BNY Mellon Asset Servicing has expanded its subaccounting services beyond mutual funds to include 529 plans, a type of tax-advantaged college savings plan.
This service is expected to help fund sponsors increase the distribution of 529 plans because it automates much of the processing that formerly was a paper-intensive procedure, which made it cumbersome for broker dealers and advisers to track client information.
"This is now a much easier product for broker dealers and advisers to sell," said Michael DeNofrio, head of US investor services within BNY Mellon Asset Servicing's Global Financial Institutions business. "This first step in expanding subaccounting services beyond traditional mutual funds will open the door to a growing number of investment products, including fund-sponsored individual retirement accounts."
BNY Mellon's first 529 client is a broker dealer, which can now benefit from rolling up the trades of its 529 plan clients into a single omnibus account for each 529 plan in which its clients participate. The creation of the omnibus accounts is expected to benefit the broker dealer with more efficient transaction processing and other cost savings.
Broker dealers utilising this service will be able to self-clear trades, including trade placement, trade aggregation, trade settlement and reconciliation.
