts?

Thanks!

I can't even imagine the difficulty in tracking this. I would handle it by billing a million dollars to the client for trades nor processed through our system. Seriously.

[MSN]

Unfortunately, billing the client doesn't fix the balancing issue....and neither would resigning altogether, which we have done. We are billing significant sums of money for the correction and immediately disabling participant web/VRU access to prevent additional problems, but would like to figure out how to eliminate this issue altogether. Any ideas on how to prevent the issue would be great!