December 13, 1989
TO: MEMBERS - ONE PER COMPLEX NO. 39-89
OPERATIONS COMMITTEE NO. 24-89
RE: ICI SURVEY OF TRANSFER AGENT FEES*
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In 1987 and again in 1988, the Institute commissioned the
accounting firm of Coopers & Lybrand to perform comprehensive
studies of mutual fund transfer agent costs, services and billing
practices. The final reports presented detailed analyses of data
grouped by investment objective, method of distribution,
classification of transfer agent arrangement (external, captive,
etc.), number of accounts, dividend frequency and other criteria.
These studies were widely regarded by ICI members as
providing essential information in reviewing their transfer
agency arrangements. On the basis of an Operations Committe
recommendation, a third study will be conducted and completed as
early as possible in 1990.
This year, primary responsibility for conducting the study
will remain with the Institute staff. The Institute has again
retained Coopers & Lybrand on a consulting basis to assist with
the study and to maintain continuity with the previous
methodology. It is our current intention to update this study
annually.
The 1990 survey will request data regarding transfer agent
costs, services and billing practices for participating funds'
fiscal years ending during the 1989 calendar year. While the
survey will, to the extent practicable, attempt to include the
same respondents as the 1988 survey for the sake of
comparability, it will seek to increase the sample size by some
60 funds to a total of approximately 400 funds of about 70
different complexes, in order to reflect growth and change in the
industry and to ensure representational validity. The final 1990
report will provide comparative analyses of the current data to
the data collected in the prior studies.
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*Please note: ONLY PARTICIPANTS WILL RECEIVE SURVEY RESULTS.
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IT SHOULD BE NOTED THAT AS WITH THE PRIOR SURVEYS, THE 1990
SURVEY REPORT WILL BE PROVIDED ONLY TO FUND GROUPS WHICH CHOOSE
TO PARTICIPATE. THE OBLIGATIONS OF PARTICIPANTS ARE (1) TO
FURNISH TRANSFER AGENT COST DATA ON A CONFIDENTIAL BASIS TO
COOPERS & LYBRAND IF REQUESTED AND (2) TO PAY A PROPORTIONATE
SHARE OF THE COST OF THE SURVEY. SOME PARTICIPANTS MAY NOT HAVE
TO PROVIDE DATA SINCE THE SURVEY WILL BE BASED ON DATA FROM A
REPRESENTATIVE SAMPLE OF FUNDS, BUT EQUITY REQUIRES THAT ONLY
GROUPS WHICH AGREE TO PROVIDE THEIR DATA RECEIVE THE RESULTS OF
THE SURVEY. As with the 1988 survey, the cost of this year's
survey will be shared by the participants in accordance with an
asset based fee schedule. The cost of participation in the
survey, which will be billed prior to distribution of the final
report, is as follows:
TRANSFER AGENT PARTICIPANT FEES
Total assets of Open-end Funds Member Participation
in Complex (as of 11/30/89) Fee
Over - $10 Billion $6,000
$5 - $10 Billion $5,000
$2 - $ 5 Billion $4,000
$1 - $ 2 Billion $2,000
$0.25 - $ 1 Billion $1,000
Under - $ 0.25 Billion $ 500
The Institute will sponsor a one-day workshop in
Washington, D.C. during January, 1990 (the tentative date is
January 18) for member firms who have agreed to participate and
have been selected for the survey sample. The purpose of the
workshop is to review the survey questionnaire in detail with
individuals who will be responsible for actually completing the
questionnaire and to answer as many of the questions as possible
that will inevitably arise throughout the course of the survey.
Experienced survey team members of Coopers & Lybrand will lead
the discussion, which will include a general overview, a question
and answer period and smaller group instruction sessions. Based
on our experience with this survey in prior years, this workshop
will be extremely valuable in facilitating the timely delivery of
accurate data. If you agree to participate and are selected for
the survey, we strongly urge you to send the appropriate person
to this workshop. Survey participants will be notified of the
exact date and place as soon as they are determined.
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ACTION REQUESTED
Your organization is invited to participate in the transfer
agency cost survey. So that we may proceed with this project as
quickly as possible, it is important that we hear from you
promptly as to your interest in participating. Please return the
attached form to the Institute by January 5, 1990 to indicate
whether or not your organization will participate. You may
contact Donald E. O'Connor, Vice President - Operations (202/955-
3550) if you have questions about this project.
David Silver
President
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