2005 C.I.P.A. Winners

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ADP Investor Communications

Smart Prospectus: Relevant, Compliant, Timely, Cost-Effective

ADP Investor Communications, founded in 1987, is now part of ADP's Brokerage Services Group, a leading provider of transaction processing systems, desktop productivity applications and investor communication services to the financial services industry worldwide.

Operating from Mississauga, Ontario, ADP Investor Communications (ADP) serves 14,000 North American public corporations on behalf of more than 100 financial institutions and mutual fund companies, providing mailing and voting files containing information on millions of Canadian security owners collected electronically from brokers, banks, trust companies and their service bureaux.

Challenges

When an investment dealer sells a mutual fund to a Canadian investor, securities regulations require that an up-to-date prospectus be sent within 48 hours to ensure that the investor has the information needed to understand the risks of investing in that fund.

The traditional process of printing, stocking, picking and distributing prospectuses has largely been done manually, using inventories of pre-printed, hard-copy documents. This has been inefficient and costly. The logistics can be a nightmare -- with 40,000 independent financial advisers across the country, and a network of advisers and financial planners working for banks, brokerages and securities firms, all able to sell funds and all needing to send prospectuses to investors.

Adding to the challenge of timely prospectus distribution is the need to ensure that only the latest information is sent. Prospectuses change regularly. When they do, inventories of existing materials must be thrown away and replaced by amended or new versions.

"For some time, the industry has been looking a for a new way to streamline this process to make it faster and less expensive to send out up-to-date prospectus information - but not finding a sustainable technology solution to support it," says Sue Britton, senior vice president at ADP Investor Communications.

ADP has come up with a solution. It is called Smart Prospectus, an outsourced service that offers investment and mutual fund dealers a more effective way to print and mail mutual fund trade confirms and prospectuses to Canadian investors.

Objectives

In developing the process and technology behind Smart Prospectus, ADP set out to address the needs of a number of key stakeholders.

Ensuring that investors got timely, accurate and up-to-date information was of paramount importance, while dealers would benefit from an automated solution that reduced their costs and enabled them to focus on their core business of providing financial advice, rather than on managing document-distribution logistics. And of interest to regulators, a new approach could minimize investor risk by making it easier for the industry to consistently meet requirements for the timely provision of compliant documents.

Solution

Smart Prospectus is a distributed data-processing and digital-print application that uses on-demand print technology to facilitate the cost-effective fulfilment of mutual fund prospectuses to Canadian investors.

Smart Prospectus obtains prospectuses electronically from the System for Electronic Document Analysis & Retrieval (SEDAR), the standard industry repository to which all public companies and investment funds must send prospectuses and other regulatory documents. The prospectuses, which often contain information on many funds, are electronically disassembled by Smart Prospectus into fund-specific sections, and then re-assembled, digitally printed and bound into a new personalized prospectus document containing only information relevant to the fund(s) the investor has purchased.

"In addition to providing confirmation of the investor's trades, the personalized prospectuses make relevant fund information more accessible, enabling more informed investment decisions," Britton says.

By printing and sending prospectuses only as needed, the service eliminates requirements for a pre-printed document inventory, reducing paper and cost. Further savings in distribution and mailing are gained by consolidating prospectus information for multiple funds into a single document, along with trade confirmations.

Innovative Use of Technology

"ADP's Smart Engine is the core technology underlying Smart Prospectus," Britton explains. "It represents a significant innovation in an industry looking for an efficient and cost-effective way to provide timely, accurate prospectus information."

The Smart Engine is able to determine when a new prospectus document needs to be sent to an investor, for example, based on rules governing the timing of the transaction, the nature and timing of the last document sent to the investor, and the timing of the last SEDAR filing. Another innovation is Smart Engine's ability to access documents in SEDAR, segment them into different sections electronically and pull out only the relevant pages based on a universal fund identifier code, called the FundServ code, which is assigned to any mutual fund bought in Canada.

A 2005 CIPA Winner!

For its exceptional application of information technology to solve real-world business problems and bring greater benefit to all its stakeholders, ADP Investor Communications has been awarded a 2005 Canadian Information Productivity Gold Award of Excellence as the best in category of the Customer Care, For Profit category.

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