BILL TOMKO: BACK-OFFICE FIRM PUSHING FRONT-END PAYOUT

As banks struggle to sell wrap accounts to their customers, Bill Tomko, 41, is here to help.

The 12-year veteran with Bisys Group Inc., the country’s biggest mutual fund administration company, was recently named president of Bisys Fund Services, a Columbus, Ohio, unit that may have figured out a new pricing structure that he says will help banks sell wraps more easily.

Bisys, based in Little Falls, N.J., provides accounting and other services for more than $260 billion in mutual fund assets. Mr. Tomko replaces J. David Huber, 53, who is now focusing solely on some of the company’s client relationships.

Mr. Tomko is rolling out a new financing program, the first of its kind, that enables brokerages and banks to be paid an upfront fee for selling mutual fund wrap accounts.

Bisys has spent several years working on the program, and last month received a letter of no action from the Securities and Exchange Commission, allowing the company to market it.

Mr. Tomko says the new program should help clients that are trying to get their brokers and agents to move from commission-based relationships to a fee-based approach.

“Wraps are a tough sell for many brokers because they earn three to four times more in first-year commissions from selling mutual funds or annuities,” Mr. Tomko says.

It works like this. The company pays the brokerages 3% of assets under management up front in exchange for a portion of the wrap account’s advisory fee over three years, after which the revenues revert to the broker. Customers pay the usual annual fee, but if they close their accounts early they pay a penalty.

“It provides a crutch for reps to make the transition to fees,” says Andrew Guillette, an analyst with research firm Cerulli Associates Inc. in Boston. He says the program is aimed primarily at banks whose reps have yet to embrace fee-based planning.

Mr. Guillette adds that it’s unlikely brokerages, which for the past few years have been shifting their brokers to fee-based pricing anyway, would offer the program.

Bisys is also continuing to shift its focus in the industry. Five years ago the company concentrated on banks, Mr. Tomko says, but has since been moving toward serving brokerages and other money management operations. Only a third of the company’s 65 clients are now banks. “We’re not shifting away from banks – we’re just trying to cover everything.”

That means more expansion in Europe as well. While Mr. Tomko, who’s office is in Columbus, Ohio, would not say where specifically they are planning to open offices, he says they are actively checking out “everywhere” in Europe.

He says fund companies are increasingly looking to outsource their back-office operations due to the high costs of technology. The company currently has offices in Dublin and London.

Mr. Tomko joined Bisys in 1987, and has held a number of positions, including working in the client services group for six years. Most recently he was chief operations officer. Earlier, he was an accountant for seven years at Deloitte & Touche in Wilton, Conn. He received a bachelor’s degree in business from Ohio State University.

Mr. Tomko says he expects Bisys to expand rapidly under his leadership, but declined to detail specific goals. “The mutual fund industry is experiencing double-digit growth, and it’s safe to say we plan to grow as fast or faster than that.”