simpleWRAP today launched a full service administration wrap offering a simple and fully transparent pricing model – a flat fee irrespective of account balances – that it believes is the first in Australia for both superannuation funds and investors.

Long established industry leader Krystyna Weston, Director of simpleWRAP, said “simpleWRAP introduces a revolutionary approach to fees where investors pay one flat administration fee irrespective of the size of their investment, offering the potential for significant savings for those with larger account balances both inside and outside super.

“There will be no percentage or asset based fees for the administration service and investors will pay an agreed and set fee for the services that they use. We believe that this is a more equitable approach and, although it sounds like simple common sense, we are unaware of any full service wraps applying this principle.”
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Ms Weston added that she believes the current model of charging clients for administration based on a funds under advice model is an outdated model and simpleWRAP is the forerunner of a flat fee approach that is necessary in the current investment and regulatory environment.
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“Given the direction of government reforms and the recent announcements from various industry bodies, we believe it’s timely for the industry to rethink fees at every level, including wraps. We expect that simpleWRAP will be an integral component for those planners joining the move to true fee for service.
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“Unlike mainstream wrap providers, simpleWRAP offers greater alignment to the true cost of delivering the admin service leaving their advisers to focus on the part of the value chain that offers the greatest value from their advice!
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“In conjunction with Equity Trustees, which will provide administration support, we are able to deliver a service to clients that is transparent, ethical, free of conflicts as well as being simply and fairly priced.
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“simpleWRAP provides financial planners and their clients with a vehicle to assist in truly meeting the fiduciary responsibilities that are embedded in the planner/client relationship.
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“Adrian Young, head of Equity Trustees superannuation business, said that the service that will be provided to simpleWRAP is an example of Equity Trustees’ ability to provide outsourced services to other financial services organisations in different industry sectors, and to leverage its existing resources and capabilities.
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“As a business we are committed to acting in the best interest of clients and to helping facilitate high-quality solutions. We already provide an outsourced administration-only service in superannuation and this is an important step in the development and further expansion of our superannuation and investment platform business, supporting the sort of changes investors are expecting from the industry,” he said.

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City Super, the superannuation fund for current and former employees of Brisbane City Council, has appointed J.P. Morgan Treasury & Securities Services (TSS) as custodian and administration provider.

Bryan Gray, Head of Treasury & Securities Services Sales and Client Management said the new $1.5 billion mandate further strengthened J.P. Morgan’s position in the investment and administration sector.

“Although custody and administration is increasingly becoming a scale driven business, clients are continually seeking tailored solutions. As a provider, we are constantly looking for ways to meet these needs and believe this was a determining factor in winning the mandate,” he said.

City Super has already announced it will merge with an existing client of J.P. Morgan, Local Government Super (LG Super), on 30 June 2011 and therefore will require an investment administration provider with a strong transition management offering. J.P. Morgan was able to demonstrate its substantial experience in executing large scale transition management projects, including those driven by fund mergers or by major changes to a fund’s asset allocations.

Our previous experience with fund mergers definitely worked in our favour, as we could show real world examples of our discipline in this area. With industry consolidation expected to continue, J.P. Morgan’s fund merger experience will continue to position us as a leading service provider,” Mr Gray said.

Once the two funds are merged, J.P. Morgan will also look at ways of optimising the custody and administration process.

“We are currently in discussions with LG Super and City Super to find ways to optimise the custody and administration offering. We are committed to ensuring our services are the best possible fit for the new fund including providing tax propagation, currency overlay and securities lending services,” he said.

The mandate win reinforces J.P. Morgan Treasury & Security Services’ commitment to the Australian & New Zealand market after hiring more than 100 additional employees during 2010, many in senior positions. The hires were not only in line with increased growth expectations but also to better service existing clients.

“Our prospects in 2011 are strong and we have the right team in place to continue the growth we have seen locally and in Asia Pacific. We will continue to develop strong partnerships, elevate our client service offering and enhance our range of market leading products,” Mr Gray concluded.

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The Australian Custodial Services Association (ACSA) has announced the winners of the 2011 ACSA Awards. Presented at the ACSA/ Conexus Investment Administration Conference dinner in Sydney on Tuesday night, the awards recognise outstanding contributors to the Australian custody and investment administration industry.

Nikki Bennett of HSBC, Dañelle Michael of Computershare Investor Services and Tony Stolarek of Ernst and Young were announced as winners of this important industry award, all demonstrating a high level of professionalism, knowledge and commitment to their respective contributions to ACSA’s working groups and in advancing developments within the custody and investment administration industry.

ACSA Chair Paul Cutts said that much of the hard work of our organisation is done within the working groups and the executive is greatly appreciative for the hard work and dedication of all participants. The ACSA Board was pleased with the peer recognition within the industry receiving a number of strong nominations. 

The ACSA awards recognise individuals who have made an outstanding contribution to the industry, members, clients and ACSA itself.

Nikki Bennett, Tax Manager with HSBC and a member of ACSA’s tax working group since the group formed in 2009 has exhibited the persistence, tenacity and technical understanding to achieve positive outcomes. Ms Bennett has provided input on submissions ranging from streamlined implementations for custodians to withholding tax issues with the ATO. Within the tax working group, she proactively takes responsibility for projects and communicates legislative changes to her peers.

Dañelle Michael, Senior Product Manager, Computershare, has been involved with the ACSA corporate actions working group for over two years. Initially, she was invited for her registry expertise when the ACSA meetings were predominantly custodians. Ms Michael saw the benefits of a forum between custodians and share registries and has actively broken down barriers between industry segments.

Tony Stolarek, Partner with Ernst & Young, provided key strategic inputs into submissions made by ACSA to the Assistant Treasurer and Treasury on the application of the Tax Agent Services Act. His ability to provide broader industry insights and reactions to tax reforms provided the knowledge base to build compelling cases in ACSA submissions.

In presenting the awards, Mr Cutts thanked the three winners on behalf of ACSA for their enormous contributions to the custody industry.

“Nikki, Dañelle and Tony have gone above and beyond what was required. They have committed their time and expertise as well as demonstrating great dedication to achieving positive change for their respective industry initiatives. The custody and fund administration sector is a backbone of the financial services industry and such outcomes are to the benefit of the whole industry and importantly end investors. Mr Cutts said.

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Opening the annual ACSA conference in Sydney today, themed Investment Opportunities in a Rebalancing World, ACSA Chair Paul Cutts said Australian institutions while enjoying improved investment conditions continued to face a significant change agenda.

“Institutions and indeed economies around the world are rebalancing as markets seek new equilibrium. Regulatory change, especially in Australia’s superannuation and tax policies, is an additional source of challenge, as will be the likely entry this year of at least one new securities exchange to the local market. ACSA expects that the custody community will be working closely with institutional clients to reshape business models and increase efficiencies in response to these shifting priorities,” he said.

At the same time, institutions are facing other, sometimes competing factors, including growing attention to after tax returns, monitoring and management of risk and improved transparency.

“All these factors are testing the suitability of existing operating models and sometimes the boundaries between internally managed and outsourced services. While we expect to see improved efficiency through the industry’s ongoing commitment to standards and automation in key areas of investment infrastructure, at the same time the needs of our clients to differentiate and to adapt to external change imply demands for new and extended services,” said Mr Cutts.

“The constantly changing information requirements of clients are an area where custodians can add value. For instance, environmental and social governance information is becoming a more prevalent theme. Clients are constantly looking for more detailed, accurate and timely information to aid their decision making process,” he said.

ACSA also released today an update on key industry statistics. The past year witnessed further growth in the industry with total assets in custody now $1.85 trillion as at December 2010, up nearly 8.5 percent from the end of 2009.

In highlighting achievements of the Association in the last year, Mr Cutts referred to the proactive work undertaken by ACSA in 2010 to consult with the Board of Taxation on the implementation of a new tax system for managed investment trusts. He also mentioned the significant level of engagement expected within the custody industry arising from the entry of an additional securities exchange later this year.

In explaining ACSA’s approach as an industry body, Mr Cutts observed “ACSA will maintain a firm core philosophy of, on one hand, working enthusiastically with policy makers to share opinion, experience and ideas; and on the other, to pragmatically embrace change with a clear line of sight to the needs of end investors.”

“Although the Australian custody industry is highly competitive, it is a testament to the professionalism of ACSA members that we can work together as an Association on the raft of common issues that matter to members and benefit our clients,” Mr Cutts concluded.

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Mr Paul Cutts, the newly elected Chair of ACSA, said the awards pay tribute to key individuals who have been instrumental in driving industry reform and efficiency

“The custody industry continues to play an important role in supporting Australia’s investment infrastructure. While much of this contribution is behind the scenes, it is fundamental to the financial services industry with positive effects for all Australian investors – both institutional and ultimately individuals. The Awards recognise individuals in ACSA member firms who have stepped beyond their normal business role to make a contribution to our industry,” Mr Cutts said.

ACSA members provide services to institutional investors like investment managers, governments and major superannuation funds including safekeeping of assets, clearing and settlement of cash and securities, along with a range of portfolio administration services such as valuation, unit pricing, tax reporting and performance analytics

Some of the major items on ACSA’s agenda over the past year have included a review and practical implementation of taxation reforms including managed investment trust and taxation of financial arrangements legislation. The consequences of new tax agents legislation was also the subject of major ACSA working group involvement during the past year

“The Association is pleased that our Taxation Working Group, who come together on a voluntary basis, were able to work constructively with Government and regulators to ensure the implementation of this important legislation did not add unnecessary cost and complexity,” he said

The ACSA Awards are intended to:

• recognise individuals who have made an outstanding contribution to the industry, ACSA clients and the Association itself;
• encourage greater participation from individuals and firms in industry-based initiatives;
• better promote the role of the industry; and
• highlight the level of professionalism within the ACSA community.

Winners of the Award will be announced at the 14th annual Investment Administration Conference to be held in Sydney on 15 February, 2011

Last year’s winners were Denise Hartman, Learning and Development Manager, BNP Paribas, Andrew Gibson, Product Manager, Citi Global Transaction Services and Lisa Simmons, Partner, Blake Dawson – each of whom made important contributions in their fields of expertise to the custodial industry.

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“It is an honour to be elected as Chair of ACSA, especially at a time when members of the Association are being called on to support significant innovation across both local and international markets” Mr Cutts said.

Australia is a large, sophisticated and growing market for both managed and superannuation funds with increasingly complex investment programs. Changes in regulation and market practice continue to place demands on custodians to ensure they provide effective solutions for clients – typically large superannuation funds, investment managers and other institutional investors.

Mr Cutts will be joined by Pierre Jond, Managing Director of BNP Paribas Securities Services Australia & New Zealand as Deputy Chair and John Butler, Head of Client Management at HSBC Bank Australia as Treasurer.

Mr Cutts said: “Pierre, John and I are established members of the ACSA executive team, and are also supported by a board composed of experienced industry professionals.”

ACSA seeks to work closely with government, regulators and other industry participants on issues related to custody and outsourcing.  Recent engagement has included submissions and discussion on the licensing of financial services providers, taxation legislation and regulatory changes affecting short selling and securities lending.

“ACSA has a total of seven industry working groups who meet regularly to discuss changes in the custody and administration industry. ACSA believes the Government will accelerate the pace of reform and we hope to be able to contribute to this process, especially in areas of investment infrastructure,” said Mr Cutts.

ACSA believes that support to implement some significant aspects of the current reform agenda will be provided by its members in areas such as global custody, fund administration and related service dimensions.  Change will also need to be coordinated across market practice, and with other critical players, such as the ASX.

Mr Cutts acknowledged the contribution of the outgoing chairman, Bryan Gray of JP Morgan.  “ACSA has a track record of being responsive to its stakeholders and attuned to the needs of a competitive and adaptive Australian custody and administration landscape. Bryan was instrumental in ensuring the Association moved forward with the times.  His leadership, energy and experience will be missed,” he said.

“As we enter into a new phase for ACSA, I am looking forward to maintaining momentum and addressing the challenges of our ever-changing environment” Mr Cutts concluded.

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