Administration services: A booming business
Good Returns' latest survey of retail portfolio administration systems shows more than $1 billion has been placed under administration in the past six mont.
Wednesday, January 26th 2000, 12:00AM
Good Returns'
latest survey of retail portfolio administration systems shows more than $1 billion has been placed under administration in the past six months.As at December 31 there was more than $4.7 billion under administration compared to $3.5 billion at the end of June. During the same period the amount of net funds under management for the total retail industry, as measured by the IPAC Securities market share report has risen from $15.9 billion to $17.2 billion.
That means the percentage of the retail market that is under administration systems has risen from 22 per cent to 26 per cent.
The latest survey results also quantify the growth of funds within the systems over the past year. While not all services provided the information it is clear that there has been significant growth.
Sovereign's Aegis service has grown 312 per cent and most of the other services have more than doubled their amount of funds under administration in the past 12 months.
One of the key drivers for Aegis has been the ballooning number of firms using the service. Until March 31 last year the foundation members, Reeves Moses InvestorCare, Northplan and Broadbase had exclusive rights to Aegis. There are now more than a dozen firms using the service now it is being promoted more widely.
|
Administrator |
Service |
$ Mill |
Growth over 12m (%) |
No of advisers |
|
Armstrong Jones |
Private Portfolio Service |
341 |
116 |
50 |
|
Ausmaq |
BNZ AMS |
289 |
185 |
30 |
|
Ausmaq |
Others (5) |
239 |
na |
ns |
|
Jacques Martin |
Spicers |
926(1) |
ns |
ns |
|
Jacques Martin |
New Zealand Financial Planning |
380 |
25 |
17 |
|
Jacques Martin |
Navigator (2) |
90 |
265 |
265 |
|
New Zealand Funds Management |
Total (3) |
1004 |
na |
na |
|
New Zealand Funds Management |
First Master Fund |
523 |
na |
68 |
|
New Zealand Funds Management |
Others, incl Strategic Investment Service, Medical Assurance and Liberty Group |
481 |
na |
na |
|
Sovereign |
Aegis(6) |
581 |
312 |
15* |
|
Tower Trust |
Boxer |
38 |
na |
25 |
|
Tower Trust |
Private Portfolios (4) |
675 |
51 |
12* |
|
Watson Wyatt |
Planit |
14 |
28 |
none |
|
TOTAL |
|
$4.7 bill |
|
|
(1)
Estimated(2) This is the combined Navigator Service and Pathfinder
(3) NZ Funds run Money Managers First Master Fund, as well as the Strategic Investment Service
(4) Major users includes: NZ Assets Management, JB Were, PriceWaterhouse Coopers, Resource Financial Planning and Tower groups
(5) This includes Grosvenor, which supplies services to Rutherford Rede and Quantum
* Denotes firms rather than advisers
The new entrant to the survey this quarter is Planit Plans which has $14.4 million under management. Planit was originally developed for the employees of Fletcher Challenge and is now owned by Planit Plans (which is jointly owned by Michael Littlewood's firm Planit Services and MCA NZ Ltd).
Planit is different to the other administration services in the survey as it is not promoted by intermediaries, such as financial planners. Rather Planit promotes its service to groups or company's which then offer it to their staff. Although intermediaries are not used for distribution the service has a number of facilitators throughout the country which help users implement their plans.The two biggest financial planning firms are Money Manager's, which uses the First Master Fund ($523 million) and Spicers ($926 million). While Spicers appears bigger the comparison is not like for like as First Master Fund does not include the $510 million Money Managers has in property syndicates ($400 million) and contributory mortgages and property bonds ($110 million).
The Spicers number includes the $43 million it has in New Zealand property.
Since the last survey was published Colonial has amalgamated its Navigator Select Investor Service with the Pathfinder master trust run by Prudential.
While they are merged under the Navigator brand that is about to change to the Select Investor Service. Norwich Australia sought the change as it also runs a master fund called Navigator.
Also, Armstrong Jones has recently acquired total ownership of the Private Portfolio Service which was established for, and partially owned by, AdvisorGroup.
PPS national manager Wayne Becker says AJ is looking to move PPS to the next stage which involves providing advisers with a complete back office solution.
"If that means we have to provide a wrap account then that is something we will look at."
Currently AJ is surveying advisers to find out their understanding of technology and their needs.
PPS is currently rewriting its investment statement and it has changed a couple of managers. Fiduciary is taking over the property management from NZ Guardian Trust and Perpetual Investments is now managing the Australian equities fund which was formerly run my AJ parent Mercantile Mutual.
Another key development in the sector has been a deal between Boxer and the Life Brokers Association. Boxer founder and LBA member Kevin Seque says the association is looking to forge relationships with suppliers.
Under this arrangement LBA will be the preferred administration system of the LBA. Seque says the agreement means that there are potentially another 128 Boxer uses.
The one system not captured in the survey is InvestmentLink which provides planners with a consolidated source of information on managed funds.
InvestmentLink in Australia has launched its e-Portfolio service which allows clients of a financial planner to access their portfolios online.
It is expected that e-Portfolio will soon be rolled out in New Zealand.
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