May 9, 2024
Three Reasons License-Based Pricing Makes Sense for Alts Technology
As you determine how to invest in technology to better offer, manage and process alternative investments, think about which pricing structure will help move your business forward...

Characteristic of the alternative investments space, solutions evolve, and the industry continually innovates to become more efficient and cost effective. Second generation straight-through processing solutions available now offer a better pricing model: license-based pricing. Here are three reasons to consider it for your straight-through processing solution.

  1. Lower and predictable cost – In a license-based pricing model, clients pay an implementation fee and then a predictable monthly fee. As a streamlined offering process becomes the norm, it will be key for business growth to invest in technology on a predicable cost basis. This includes investing in technology with client-friendly contract terms. 
  2. Increased adoption – Commission and transaction-based pricing can discourage the use of technology to keep costs down, encouraging use of old paper-based ways to process business and steering advisors away from technology solutions. With a known monthly cost, technology solutions with a license-based pricing structure help increase use and adoption. 
  3. Not tied to commissions – Most business software pricing is based on a licensing fee, not the dollar amount of sales you process through it. Tying pricing to commissions can eat into already narrow margins on alternative investments, create sales channel conflicts, and invite scrutiny around investment fee structures. 
 

License-Based Pricing Moves Your Business Forward 

As you determine how to invest in technology to better offer, manage and process alternative investments, think about which pricing structure will help move your business forward in the most cost-efficient way possible, position your firm to increase adoption of processing technology and keep costs separate from your commission flows. 

 

Learn More 

VENTURE.co offers managing broker-dealers and sponsors the opportunity to expand alternative investment offering capabilities – beyond a technology platform. Our solutions are built to integrate data and meet your firm’s configuration needs – from straight-through processing to risk mitigation to sales management. Our license-based fee structure remains constant as transactions – and adoption – increases.

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