A survey by information logistics specialists Altus found the errors ranged from misdirection of funds, incorrect fund selection and mis-keying of instruction data.
Altus believes much of the blame for these errors is due to widespread use of manual investment instructions. It said that 77% of TPAs still rely on fax to send investment instructions to fund managers, while 16% send investment instructions by post.
Further, half have no electronic records whatsoever, only filing paper copies.
Ben Cocks, product manager at Altus, said: “Simply replacing the fax with an electronic message will lead to very little improvement on its own.
“Only by automating the end-to-end instruction cycle will an administrator gain the most benefit from straight-through processing.”
Altus is using this research to publicise its end-to-end investment instruction processing and auditing solution. It estimates only 3% of TPAs use such technology.
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