Updated May 15, 2020
Get Your Ducks in a Row: The Power of Data Aggregation and a Centralized Database
Financial Activity Data Aggregation
Our incentive compensation management solution supports a wide variety of standard sources of commission information including: National Financial, Pershing, Beta, First Clearing Corporation, NSCC, DTCC, and DST. The platform handles a diverse range of data feeds and aggregates them into its proprietary data structure. This data structure is designed to keep track of the information that is important to a broker-dealer, information such as: capped and uncapped commissions, source of funds, referral information, and branch credit. In addition, trail and fee revenue is stored at the customer account level and can be reallocated as territories are reassigned.
The aggregation of all sources of revenue into one central database via electronic sources increases the accuracy of the data and reduces the amount of back office labor required to process the revenue.
Trade and Customer Maintenance
One benefit to having all revenue aggregated into one database is that it gives management the ability to set uniform data update rules. Defining the rules for how branch and financial advisors receive credit for trades is decided, along with customer data update rules, and goes a long way in reducing data quality problems. In addition to these automated tools, the platform has the ability for staff to edit customer and trade information to correct mistakes that might have occurred at the carrier or clearing firm.
All changes to customer and transaction data are audited in the system. Any changes are stored in the database along with who (or what automated process) made the change, when, and what the original value was.
Having a consistent set of rules and a robust audit engine gives users accurate and consistent data. Data anomalies are easily identified and corrected, so future manual intervention is reduced. Fewer mistakes and less manual intervention provide increased back office efficiency and better reporting.
General Ledger Reporting
With all the revenue data flowing into one database, the platform is the logical choice to report that revenue to the firm’s general ledger system. Every trade that is stored in the system is assigned a general ledger line of business. Terrapin’s solution architects work with the firm’s accounting staff to identify these lines of business, so that all revenues are reported to the proper general ledger accounts and cost centers. Integration with the payroll module allows commission expense to be reported accurately to the general ledger as well. Daily files are generated for export to the firm’s general ledger.
Having all revenue reported to the general ledger daily reduces month end pressure and allows users to address revenue reporting issues as they happen, rather than at the end of the month.
Management reports deliver a complete view of revenues and goals. These reports are customized in the initial implementation, giving a top down view of a client’s business. The reports can give management views of revenue by branch, financial advisor, sales region, channel, product line, etc.
Having management reports that reflect a firm’s complete business provides management with the information necessary to make critical decisions. To see the data in a form that represents the firm’s branch and sales management structure allows them to pinpoint trouble areas and highlight success stories. With all the revenue being reported to the firm’s general ledger, management reporting can match the firm’s P&L, making reporting more meaningful.