October 6, 1993
TO: MEMBERS - ONE PER COMPLEX NO. 70-93
OPERATIONS COMMITTEE NO. 34-93
SMALL FUNDS MEMBERS NO. 15-93
TRANSFER AGENT ADVISORY COMMITTEE NO. 52-93
RE: SECOND NOTICE - 1993 ICI/C&L TRANSFER AGENT FEE SURVEY
__________________________________________________________
As we recently informed you, the Institute is inviting your
organization to participate in the 1993 Investment Company Institute/Coopers &
Lybrand Mutual Fund Transfer Agent Fee Survey. At this date, we have received
commitments from members representing nearly sixty percent of industry assets.
While we are encouraged by this level of interest, we believe strongly that
additional members will want to participate in the 1993 survey.
Therefore, we are extending the deadline for responding to the
participation request to October 28, 1993. If you have already replied, thank
you for your prompt response. If you have not yet replied, or if you are still
considering whether to participate, please review this memorandum and return your
participation form to the ICI as soon as possible so that we may proceed with
this project in a timely fashion. As with prior surveys, the final results will
be made available only to those fund groups who agree to participate and pay a
proportionate share of the cost in advance.
THE 1993 SURVEY
The Mutual Fund Transfer Agent Fee Survey is widely regarded by ICI
members as providing essential information for reviewing transfer agency
arrangements. The survey also provides mutual fund directors with an independent
means of comparing their funds’ transfer agency fees with other similar funds.
On the basis of an Operations Committee recommendation, a fifth study will be
conducted for 1993 which will provide comparative analyses of current data to
data collected in the 1991 and 1989 studies.
The Institute has commissioned the accounting firm of Coopers & Lybrand
to assist the Institute staff in performing the study. This study was previously
performed for 1986, 1987, 1989 and 1991. The final report will present detailed
analyses of transfer agent per account fees grouped by fund type (money market,
fixed income, equity), method of distribution, classification of transfer agent
arrangement (external, hybrid, remote and captive), dividend frequency, transfer
agent location and other criteria.
SURVEY SAMPLE
To maintain comparability with prior survey results, the survey will
attempt to include the same respondents as the 1991 survey. In addition, the
sample size will be increased appropriately to reflect industry growth. The
increase should allow us to maintain the percent of the industry covered by the
survey both in terms of the number of funds and total assets.
Prior survey participants have indicated that earlier identification of
funds selected for the survey sample would better enable them to prepare for the
survey and complete the survey questionnaire. The Institute and C&L will
identify the survey sample and provide survey participants with a list of their
funds which have been selected in late October.
SURVEY QUESTIONNAIRE
A major objective in conducting this year’s transfer agent survey will
be to deliver the final report as early as possible in 1994. To expedite the
completion of the 1993 report, survey data will again be collected in two phases.
The first phase will collect fund specific data in November 1993 for funds in the
sample with fiscal years ending September 1993 and prior. The second data
collection phase will begin in January 1994. The second phase will collect
complex-wide survey data and fund data for funds with fiscal years ending in
October, November and December 1993.
The urvey questionnaire will again be distributed in automated format.
In order to access the automated questionnaire you must have an IBM PC or
compatible hardware with four megabytes of RAM and have installed "Windows"
(version 3.1) as the operating environment. A color monitor and a mouse are
recommended but not required. These hardware and software requirements are the
same as those for the Institute’s current Quality of Shareholder Service survey.
A hardcopy version of the questionnaire will also be provided to each sample
participant.
SURVEY QUESTIONNAIRE WORKSHOP
The Institute will sponsor a one-day workshop, hosted by Coopers &
Lybrand in Boston during November 1993 for member firms who have agreed to
participate and have been selected for the survey sample. The purpose of the
workshop is to review both the automated and hardcopy versions of the survey
questionnaire in detail with individuals who will be responsible for actually
completing the questionnaire. Similar workshops conducted for previous surveys
were well attended and participants have indicated that they are extremely
valuable in completing the questionnaire. Experienced survey team members of
Coopers & Lybrand will lead the discussion, which will include a general overview
presentation, presentation of the automated and hardcopy versions of the
questionnaire, 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 your funds are included in the survey sample, we
strongly urge you to send the appropriate person to this workshop. Survey
participants will be notified of the workshop date and location as soon as they
are determined.
SURVEY ENHANCEMENTS
A sub-group of the Institute’s Transfer Agent Advisory Committee was
convened in February of 1993 to review the survey questionnaire and to recommend
additional areas of study. The Survey Advisory Committee met in June of this
year to approve modifications and provide additional member input. As a result
of these meetings we plan to incorporate several new analyses on multiple class
funds, retirement plan servicing and related fees, and telephone and mail
operations.
PARTICIPANT FEES
As with prior surveys, THE 1993 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
for funds selected to be included in the survey sample, 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. However, equity requires that only fund groups which agree in
advance to provide their data receive the results of the survey. As with prior
surveys, 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 during the data collection phase of the project, is
as follows:
TRANSFER AGENT SURVEY PARTICIPANT FEES
Total Assets of Open-end Funds Member
in Complex (as of 6/30/93) Participation Fee
Over - $10 Billion $6,500
$5 - $10 Billion $5,500
$2 - $5 Billion $4,500
$1 - $2 Billion $2,500
$0.25 - $1 Billion $1,200
Under - $0.25 Billion $ 500
PEER GROUP ANALYSIS
An additional benefit of participation in the survey is the availability
of customized analyses based on current survey data. Subsequent to completion
of the survey, participants may contact the Institute and request special peer
group analyses. These analyses will compare your funds’ per-account fee to the
average per-account fee of a group of similar funds. Survey participants may
specify types of analyses as well as the fund groups to be included in the peer
group. Peer group analyses will be prepared by Coopers & Lybrand subject to a
separate agreement.
ACTION REQUESTED
Your organization is invited to participate in the 1993 transfer agent
cost survey. So that we may proceed with this project it is important that we
hear from you promptly as to your interest in participating. Please return the
attached form to the Institute by October 28, 1993 to indicate whether or not
your organization will participate. You may contact the undersigned (202/955-
3552) Greg Smith (202/955-6232) or Justine Phoenix (202/955-6259) if you have any
questions regarding this project.
Donald J. Boteler
Vice President - Operations
MUTUAL FUND TRANSFER AGENTS
TRENDS AND BILLING PRACTICES
INVESTMENT COMPANY INSTITUTE/COOPERS & LYBRAND
1993 SURVEY PARTICIPATION FORM
CHECK ONE
( ) The mutual fund group listed below agrees to participate in the
ICI/C&L Mutual Fund Transfer Agents Trends and Billing Practices
Survey. Participation includes a commitment to furnish transfer
agent cost information if one or more funds in your complex are
selected for the survey sample and a pledge to pay a share of the
survey cost based on the total open-end fund assets of your group.
( ) The fund group listed below will not participate.
FUND GROUP:
ADDRESS:
TOTAL ASSETS 6/30/93:
SURVEY CONTACT PERSON:
TELEPHONE:
AUTHORIZED SIGNATURE
NAME (PLEASE PRINT)
TELEPHONE
RETURN BY MAIL OR FAX TO:
Gregory M. Smith FAX 202/293-1058
Director - Operations/Compliance
Investment Company Institute
1600 M Street - Suite 600
Washington, D.C. 20036