Most of us who played with toys in the Dark Ages should remember the tilt maze, that ridiculous, maddening device you slanted back-and-forth with a set of knobs to move a stupid little ball.

Fundsters are often reminded of the game when they ponder the challenges and machinations involved in getting on a platform, and on that platform's select lists and portfolios.

Often fund executives agonize over the fund platform. Just what do they need to do to get on the platform? Does a fund need a certain level of flows; some kind of expressed support from a big enough pool of advisors; any particular revenue-sharing agreement or flat fees? What about performance, what kind of performance? Yada, yada, yada.

Welcome to the world of fund supermarkets and platforms after the crusades of former New York State attorney general Elliot Spitzer against broker-dealer commissions. Nobody knows who should pay what and, what's worse, nobody even knows how to talk about it. Hence, an awkward and agonizing grey area that leaves fundsters and other financial professionals scratching their heads.

This is why the FundVest 200 list really matters. With Pershing deciding to go hyper-institutional, totally outsourcing the selection process to Lockwood Advisors and BNY Mellon Manager Research Group, the custodian may ultimately remove some of the tilt from the maze.

And they really take the Chinese Wall seriously. Pershing managing director Sandra Bolton, who oversees the custodian's mutual fund platforms, doesn't even want to hear about it. For that matter, no one at Pershing had a clue who was on the list until Friday, May 30th.

That made preparing for the INSITE 2014 meeting interesting. Pershing managing director Tom Sholes told MFWire that he and Bolton had to make a huge mass of metal and plastic Fundvest 200 trophies (there are currently 211 with more coming), with lots and lots extras. Many fundsters exhibiting at the event initially had no idea what the plaques were even for.

Fund firms can't even lobby to get onto the list. They are told after the fact.

That's not to say that there aren't challenges to getting onto the list. Firms have to pass muster on a variety of institutional-style criteria, like how their firm is organized, how they articulate their investing goals, and how consistently they follow their goals.

But at the very least, selection to FundVest 200 is divorced from the platform business concerns of Bolton and her group, and that should simplify things.

The only thing firms need do to be eligible for selection is get onto the non-transaction fee FundVest platform. Bolton told MFWire that entry onto the platform is a simple enough matter.

And getting onto a select list can be a big deal, Bolton said. She frequently shares conference panels with her counterparts from other platforms and has heard from them that select lists can drive as much 60 percent of the volume on a platform.

However, moving to a non-transaction platform is a big decision for a fund firm. Generally speaking, it costs roughly 40 bps to distribute a fund. Going onto a non-transaction platform means that the firm would have to eat those expenses. That can be tough to swallow if an active manager offers a fund with a very low expense ratio, taking into account the PM costs, the shareholder servicing and whatever other overhead.

But at least the choice is relatively simple. Deal with the costs and get on, or don't. You don't have to worry about any other mishegas to tilt that ball around the maze. 

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