Thank you for coming. Comments on accommodations, participants, NTLA. Banker and the Frog joke as participants enter Lab 2. VADAR background: 20 years, $2b A.U.M., Private AND Public solutions. Agenda: (1) Servicing vs. Portfolio Mgmt (2) The Cost of Servicing (3) Servicing Choices (4) Servicing Solutions
Misnomers and terms carried over from investment finance. Alpha and Beta risk management focuses on research, selection, strategy. Fewer statute variances, mature and standardized regulations, mature markets. Online mechanisms of research, distribution, researching, communications, allocations, etc.
Less mature marketplace with thousands of statutes varying county by county. Exponentially greater friction, inefficiencies and cost of management, servicing a portfolio. [Survey audience – how many outside AZ/FL and appreciate these activities] What is your bottom-line impact of servicing? Do you measure your OpEx and impact on revenue? EBIDTA vs Operating Income (EBIT) drastic. What is your risk of error? What is your audit cost and risk of fraud? How does turnover impact operations? What is your OpEx trend as investments grow?
30,000 foot view of Tax Lien Servicing process. Over simplified. Inefficiencies, redundancies, retraining, legal compliance, paperwork. Deming Plan/Check/Act. Feedback loop and improvements.
Spreadsheets are “Free” up to a point… Good for up to 100 liens and subsequents, state depending Human error, unreliable data back up and recovery Non-compliant, non-collaborative, non-consolidated
Encourage audience to see Oct15 Forbes Insights survey of hundreds of Wealth Managers Review competitive market pressures: rush to Alternatives, more Bidders, giants with 0 cost of capital Forces executives to look both outward (improved returns) and inward (productivity, profitability)
Technology for Profit / Risk / Scale Efficiency drives profits (2) Reduce risks of error, fraud (3) Facilitate growth at lower cost
When Free isn’t Free 1. Human Error 2. Non-Compliant 3. Non-Collaborative 4. No Data Recovery 5. Not Scalable 6. Cannot Test 7. Inflexible 8. Not Consolidated 9. Slow Decisions 10. Fraud
Share in Real Time, Increase Security, Reduce Errors, Save Time and Money
Does your back office look something like this? Compartmentalized or matrixed? Series or parallel? How often do you reconcile discrepancies? How often do high-cost errors occur in records, notices, filings?
What is your office’s readiness? Time efficiency? Profitability?
29 States – each with different calculations Sampling –6 states to represent and encompass all variables and rules in the industry CO –Lost premiums need time for interest to accrue FL – 0.25% interest is very common … NJ –Majority with 0% interest … 1-time flat rate penalties change the game
What are your annual Operating Expenses? What are your business Liabilities beyond your financial Liabilities?
[Ask Questions and Make it Personal] How close are you to breach, fraud or loss? How many errors could cost 5 or 6 figures?
3 Servicing Choices Serviders – beholden to their investment philosophy, with classic fee structure punitive to growth Build - $250,000 and 3 years earlier… Buy – Take advantage of 20 years experience in 5 years of development. Scalable from institutions to individuals
Their fee structure, their investment philosophy, their servicing systems
Dire decision to do it all. Maybe lucky on scope and on budget. But then: IT costs, obsolescence, lose compatibilty with other systems
All in One SYstem Let visuals speak for themselves – represent wishes.
Home screen with powerful dashboard Instant overview of portfolio return, value, and status by fund
Thank you for your time, and we look forward to answering any questions you may have.