David Travers

Data released yesterday by the Australian Custodial Services Association (ACSA), the peak industry body for custodians and asset service providers in Australia, revealed a 1.9% rise in assets under custody to $4.5 trillion in the six months to 31 December 2023.

Source: Australian Custodial Services Association, full breakdown available at https://acsa.com.au/page/IndustryStatistics

Markets demonstrated increased stability in the second half of 2023, with assets under custody in December 2023 maintaining a gradual increase from the June reporting period. Individual custodians experienced different performance outcomes throughout the year due to increased custody asset movements within the industry (for more details visit ACSA’s website).

According to the latest ACSA data, Australian investors increased their allocation to overseas assets during the period by 5.1% to $1.6 trillion, with Australian-domiciled investments remaining stable at $2.9 trillion. Assets held in Australia on behalf of offshore investors (sub-custody assets) increased by 5.6% to exceed $2 trillion.

Asset servicing providers in Australia had $5.4 trillion in assets under administration as at 31 December 2023, up 3.0%, and settled 11.6 million trades in the six-month period, an increase of 1% over the previous six months. ACSA members, on average, settled approximately 89,250 trades per day on behalf of clients.

ACSA Chief Executive Officer David Travers said that the past six months ACSA has maintained its momentum, driven by significant market and regulatory change.

“Investors have continued to take advantage of offshore investment opportunities even though global economic factors have remained subdued, albeit green shoots of economic improvement are appearing. Locally, there has been surprising stability in the asset levels reported by ACSA, with relatively small changes in assets under custody and assets under administration on stable transaction volumes,” Mr Travers said.

“ACSA and its members remain focused on their response to regulatory change, the evolving changes to market framework, such as global market moves to T+1, and continued support for the ASX on CHESS and its replacement program.

“Innovation, digital asset evolution and standards remain a critical focus for achieving efficiency in custody and investment administration. ACSA remains well placed to address the opportunities and challenges in the coming year through our working groups and dedicated industry volunteers,” Mr Travers said.

Read the full datat report.  https://acsa.com.au/page/IndustryStatistics

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David Travers

Data released yesterday by the Australian Custodial Services Association (ACSA), the peak industry body for custodians and asset service providers in Australia, revealed a 1.9% rise in assets under custody to $4.5 trillion in the six months to 31 December 2023.

Source: Australian Custodial Services Association, full breakdown available at https://acsa.com.au/page/IndustryStatistics

Markets demonstrated increased stability in the second half of 2023, with assets under custody in December 2023 maintaining a gradual increase from the June reporting period. Individual custodians experienced different performance outcomes throughout the year due to increased custody asset movements within the industry (for more details visit ACSA’s website).

According to the latest ACSA data, Australian investors increased their allocation to overseas assets during the period by 5.1% to $1.6 trillion, with Australian-domiciled investments remaining stable at $2.9 trillion. Assets held in Australia on behalf of offshore investors (sub-custody assets) increased by 5.6% to exceed $2 trillion.

Asset servicing providers in Australia had $5.4 trillion in assets under administration as at 31 December 2023, up 3.0%, and settled 11.6 million trades in the six-month period, an increase of 1% over the previous six months. ACSA members, on average, settled approximately 89,250 trades per day on behalf of clients.

ACSA Chief Executive Officer David Travers said that the past six months ACSA has maintained its momentum, driven by significant market and regulatory change.

“Investors have continued to take advantage of offshore investment opportunities even though global economic factors have remained subdued, albeit green shoots of economic improvement are appearing. Locally, there has been surprising stability in the asset levels reported by ACSA, with relatively small changes in assets under custody and assets under administration on stable transaction volumes,” Mr Travers said.

“ACSA and its members remain focused on their response to regulatory change, the evolving changes to market framework, such as global market moves to T+1, and continued support for the ASX on CHESS and its replacement program.

“Innovation, digital asset evolution and standards remain a critical focus for achieving efficiency in custody and investment administration. ACSA remains well placed to address the opportunities and challenges in the coming year through our working groups and dedicated industry volunteers,” Mr Travers said.

Read the full datat report.  https://acsa.com.au/page/IndustryStatistics

The post Assets under custody in Australia rise by 2% in Dec half appeared first on AdviserVoice.

David Travers

Data released by the Australian Custodial Services Association (ACSA), the peak industry body for custodians and asset service providers in Australia, revealed a 2.1% rise in assets under custody to $4.4 trillion in the six months to 30 June 2023.

Source: Australian Custodial Services Association, full breakdown available at https://acsa.com.au/page/IndustryStatistics

During a period of volatility in local and global markets, assets under custody in June 2023 have rebounded to levels consistent with the prior quarter. Individual custodians experienced different performance outcomes throughout the year due to increased custody asset movements within the industry (Full details can be found in the statistics on ACSA’s website).

According to the latest ACSA data, Australian investors increased their allocation to overseas assets during the period by 9.7% to $1.5 trillion, and Australian-domiciled investments decreased by 1.5% to $2.9 trillion. Assets held in Australia on behalf of offshore investors (sub-custody assets) increased by 6.1% to $1.9 trillion.

Asset servicing providers in Australia had $5.2 trillion in assets under administration as at June 2023, up by 0.9% from $5.1 trillion, and settled 12 million trades in the six months to 30 June 2023, three per cent fewer than the previous six months. ACSA members on average settled approximately 91,600 trades per day on behalf of clients.

ACSA Chief Executive Officer David Travers said that the past six months had been fast-paced, driven by a significant amount of market and regulatory change.

“Macro local and global economic factors have led to surprising stability in the asset levels reported by ACSA, with relatively small changes in assets under custody and assets under administration on lower transaction volumes. The increase in assets allocated to non-Australian assets indicates that investors are clearly seeking to take advantage of offshore conditions,” Mr Travers said.

“Looking ahead, ACSA members will continue to focus on their response to regulatory change, their evolving role in supporting institutional involvement in digital assets, including cryptocurrencies, and ongoing support for the ASX on CHESS and its replacement program,” he added.

“Innovation, digital asset evolution, and standards remain a critical focus for achieving efficiency in custody and investment administration. ACSA remains well placed to address the opportunities and challenges in the coming year through a combination of our working groups and task forces.”

ACSA has changed its reporting from a breakdown of ACSA members’ static asset under custody data to industry-level trends on Australian assets under custody, sub-custody assets for foreign investors and assets under administration.

Read the report.

Creation of Executive Chairman role

Founding Chief Executive Officer, David Travers, will move to the newly created position of Executive Chairman, with specific responsibility to deliver a leading-edge technology roadmap that promises to automate advice assurance to a level previously thought impossible.

Appointment of new CEO

Meanwhile, current Chief Operating Officer, Joel Ronchi, has been promoted to CEO, and will continue his focus on new client acquisition and service delivery. Travers said: “Joel is the natural choice to lead the company through this next growth phase. He is passionate about the importance of high-quality, independent financial advice and has dedicated his career to making it more accessible and affordable. Joel has unrivalled subject matter expertise and exceptional industry relationships”.

Appointment of new Director

In addition to the Travers and Ronchi promotions, financial services executive and Fintech founder, Paul Rogan, has joined the Fourth Line Board as both an investor and Director. Paul spent 25 years in senior executive roles in MLC/NAB and Challenger Limited, before founding and exiting two successful start-ups, and leading pioneering robo-adviser, SuperEd. He is currently also a director of Hub24 Limited and EQT Superannuation Ltd (Equity Trustees). 2

Implementation of Advanced Technology Roadmap

As part of the strategic leadership transition, Fourth Line’s Board and Executive Team upgraded the company’s advanced technology roadmap to include the planned acquisition of proprietary software and the integration of large language models like GPT-4.

“Our first-generation robo-assurance software is the core of our peerless ‘bionic’ file review service, which in less than three years has captured a 13% share of the highly fragmented advice-assurance market,” David Travers said.

“Fourth Line 2.0, the next evolution of our ‘outsourced compliance brain’, will incorporate the latest advances in generative AI and machine learning technologies, meaning our system will be able to read, understand and evaluate all forms of unstructured data, from fact-finds to file notes. “It will teach itself to identify, assess and code the subtle variations between and within financial advice files prepared by human advisers. This will not only drastically reduce the workload of compliance officers but will also bulletproof licensees’ advice processes and lift the standard of advice to the benefit of consumers”.

Travers will collaborate closely with Professor Dan Hunter PhD, Fourth Line’s co-CTO and a world-leading, generative AI expert. Professor Hunter is the Executive Dean of the law school at King’s College London, has extensive experience in technology startups, and is a highly published author in the fields of technology and law. He holds a PhD from Cambridge University in Cognitive Science & Legal Reasoning, a Master of Laws in AI & Law from Melbourne University, and degrees in both Computer Science and Law from Monash University.

Executive Chairman David Travers said: “Since inception we’ve focused on business-building basics.

“That is, providing tangible value to clients by delivering our core regulatory IP using existing software technology, with human oversight. “Now, with a talented team, rapidly growing client base and proven market demand, we have the firm footing needed to support a technological step-change that will revolutionise advice assurance”.

2022 award winners are:

• ACSA Award:
  • Nicole Carnovale, Northern Trust
  • Duncan Lyon, J.P. Morgan
• ACSA Service to the Industry Award
  • Marian Azer, Milestone Group

The awards were presented by ACSA Chair, Sally Surgeon, and CEO, David Travers at an industry event last Thursday 17 March.

Ms Surgeon said: “It is always a great pleasure to recognise individuals who go above and beyond in their work on behalf of the asset servicing industry, especially during the recent challenging and volatile period.

“As an industry body with a unique voluntary working group structure ACSA relies on industry professionals who give their time, knowledge and experience to advancing ACSA’s work. We greatly value the contribution of our working groups. Nominated by industry peers, these awards are ACSA’s way of acknowledge the outstanding contribution that a number of individuals have made to promoting positive change in the industry over the past year,” she said.

Nicole Carnovale, APAC Senior Product Manager for Data with Northern Trust

Nicole played a key industry role overseeing the revamp of the ACSA website in late 2020 and worked with great enthusiasm to bring the project to a successful conclusion in November 2021. She applied skills and focus to all dimensions of the website refresh including updated content, navigation, industry personas and a contemporary look and feel.  Nicole’s perseverance in keeping the review process on target and helping frame the right feedback to the website developer was key to achieving the quality revamp.

Duncan Lyon, Tax Product Manager, Securities Services, Australian and New Zealand at J.P. Morgan; Chair of the ACSA Tax Working Group

As Chair of ACSA’s Tax Working Group Duncan has gone over and beyond driving key initiatives, including the navigation of complex tax issues, that have benefited ACSA and the industry. Duncan has worked through technical and policy change in a collaborative style, encouraging input from the broader team. He has provided a key leadership role in drawing together considered industry views from fellow practitioners, driving consensus and formalising quality submissions. He consistently encourages a focus on issues affecting ACSA members and their clients through effective liaison with third-party bodies including ASFA, the FSC, Commonwealth Treasury and the ATO.

Marian Azer, Managing Director APAC & Global Head of Product, Milestone Group

Marian is this years’ Service to Industry Award Winner and is recognised for her significant contribution to the industry. This includes working within the custody and asset servicing industry in Australia across a variety of custodial banking entities, as consultant to the industry and in FinTech. Marian has been an active member of ACSA in various capacities including as Deputy Chair, Working Group participant, Executive sponsor and now, as an Associate member. She acts as a mentor to many young women associated directly and indirectly with ACSA across Superannuation, Asset Management and Wealth as part of recognising the need to attract and develop the next generation of talent.  Marian’s contributions have helped ACSA promote the Custody and Asset Servicing industry in Financial Services to be focused on enabling and powering the future of investment operations.

ACSA CEO, David Travers, said: “As CEO I am engaged actively with the ACSA Board, our working groups and taskforces. There are so many individuals who not only perform demanding day jobs, but who also step up to make a difference for our industry. Not only is this an amazing feature of our industry  it is in fact now part of the industry’s DNA. On behalf of the industry I congratulate Nicole, Duncan and Marian on their well-deserved awards, and extend thanks to all other contributors to the industry.”

David Travers

The Australian Custodial Services Association (ACSA), the peak industry body for custodians and asset service providers in Australia has released industry data showing assets under custody increased by 5.8 per cent to a new record of $4.7 trillion in the six months to 31 December 2021.

ACSA Chief Executive, David Travers, said the record result occurred on the back of strong financial markets in the December half and reflected confidence in the key services provided by the securities services industry.

“Our members reported a consistent increase for Australian and offshore assets for Australian investors of 6.1 per cent and 5.4 per cent respectively, compared to an increase of only 0.4 per cent for assets held onshore for foreign investors,” Mr Travers said.

“While part of this differential is the result of currency valuation changes and buoyancy in traded securities markets, it can also be traced to the long-term trend of institutional investors repositioning portfolios so as to seek balanced returns. There was also onboarding of new custody mandates on the part of some members evident in the relative movements during the half,” he said.

The statistics showed that asset servicing providers settled over 13 million trades during the six months to 31 December 2021. This equates to approximately 101,000 settled trades per day on behalf of clients.

“Innovation, leveraging the right technology partnerships and an ongoing focus on standards has been key to achieving efficiency in custody and investment administration,” Mr Travers said.

“Looking ahead to 2022, we expect our members’ focus will centre on the response to changing regulatory data reporting requirements, the evolving role of custodians in supporting institutional involvement in digital assets including cryptocurrencies, and the implementation of the ASX’s DLT-based replacement for CHESS. ACSA remains well placed to address the opportunities and challenges in the coming year through a combination of our working groups and task forces,” continued Mr Travers.

David Travers

Financial advice disruptor Asendium has announced it has entered a memorandum of understanding with regtech firm Fourth Line to integrate platforms and enable Asendium customers to receive risk and compliance reviews of advice documents as part of their advice delivery.

Asendium is transforming the way financial advisers deliver advice, through a dynamic platform that creates all required advice documents at the same time, through one instance of data entry. It is designed to eliminate the manual part of advice generation, thereby creating more time for advisers to work with clients and build their business.

“Asendium is focused on using technology to transform the advice landscape, and how advice is delivered to clients. Through our platform we remove vast amounts of manual work and ultimately simplify and optimise the advice creation process,” Asendium CEO, Scott Miller, said.

“Through our Fourth Line partnership we are pleased to be able to offer risk and compliance reviews to all our clients’ advice as part of their document preparation, which will be of particular benefit to small or emerging practices and IFAs. This means our clients can create advice documents faster than ever before, but with the robustness expected of leading advice firms, and consumers.”

While auditing of documents is considered a time-intensive process, the nature of Asendium’s structured data environment means an integration with Fourth Line will deliver Asendium clients same-day compliance reviews. The integration will increase efficiencies in both systems and for the overall advice creation and review process.

“Asendium removes all paraplanning costs, which on average cost advisers $500 per client. This means every adviser can have their documents reviewed before going to the client, and it will cost less than their current model,” Miller said.

“Finding ways to be more efficient is clearly a significant objective for advisers in the face or spiralling costs, but ensuring their advice is compliant remains critical. Fourth Line can provide that security for Asendium customers.”

Asendium acts as ‘guard rails’ for developing compliant advice, and advisers can generate in-house, next day comprehensive and personalised advice – for a multitude of advice steps including fact finds, strategy papers, file notes and instant statements of advice – in a matter of hours.

Fourth Line provides risk and compliance reviews of advice documents on behalf of an adviser or licensee, and focuses on reviewing documents both on quality, and content.

“Fourth Line was established in 2019 in conjunction with law firm Mills Oakley, in response to the royal commission and helps financial advisers and licensees ensure that their advice documentation is compliant before they are sent to the customer,” Fourth Line CEO, David Travers, said. “Our experience has identified that the best quality advice occurs when it is reviewed before the advice is issued to the customer, as opposed to through a retrospective review or a regular audit program.”

Fourth Line has facilitated improvements in the standards of advice for individual advisers, teams, and across licensees. Fourth Line currently works with licensees including Interprac, GPS Wealth, and Wealth Today.

“Using Asendium and Fourth Line together will create a compliant statement of advice for less than it costs most licensees today,” Miller said. “Advisers can have faster and more robust advice documents in a matter of days compared to the typical advice generation model.”

Fourth Line CEO David Travers commented, “Joel brings a tremendous amount of ‘real world’ experience to the team. His engagement will help strengthen Fourth Line’s ability to services its clients and to provide practical advice on implementation. Our approach is uniquely bionic in that it combines state of the art Artificial Intelligence (AI) with high-calibre personal oversight from industry professionals, such as Joel.”

Fourth Line recognises that rising regulatory compliance demands pose a significant threat to licensees and advisers. Fourth Line’s bionic compliance approach enables complex, subjective, principle-based advice legislation to be addressed systematically in conjunction with human oversight. Fourth Line’s focus is on helping Licensee and Adviser compliance teams improve the overall quality of advice.

“Our philosophy is that the compliance team becomes a coaching team. The reality is that each piece of advice for each client represents a risk to a Licensee. This is an onerous task for compliance officers to check through manually. It becomes a reactive, almost adversarial approach, to Adviser management. No-one wins.” Travers said.

The Fourth Line delivers insights and analytics that enable compliance officers to become “Advice Coaches” and work with their Advisers to manage risk and identify areas for improvement. This proactive approach allows Licensees and Advisers to demonstrate to the Regulator (ASIC) that the clients’ best interests are being met through the provision of appropriate advice that prioritise the client’s interest.

“Financial advisers and Licensees are getting hit from all sides – regulatory, compliance, the FASEA Standards, Adviser Exam and Higher Education requirements. I speak with Advisers and Licensees every day, with many feeling overwhelmed by the amount of change currently taking place,” Ronchi said.

“My purpose over the last few years has been to help Advisers and Licensees “filter out and distil” the noise and confusion regarding the FASEA Standards and help the industry evolve in to a profession so Advisers can focus on what’s important – providing quality advice to ordinary Australians so they can achieve their dreams and have security in retirement,” Ronchi said.

A key component in this challenge is improving the advice process in the face of increasing regulation and compliance oversight. “Compliance should be an enabler of advice – not a cop on the beat”, explains Ronchi.

Regtech digital and technological solutions have enormous potential to help businesses build a culture of compliance.

2020 has seen individuals, business and government living, managing and surviving crisis after crisis – and it’s only March. Bushfires, floods and now the most significant health crisis in the last 100 years. Whilst not everyone has been directly impacted by the first two, we are all impacted by COVID 19.

Never before have financial advice practices been more in demand and essential for managing the future financial outcomes of so many Australians,^[1]. Quality financial advice will play an important role in helping individuals navigate their immediate and long term personal and financial well-being.

Financial Advice practices have been seeking to take advantage of the digital economy for a number of years, some have achieved this more than others. It has never been more critical than in today’s volatile market, to have strong digital and technological driven partnerships, to assist in managing in crisis conditions with unknown resource availability, to ensure we are always putting the best interests of clients first.

The quality of financial advice remains an important focus for advice practices, advisers and regulators.^[2] It has been made clear by the regulators that Regtech digital and technological solutions have enormous potential to help businesses build a culture of compliance, identify learning opportunities, and save time and money relating to regulatory matters.^[3]

So, is your Regtech partner for advice helping you with crisis management? Managing through a crisis is more than understanding the cause and effect, it is stepping up to assist with innovative and collaborative approaches to ensure your business can continue to have the bandwidth and support to meet all the challenges the crisis throws up.

Your Regtech partner should be:

A Collaborator: take a whole of business approach (not just a tech solution) to helping manage resources, costs and risk, working proactively to find solutions that can help resource pressure points to ensure you stay compliant and continue to put your clients first in achieving successful advice outcomes.

An Innovator: finding ways to help solve business problems in crisis management environments quickly and effectively, offering ways to ensure that you continue to act in your clients’ best interest.

Agile: have the ability and capacity to pivot when you need to pivot around resource availability, process flexibility, technology change and pricing alternatives to find solutions that maximise your ability to maintain your focus on your clients’ needs.

By David Travers

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1. https://www.linkedin.com/posts/angus-woods-a5a7025_in-these-highly-charged-emotional-times-activity-6647455737473826816-nL-1
2. ASIC Report 562, 1 January 2018 stated “In none of the 75% of files judged by ASIC to be “non-compliant” did the adviser demonstrate that following the advice given to the client would leave the client in a better position.”
3. https://asic.gov.au/for-business/innovation-hub/asic-and-regtech/

Fourth Line will provide a range of services including pre and post advice reviews for existing and new advisers, providing a range of analytics and benchmark reporting to assist Wealth Today in continuous improvement of quality and timeliness in its advice processes.

Wealth Today CEO, Keith Cullen commented “Fourth Line is enabling us to innovate and redefine the way we review advice and better coach our advisers in the creation and delivery of that advice. We value the partnership with Fourth Line as it’s facilitating improvements in both the quality of advice and speed of its delivery.”

Fourth Line CEO, David Travers commented “We are very excited to be working with Wealth Today to improve advice through the provision of a robust system that creates deep insights into the provision of financial advice. Our system incorporates world leading technology through our partnership with Swinburne University and our collaboration with Mills Oakley provides the most rigorous and comprehensive financial advice review process available. We provide continuous insights that enable improvements in both the quality, timeliness and the cost of financial advice”.