Omnibus Clearing
What is Omnibus Clearing and Why is It Important?
Omnibus Clearing is defined by its ability to control all aspects of an investor's service experience. This control permits a financial entity to customize and control both the web based 'front end' experience as well as the traditional legacy custodial books and records experience of an investor. The Omnibus model also assures not only lower service costs but also presents additional revenue opportunities for the sponsoring financial entity
Omnibus clearing opportunities exist in retirement plan processing, mutual fund subaccounting, digital 'robo' advice wealth management plans, custodial crypto wallets, plus innovative general securities offerings. Its legal framework starts with a custodial nominee account holding client assets in total while the subaccounting system or sub custodial system holds and services all the data for the individual clients.
Omnibus Clearing is used internationally by many financial participants. It is used extensively by the DTCC for general securities holding the books and records for an issuer's investors for its broker dealer participants. More than 70% of all mutual fund positions are held in omnibus form by broker/dealers on behalf of the fund's transfer agency.
What are the Types of Omnibus, their Advantages and Economics?
We have a variety of white papers and discussion documents on the types of omnibus recordkeeping, their advantage and economics. These white papers include who the industry players are that use these process and provides statistics on several specific sectors including mutual subaccounting, retirement plan and Digital Advice offerings (Robo).
Our Services
Consulting on Business Models
Providing information on the various omnibus recordkeeping business models and the implications for financial service entities is one of the consulting options offered byus. Targeting specific market segments for this service is a vital component of a business plan that we can assist with. The range of possible models includes: wealth management digital advice, crypto wallets, mutual fund supermarkets, money fund sweep, retirement plans and specialty services for 529 plans, HSA savings plans, state sponsored retirement plans and the 'direct at fund' brokerage model . The service models impact directly investors, advisory and brokerage firms including both introducing and self-clearing entities and include efficiencies and economic impacts to all participants.
A short list of consulting possible opportunities that we can address include;
1. Review of your existing compliance and auditing capabilities and systems for investor recordkeeping and determine the impact of omnibus processing.
2. Discuss volume trade and transaction through put requirements for significant increases expected in adoption. Review expected system pinch pointes in that need to be addressed in current operational situations and address technology options to address these issues.
3. Review the expected and current issues that exist with current legacy platforms and compare the this to the omnibus processing model.
Requirements and Architecture Support
We can provide a suite of services for the creation of an omnibus clearing system. These services include both user and technical support. They include base use case documentation, requirement documents for the major front end and back end functional aspects of a modern cloud based/ internet serviced system. Business analyst support is available to customize these requirements for your unique needs. Technical architecture requirements documents are available that cover platform architecture including user application, technology, deployment and operational service.
A Base code framework is available to purchase to expedite your start in building your own solution.
Service to Building a Custom Solution
We will support your plans by supplying people, base code and our expertise to help you