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Over the past several years one of the largest financial services firms in the United States  sought to bring more control and quality to the posting of dividends, income and income accruals for participant accounts within its defined contribution retirement plan business base.

Due to the process required by their participant recordkeeping platform, income postings were often required to be manually updated, often utilizing a back-dated transaction process, and often requiring final adjustments to prior transaction history on the income accrued.  Without a standardized approach to such back-dating and adjustment processing, client accounting errors were often made, and system reconciliation items associated with these postings continued to grow.

The client recognized that handling of dividends, capital gains distributions, income accruals and payments, and ex-date / pay-date differences was going to continue to be a manual process due to the required sequence of postings on their participant recordkeeping system.  The client desired to put in place a standardized process that would:

• Minimize errors in participant accounts
• Provide easier reconciliation and reconciliation item clearance
• Maintain correct share / unit balances
• Enable correct period reporting
   

Enterprise Iron (EI) worked with the Firm’s Institutional Operations Management Group to understand the Firm’s needs for looking to an outside firm for this important business service.   EI collaborated with operations management to create a project plan, and establish appropriate milestones and success measures. EI validated the required team structure, roles, responsibilities, competencies and experiences required to meet the Firms’ expectations. EI proposed and configured a consulting team possessing all the required knowledge, experiences, competencies and skills and placed the team onsite at the client’s facilities in January, 2007.

Since arriving onsite the team successfully provided a focused group to clear outstanding income related reconciliation items, standardized and automated workflows, developed process controls, and designed and developed internal management reporting that allowed for effective oversight of all back-dated income activities.  Project deliverables included the receipt, investigation and adjustment of the contents of daily dividend reports that reflect any adjustment affecting dividend periods.
 

Institutional clients of the firm and auditors both praised the improvement in quality and consistency.  The firm succeeded in defining and implementing a back-office business operational methodology and practice for providing high-profile issue dividend adjustment services complete with standards for: approaching problems, defining project scope and deliverables, managing Firm, institutional client / plan sponsor and auditors expectations; and successfully bringing up to date the dividend adjustment files.