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In a move that’s expected to bring lower-cost funds to mutual-fund advisers, fund distribution platform NEO Connect and software maker Univeris Corp. announced a partnership that will provide advisers direct access to NEO-listed investment funds.

Univeris, a wealth-management software used by more than 15,800 licensed mutual-fund advisers, will now be able to provide them access to a list of mutual products distributed through the NEO Connect platform, a sister company to the trading platform NEO Exchange. The funds are known as platform-traded funds (PTFs), which include both traditional prospectus mutual funds and offering memorandum funds.

Prior to the partnership, these mutual-fund advisers were not able to access PTFs on the NEO Connect platform because they were only made available to securities-licensed advisers. (The latter are licensed by the Investment Industry Regulatory Organization of Canada to trade a broader variety of securities than fund advisers, including exchange-traded funds or stocks.)

Now, approximately 50 PTFs will be made available to mutual-fund advisers. The funds, which are designed for fee-based investors, transact and settle similarly to ETFs. Advisers can place a PTF order through an equity trading platform as they would an ETF or a stock, using a PTF ticker symbol.

But unlike an ETF, there are no minimum-investment requirements with PTFs, and orders are filled at end-of-day net asset value, therefore giving investors better pricing by avoiding bid-ask spreads.

The biggest draw for investors lies in the platform-traded fund’s management fees, which range from 0.4 per cent to 0.8 per cent – approximately 28 per cent lower than typical F-class, or fee-based, mutual funds. Invesco Canada was the first Canadian firm to launch PTFs in 2015.

That list of about 50 products is expected to grow as more fund managers join the platform, says Jos Schmitt, NEO Connect president and CEO.

“The partnership between NEO Connect and Univeris is a real game-changer for the asset-management industry in Canada,” said Mr. Schmitt. “The most efficient way to transact mutual funds at the lowest cost has been inaccessible to a large segment of the mutual-fund industry. Until now. By integrating NEO Connect with the Univeris wealth management software, [Mutual Fund Dealers Association] advisers will now also be able to benefit from all the advantages that come with prospectus mutual funds and private funds distributed on NEO Connect. This a win for the advisers, a win for their dealers and, ultimately, a win for their investing clients.”

Since launching in 2016, NEO Connect has grown to service more than $500-million in assets in the fee-based adviser community.

The integration between the two platforms is currently under way, with a production roll-out to all Univeris clients during the fourth quarter of 2018.

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