Those that know me, know my background is in Financial Services. Some of the biggest gains that happened during the Major Mergers and Acquisition during the Financial Crisis, as outlined in "Too Big To Fail" by Andrew Sorkin, (Read The Book or Watch The Movie) were those who orchestrated the deals and got big payments (commissions). Commissions rule across multiple industries and Affiliate Marketing is a key player.
Accounting to an Entrepreneur's article, around two billion in Affiliate Marketing fees were paid in 2008, I have no doubt this amount has drastically increased.
The article deals with having your own (preferably multi-page) site and sending traffic to someone elses earning a percentage of commission.
Using these types of links was the subject of my blog over three years ago dealing iwth "Where I See The Money."
So what forums or communities exist to help you learn???
As noted in our previous
segment, we are continuing our segment, “Wall Street Custody Middle Office –
A Day In the Life of a Custody A/C Officer. In this segment we will cover
Foreign Exchange. As noted in my online resume,
I got my start in Foreign Exchange in the year 1991. For the next five years I
learned a lot about the Foreign Exchange Back Office and interacted with many
colleagues in the Middle Office, I would eventually began to work in in 1996
after transferring from FX Support to Investment Manager Services. As I write
this piece I am literally walking distance from that location where I got my
first glimpse of the FX Support Business at 101 Barclay Street, downtown, Manhattan,
NY.
I started out in the remittance area as an Assistance
Supervisor where a lot of retail FX deals take place. I later moved to
Confirmations area and the Multi-Agreement Processing (MAP) Unit where I was
Supervisor. These groups touched more on the Custody Middle Office Business
where I would later work as an Assistant Treasurer and Custody A/C Officer. In
these groups, as FX Deals (Spots, Forwards, Swaps, etc.) were done between
brokers, confirmations of these deals were also done via phone with the Counter
Parties where the Custodian did the FX and well as Swift Messages (MT300) being
sent. Confirmations were critical because due to an exchange rate discrepancy,
the recorded conversation between the confirming parties was the only real
proof used by the FX Investigations Unit. .
As any given point I could be on the phone with say a Middle Office
Administrator in the say the Mutual Funds Group, confirming an FX Done with the
Middle Office and the FX Trading Front Office for the Mutual fund client. It was often during the Confirmation Process
it was agreed on how the client’s funds would be charged for the US portion of
the FX. We had been inputting a code on the FX Details system page to indicate
we would process manual tickets to charge the client’s account. I realized that
by putting in an alternate code you could charge the client’s account directly
via the same System Detail page. The saved the department at least twenty
thousand dollars monthly in manual processing and also made the Custodian Bank’s
Newsletter as our team earned an award. Process
Improvement is so critical in our business!
The same Custody Clients I would later serve as a “Single
Point Of Contact” were doing massive FX Deals As a Custody client purchased a
security in which they had to pay in Egyptian Pounds (EGP), they needed an
Foreign Exchange deal to cover that trade. Often they would use their custodian
bank to do the Foreign Exchange (Buy EGP and Sell USD) and cover the security
purchase. We are covering the FX part of
the deal here but we did cover some parts of the Security deal and what to
watch for in our very first
segment in this series.
Of interesting note I found later in my Middle Office
activities (back in 2006) is that I found that Egypt had trades that settled
over the weekend. The challenge here was that many Custody systems only
reflected settlement dates on Business Week Days from Monday through Friday. So
while the FX Deal to cover the Egyptian Security Purchase settled on a Monday
(crediting the clients account the EGP), the Security may have settled on
Sunday (debiting the clients account the EGP). The client’s foreign currency statement
which keeps a running daily balance, might reflect an overdraft for Sundays’
Debit, not cleared until Monday. This may result in Debit Interest or Negative
Interest. The Sub Custodian (where the settlement of Securities and Cash
actually occur in the local market) might not reflect this on their books.
Adjustment may just need to be made on your Custodian’s System to correct the
debit interest such as a correcting FX deal (Cancel/Replace) to reflect the FX
settling Friday, instead of Monday.
As moved to the Middle Office, whet I learned in the both
the Securities and FX Back Office was critical. I knew what went into setting
up a Securities Trade as well as an FX Trade because I had done it. When in a
crunch for time, I could go right to the right people in the Back Office or
even the Front Office Traders because I already had established a relationship. Whether Internal or External Clients, it’s
all about The Relationship!
Having worked in the Back Office and then in the Front
Office within the Custodian Space responsible for Domestic and Global Trades,
Cash, Income, Corporate Actions and more, I began to reflect on my experiences
and decided to start something of a “Day In the Life Of…” series surrounding
just “some” of the aspects of the Middle Office.
As you prepare to start your day working for a Custodian
bank, it’s critical that you are mindful of the Financial Markets your clients
(in my case primarily Investment Managers) are dealing in. If your clients only
deal in Domestic Trading and you are in the U.S. then you know that most of
your trades will be settling in the U.S. If your clients do Global Trading your
trades can settle in various markets.
Because of Global Settlement, while you are sleeping say in
the U.S. you may be having a trade issue in Asia. To combat this, remote access
to your email and even possibly your settlement system is critical. Often
trades have an indicator if they have been “PreMarched” based on the system
used by your firm and in some cases if trades are not Pre-Matched, you will be
able to tell exactly why “Pre-Matching” has not occured (i.e. Counterparty
Short, CounterParty know Different Amount, CounterParty has no instructions,
etc.) When you notice these “Pre-Matching” fail indicators early you can
closely monitor those trades. If you have certain Markets that have become
problematic, you can monitor trades in those markets. (Note if certain trades
consistently have issues in certain Markets, you may want to get your Network
Management Team involved or if that is you, you may want to yourself look into
the possibility of changing Sub Custodians. I think it’s very fortunate that
you are not always locked into one Sub Custodian, but may often have a choice.
In dealing with Global Settlements, it’s good to check your
Trades due to settle soon are PreMatched if they should be before you leave for
the day, maybe later that evening and in the AM before you reach work. It may
seem a bit crazy but some markets, the earlier you detect issues the better.
You are the key contact your clients have to finding out what’s going on with
their Global Trades in their local markets (US, Europe, Asia, Latin America,
etc.). At the start of your day, your client’s key questions relate to what can
you tell them about the status of their trades. You need to be able to say if a
trade is failing, why and what is being done about it. You will rely on your
company counterparts in the local markets (settlement teams) for updates and
answers.
During this period it is critical that you have reporting in
place for yourself and your client so you can know that status of your trade
activity, cash activity (will your accounts be long or short at the end of the
settlement day), corporate actions, income, etc. Your reporting will help in
Dashboard building/Deep Dive Analysis to determine a number of things such as
consistency in trades failing done with certain counterparties or done in
certain markets, Cash Projections, Corporate Actions, etc.
It can’t be overstressed that your client knows that they
are your key priority. They need to know
you are going to bat for them to ensure excellence in client service. If you
client is an Investment Manager, when they get new clients and need a
Custodian, guess who can be at the top of the list?
When you’re looking for missing client income payments, the
paying agent insists they paid, but your client’s account never got paid,
Working with The Accountants, Auditors, Compliance and more in the upcoming
segments.
