Scivantage announced today that it is celebrating 10 years as an independent technology firm focused on the retail brokerage and asset management markets.

Founded in 2000, Scivantage has been a pioneer in the development of web-based brokerage and wealth management services that have redefined and streamlined the way financial institutions, financial professionals and their clients transact business. From an integrated financial advisor workstation and the industry’s only fully automated cost basis engine to the leading customer service and advanced trading online brokerage solution, Scivantage offers a broad range of applications that span the workflow of financial professionals and support the complex investment needs of the retail investor.

“Over the last decade, we’ve established ourselves as the leader in online brokerage technology, while remaining a truly independent technology firm,” said Adnane Charchour, President and CEO, Scivantage. “Ultimately, what has made us successful is the continued success of our clients and the close partnerships we have built with them over the years. As we look towards the future, Scivantage will continue to stay true to its objective of providing back office independent, technology solutions that drive innovation across critical areas of the front- and middle-office to help drive sustainable competitive advantages for our clients.”  

To read the complete press announcement, click here.

Scivantage and Celent, a research and consulting firm focused on the application of information technology in the global financial services industry, have released a report on the emerging opportunity within the active investor segment.The active investor, a self-directed investor that trades between 3 to 10 times per month and relies on technology to support their investment experience, represents a significant growth opportunity for online brokerage firms, according to the latest Celent Research Note titled, “The Self-Directed Investment Market: A Focus on Active Investors”. With continued market uncertainty, an increasing number of retail investors are moving away from managed brokerage relationships and opting for the self-directed model in order to take a more hands-on and active role in the management of their investment future. Celent estimates that by 2012, the active investor market will reach 16 million investors, making up 40% of the self-directed market.

Some of other findings in the report include:

- Active investors represent a significant opportunity for firms, with a projected growth rate of 9% by end of 2010.

- Access to sophisticated investment products as well as market volatility will encourage the active investor segment to grow at a faster rate than the traditional investor segment.

- Higher trading volume and use of complex trading strategies make the active investor a very profitable segment for online brokerages.

- Online brokerages will need to enhance their platforms to remain competitive; the most important areas will include more sophisticated trading tools, enhanced educational materials, more social networking features, improved mobile access and improved usability.

- Once a product for the sophisticated trader, options are becoming increasingly popular among all investors.

“For the active investor segment, the investment experience has become less about the speed and cost of the transaction and more about the quality of service, access to robust functionality and the overall convenience to proactively manage their investments, at anytime and from any place,” said Isabella Fonseca, a senior analyst within Celent’s international group and author of the report. “Those firms that are willing to invest and adapt to client demands will be future industry winners.”

To download a copy of the research report, click here.

To view the on-demand, webinar recording, click here.

To read the press announcement, click here. 

Scivantage will be co-sponsoring a Cost Basis Reporting webinar on Wednesday, June 16^th at 1 PM EDT.  PriceWaterhouseCoopers (PWC) will also be co-sponsoring this event, which is being hosted by Financial Technologies Forum (FTF). 

To learn more about the event or to register, click here.

Cost Basis Reporting: Addressing Your ConcernsDate/Time: Wednesday, June 16, 2010 at 1:00 PM EDTWith the deadline for the new Cost Basis Reporting Law only 6 months away, your firm is fully prepared, right? IT updates made, systems integrated, staff trained, customer service reps in place? If only it were that easy. With final provisions yet to be released by the IRS, addressing these issues becomes that much more challenging.Attend our 90-minute Cost Basis Reporting online seminar to ease your concerns and get your questions answered directly by a tax expert, technology expert and industry peer. Get an update on the current requirements and learn best practice approaches to ensure operational efficiency and satisfied customers.

• Overview of Cost Basis Reporting
• Understanding the Challenges
  • Tax lot relief method
  • Covered vs. noncovered securities
  • Basis Adjustments
    • Wash Sales
    • Corporate Actions
    • Foreign Corporate Actions
  • Reporting Requirements
    • Transfer Statements
    • Issuer Reports
• Implementation Considerations
  • Educating your client
  • Training
  • Penalties/liabilities
• Best Practices for Tacking IT Challenges
  • Readiness and costs
    • Timeline
    • Hidden Costs
  • Selection of technology
    • Build vs. Buy
    • Expandability/Ability to innovate
  • Data Management
    • Frequency of transaction processing
    • Frequency of client reports
    • Availability of data for other applications
  • Traps for the Unwary
    • Automation versus manual processing
    • Reconciliation
    • Exception handling
    • Underestimating the challenges
• Case Study: Hear from one of your peers
• Q&A: Your chance to ask the questions you know you have
   

Featured Speakers: (Bios)

• Cameron Routh, Senior Vice President, Strategic Products, Scivantage
• Dominick Dell’Imperio, Partner, PricewaterhouseCoopers LLP
• Marty Rosen, Senior Vice President, New Accounts/Customer Reporting, Jefferies & Company, Inc.

Earlier this morning the IRS issued the proposed regulations for cost basis reporting. There were no major surprises in the regs. Some of the interesting points include, no extensions to effective dates, clarification on the timing of Specific ID elections, requirements for issuers, confirmation that there won’t be exceptions for high volume accounts, and a lot of guidance on transfer reporting issues. In all, the IRS has provided 141 fun-filled pages. Download the entire document, put up your feet in front of the fire and enjoy.

It should be noted that these are not the final regulations. The IRS has asked for public comments, due February 8th. There is also a public hearing scheduled for February 17th. So it’s clear that it will be a few months before we’ll have the final (final) regs.

In the following weeks we’ll post comments on specifics topics addressed in the regs.  Be sure to check back often.

To download a copy of the proposed cost basis reporting regs or see to a draft of the 2011 1099B form, visit our Basis Reporting Knowledge Base at basisreporting.com 

Mandatory reporting guidelines apply to both investment management companies and brokerages. While fund companies are not singled out specifically, security-specific rules and the current state of cost basis offerings create unique, often challenging, problems for mutual fund companies - starting with wash sales and lot relief methods, for instance. Fortunately for investment management firms, legislation doesn’t impact pure mutual fund providers until Jan. 2012 (firms with brokerage arms will be required to cover equities beginning in 2011). 2012 may seem like a long time from now, but considering all the changes basis reporting requires, that effective date is a lot closer than it seems. More over, there are many reasons that investment management firms may not want to wait any longer before implementing a cost basis solution.

Historically, mutual fund providers have used Average Cost as the default lot relief method (LRM). The legislation requires that firms support any lot relief method desired by investors.  This presents two challenges for investment management firms:  the first is the business logic required to support FIFO and Specific ID. Legacy systems that were only designed to support average cost will be very difficult to modify in such a way to efficiently support other LRMs. In most cases, the results will be systems which require substantial manual (e.g. expensive) support. The other issue, which is often over-looked, but can be very difficult to resolve and will actually change the nature of the relationship between firms and shareholders, is addressing the requirement that shareholders be allowed to select the LRM of their choice. Satisfying this requirement means opening a communications channel with the shareholders. If this is executed poorly, the result is a confusing and unsatisfying experience for clients and a costly exercise for firms.

Another consideration for introducing a cost basis solution well before 2012 is that clients will begin receiving adjusted cost basis data from their brokerages in 2011. This means customers will receive tax reporting assistance, in the form of adjusted cost, from their brokerage, but not their fund company. At a minimum, this will lead to client confusion and a spike in help desk traffic; but in some cases, it also could result in dissatisfaction leading to a shift in assets. Those companies that introduce cost basis systems next year will not only  get ahead of the legislation, they will be perceived as innovators within the industry and potentially be rewarded with in-flows from firms that are slow to respond.

The bottom line is that investors have always struggled with tax reporting. Mandatory reporting or not, providing adjusted cost basis to shareholders improves the overall investment experience and increases customer loyalty.

One leading investment management firm that has already moved to tackle the cost basis challenge is Vanguard, which recently selected Scivantage Maxit to track cost basis for its client base.  By addressing the basis reporting challenge now Vanguard once again has distinguished itself as an innovator among peers.

Beyond Basis Reporting: Leveraging Accurate Cost Basis to Create a Competitive Advantage

Tuesday April 28, 2009

10:45 AM - 11:45 AM

Atlantic Ballroom 3 - Westin Diplomat, Hollywood, FL

With mandatory cost basis reporting deadlines on the horizon, operations executives are being challenged to formulate new cost basis strategies to support this new era of reporting. The impact of mandatory reporting will go far beyond reporting itself, changing many ways in which firms interact with clients. From major system upgrades to business process reengineering, learn what leading firms are doing to prepare and gain insight into how they plan to use accurate cost basis information to support the ever-changing demands of the retail investor and networks of financial advisors. Moderated by Scivantage, this interactive panel discussion will explore cost basis best practices and new technology innovations that can help to provide a sustainable competitive advantage for your firm.
Panelists:

Martin Bentsen
Chief Operating Officer
Computer Research Incorporated (CRI)

Brian Godfrey
Vice President Client Reporting Operations
Charles Schwab & Co. Inc.

Cameron Routh
Senior Vice President, Strategic Products
Scivantage

Benjamin C. Van Vort
Manager, Tax Reporting and Information Management
PricewaterhouseCoopers

Moderator:

Joe Stensland
Senior Vice President,
Products & Marketing
Scivantage

Don’t forget to stop by the Scivantage booth #308 at the SIFMA Operations Conference!

Next Monday (March 2) is the deadline for submitting comments to Note 2009-17, which is seeking feedback on some of the lingering issues with mandatory basis reporting. Based on comments received, the Department of the Treasury and Internal Revenue Service will issue guidance on the new basis rules and reporting requirements. The Note invites public comment on 36 issues ranging from specific lot identification to account transfers. The Note in its entirety can be found here.

To help financial institutions stay current on the latest news surrounding the cost basis reporting law, Scivantage has launched an online knowledge base at www.basisreporting.com.  

This interactive community offers insight into our products, services and thoughts on the cost basis issues impacting your business. Here you will find a range of resources including the latest happenings with the mandatory reporting legislation, industry expert blogs, best practices, customer success stories and self-service support tools to help your firm navigate the changing regulatory landscape. 

Be sure to visit the new site for the latest updates and to download a complimentary copy of our cost basis reporting white paper, “Cost Basis Reporting: What financial institutions need to know about the new mandatory reporting rules”.

Changing Regulatory Landscape: Requirements Every Financial Institution Must Address to Comply With Mandatory Reporting Rules

Live Webinar Event: Wednesday, Nov. 19 @ 4:00 PM EST

In just a short time, brokerage firms and mutual fund companies will be required to track and report adjusted cost basis to both their clients and the IRS. Doing so will require major system upgrades to support corporate action adjustments, wash sale treatment, and proper lot relief methodologies. Failure to properly address even a single component of cost basis will result in significant penalties and disgruntled clients. 

Scivantage, a leader in providing automated, adjusted cost basis solutions to the financial services community, will host an in-depth discussion on the new legislation and provide insight into how the latest technology innovations can help ensure your firm is ready to comply.

Register today for this free, live webinar to take a closer look at how Scivantage’s Maxit solution can help reduce operational costs, deliver a substantial competitive advantage and ensure compliance in a rapidly changing regulatory environment.

Key topics covered during this webinar will include:

To pre-register for this event, click here.

On Friday, President Bush signed into law, as part of the Emergency Economic Stabilization Act of 2008 (H.R. 1424), mandatory basis reporting for brokerages and mutual fund companies. Beginning with stocks purchased after January 1, 2011, brokerages and mutual fund companies will be required to provide adjusted cost basis to both investors and the IRS. Mandatory reporting will be extended to shares in mutual funds purchased after January 1, 2012, and for debt instruments, options and other securities purchased after January 1, 2013.

After bouncing from one bill to another over two years, basis reporting was finally enacted when the extenders bill it was tied to was included in H.R. 1424, partially as a political maneuver. However, it happened, brokerages and mutual fund companies now must find serious solutions to the complex issue of maintaining accurate cost basis. Maxit’s clients are leading firms that recognized the need of providing fluid cost basis to clients and advisors. Many other firms, however, fail to recognize the strategic value of providing accurate adjusted cost basis and have settled for the “estimated” version of cost basis offered by back offices and other vendors. These firms will need to revisit their existing strategy as they decide whether to upgrade cost basis services to the bare minimum of the basis reporting requirements, or whether to truly make cost basis and tax management tools a key strategic differentiator for their firms.