Corporate issuers rate satisfaction with shareholder location and asset recovery service providers -- Keane and Georgeson receive highest ratings

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Jan 09, 2013, 04:00 ET

PRINCETON, N.J., Jan. 9, 2013 /PRNewswire/ -- Group Five today announced the results of its annual study of corporate opinions of services provided by shareholder location and asset recovery firms. The annual study, which has been measuring issuer satisfaction for over 22 years, is based on the completed surveys from 860 corporations — representing over 30 million registered shareowners. The study provides the only independent forum for corporate clients to make their opinions known to service providers.

For the third year in a row Keane received the highest client satisfaction ratings with a favorable rating of 88%, which is unchanged from 2011. Also for the third year in a row, Georgeson received the second highest rating at 86% favorable, which is a one point increase from 2011. Keane and Georgeson also received the highest issuer loyalty ratings and are the only service providers with client satisfaction ratings above the industry average.

Jack Sunday, CEO, Group Five pointed out, "As states continue their aggressive search for additional sources of revenue, escheatment continues to be a major management issue for equity issuers. Effective shareholder location and asset recovery programs are a critical element in managing escheatment. In fact, an effective shareholder location and asset recovery process can all but eliminate major escheatment issues."

"We are proud of the number one rating and of our company's performance. I can't say enough about the quality of our team," commented Mike O'Donnell, Keane CEO. "We have taken great care to build a team of proven unclaimed property professionals who are passionate about what they do. Our account managers, researchers, and client services team are all experienced specialists who share a singular focus: helping our clients and their shareholders navigate the complexities of unclaimed property. Keane is the country's only comprehensive provider of unclaimed property services and the leading provider for owner location services to U.S. corporations. We are also the leading provider of customized owner location, compliance and consulting services for banks, brokerage firms, mutual funds and the insurance industry."

Despite attaining the industry's highest ratings over the last three years, Sunday cautioned that "Keane will need to keep evolving to maintain its leadership position." O'Donnell agreed explaining that the industry continues to rapidly change. "State audits regarding compliance with state unclaimed property laws continue to expand in scope creating new challenges," he said. "This is particularly true for companies that issue stock. Auditors are looking beyond the general ledger, and are now asking to review shareholder records in search of past-due property. To stay number one, our focus is on constantly learning, adapting, and growing to ensure we're prepared to offer the advice and assistance that clients need."

The 2012 Group Five Shareholder Services study shows that less than 12% of equity issuers conduct proactive shareowner location and risk review programs. Thus, there are many companies who are not assessing the audit risk created by "past-due" property or following best practices to reduce the volume of accounts that escheat each year. Issuer comments indicate that issuers feel like they are doing "something" but they tend to be unsure of a) exactly what they're doing, b) what they should be doing, and c) if they have any audit risk in their account base. Often this is because they have relied on their transfer agent to handle the issue and do not get involved. Jack Sunday commented, "While most transfer agents can handle the escheatment process well, issuers are often not paying attention to the advantages that shareholder location and asset recovery services can have on the escheatment process. Our recommendation is that issuers engage directly with shareholder location and asset recovery service providers to protect issuers' interests and enable issuers to effectively meet fiduciary responsibilities."

Group Five will continue to monitor developments in the lost shareowner and asset recovery space as the demand and need for these services continues to grow. The December 2012 expansion of SEC Rule 17Ad-17 (which establishes basic guidelines transfer agents must follow as a first attempt to locate missing security holders) is a very recent regulatory action designed to assist lost shareowners. However, complying with SEC 17Ad-17 does not ensure protection. This is increasingly true given the wide range of concerns that the state audits review — including accounts impacted by mergers or acquisitions, and historical due diligence efforts on domestic and foreign accounts — and the in-depth research and communication work that can be required to revive and protect dormant accounts. An additional, and growing, audit concern for issuers is proper identification and handling of accounts that are at risk of escheating due to "inactivity" — where there has been no demonstrable recent contact with a shareowner. The actual dormancy timeframes and escheatment eligibility rules vary significantly by state, making this a particularly difficult category of risk to manage.

Jack Sunday concluded, "Issuers should strongly consider directly engaging an unclaimed property specialist to independently review all account data, identify any audit red flags, establish programs needed to locate and engage shareholders, and ensure compliance with escheatment requirements."

Group Five is a consulting and market research firm located in Princeton, New Jersey. The firm is best known for its consulting and research expertise in shareholder services and stock plan administration services.

No advertising or other promotional use can be made of the information in this release or Group Five survey results without the express prior written consent of Group Five, Inc.

SOURCE Group Five