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Rating:Can Tech Fix the Breakpoint Mess? Not Rated 4.0 Email Routing List Email & Route  Print Print
Thursday, February 13, 2003

Can Tech Fix the Breakpoint Mess?

by: Sean Hanna, Editor in Chief

Is there a technological fix to the problem fund firms face in recognizing the correct breakpoints? One firm thinks that there is. Mantas Behavior Technology says that the software it developed to uncover money laundering, front running and other suspicious is up to the task. The Fairfax, Virginia-based firm is already installing the tool as part of its Broker Surveillance Monitor for an undisclosed number of clients.

Fund firms contend that part of the problem in charging the appropriate breakpoints lies in how advisors input trades into their order systems. If the advisor does not input the trade data correctly, or inform the fund firm of other accounts in the client's household, the firm is faced with a near impossible task of recognizing the correct breakpoint.

The Mantas technology is able to analyze and monitor multiple, related accounts over a period of time, says Jim Hayden, chief strategy officer at Mantas.

"Identifying clients and families that deserve better pricing requires a technology that can link related accounts like those that are part of a household but may not be identified as such, analyze purchases within a family of funds, and monitor purchases over time," said Hayden.

The tool works by applying behavioral detection and data mining tools to dig through millions of records looking for hidden relationships and potential problems firms need to know about, he said. Because the system monitors accounts over time, it could identify brokers attempting to break a purchase down into amounts designed to avoid giving a customer breakpoint pricing.  

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