Federated Investors made the move to outsource fund transfer agency service on Thursday. The fund firm announced their intention to award the contract to Boston Financial in February; Boston Financial began providing services effective Thursday.

The move, which caps ten years of in-house trade processing, is the result of the firm "redefining our service model," said spokeswoman Meghan McAndrew.

"[T]his arrangement allows Federated to concentrate on our core competencies-providing competitive investment results, powerful product distribution and top-quality customer service," said J. Christopher Donahue, president and chief executive officer of Federated Investors.

As part of the move, 200 Boston-based Federated employees will join Boston Financial, and Federated will establish an internal liason group to communicate with Boston Financial.

Federated anticipates a post-tax income of $0.01 to $0.02 per share for the first half of 2004 as a result of the move. 

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