Thats why they try to convince those that have access

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Unformatted text preview: ): “But then we have selected events for the A clients... Every half year we hire a private room in a res‐ taurant and there’ll be probably 15, 20 of us and we’ll get someone – one of the fund managers – to come along. So we have a couple of functions that the clients know they’re being singled out and explain this is very special, not everyone gets invited to these things and they’re sort of branded as being special and then you’ve got the ones, functions, that everyone gets invited to.“ Faculty of Economics & Business Discipline of Business Information Systems Page 3 $RU Teaching Case (INFS1000) by Dr. Kai Riemer Business partners $RU is part of a financial supply chain. While $RU acts as the gateway to the customer, pro‐ viding advice and making decisions as to what financial products to buy for the customer, it does not provide any of these investment products itself. Rather, it relies on various suppli‐ ers for providing investment products (e.g. managed funds), for access to these products, as well as for research information about these products. Where do the products come from? The clients’ money is invested in products such as different types of managed funds (e.g. funds that invest in the share market, real estate, government bonds etc.). Obviously, the funds managers have a vital interest in as much money flowing in their direction as possible, as they make money from management fees, which depend on the volume of money in‐ vested in a fund. That’s why they try to convince those that have access to the customer money (like $RU) to invest in their products. As Murray states: “Fund managers come knocking on our door and say, well: ‘we want you to buy our products.” However, while Murray might decide to invest in a certain fund, $RU does not invest the money directly with the funds company. The reason is that it would simply be too cumber‐ some to deal with a multitude of funds management companies directly. That’s why all transactions are made through an intermediary, a so‐called aggregator. The use of an aggre‐ gator is beneficial to the funds managers as well, as they don’t have to deal with individual orders that come in. Essentially, they want bulk business in order to keep t...
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This note was uploaded on 08/18/2011 for the course INFS 1000 taught by Professor Dr.kairiemer during the Three '10 term at University of Sydney.

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