From Commissions to Software Licensing
Ben Haber, CEO of Monark, on building the DTCC for the private markets
This shifts Monark from being paid as a distributor to being paid as software infrastructure. On a retail brokerage, Monark can take a cut of the upfront sales charge on a private fund or SPV. On a fee only RIA platform, that sales charge is removed, so the only thing left to sell is the API, workflow, and operations layer that handles onboarding, suitability, subscriptions, money movement, and reporting.
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The underlying reason is share class economics. Many alternative funds create advisor or load waived share classes for fee only channels, where investors do not pay the upfront sales load that broker dealers usually keep or split. Without that load, a commission sharing model has no revenue pool to divide.
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This makes the customer relationship different. In commission channels, Monark is tied to transaction volume and product sales. In a licensing channel, it is closer to a SaaS vendor selling private market plumbing to an advisor platform that wants the product set without introducing conflicted distribution fees.
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The broader market is moving this way in parts of wealth management. iCapital has also described fee pressure and rising demand for technology, services, and integration on advisor and wirehouse channels, which suggests infrastructure vendors increasingly need both distribution economics and pure software pricing models.
Over time, more private market access will be sold through a mix of revenue share and software contracts. As alternatives spread from commission based brokerages into fee based advisory accounts, the winning platforms will be the ones that can monetize even when the sales load disappears, because they still control the hard part, which is the operational rail behind the investment.