NZ fund administrators are humming despite a large spike in transaction volumes, fast-approaching end-of-tax-year duties and a workforce largely confined at home.
MMC and Trustees Executors (TE), which collectively handle a large chunk of third-party fund admin in NZ, both reported systems were coping well in the face of a huge increase in retail registry activity.
Ryan Bessemer, TE chief, said KiwiSaver transfers – mostly as members de-risked from growth to conservative options – had jumped as much as 15-times the typical daily resting rate over the last few weeks.
“We’ve seen massive volumes of KiwiSaver switches,” Bessmer said. “It may have calmed down a little bit but it comes in waves. We’re preparing now for the next rush as the government eases access to lump sums under hardship grants.”
He said TE continued to run registry on the Bravura Sonata system while still developing a blockchain-based alternative for future growth.
TE provides admin services to six or seven KiwiSaver schemes, most notably Fisher Funds, in a market where many of the larger providers such as ANZ, ASB and AMP keep score in-house.
MMC, however, has also carved out a decent share of the third-party admin market in KiwiSaver with clients including four of the fastest-growing schemes – BNZ, Generate, Milford and Simplicity – along with Westpac, Juno and Nikko.
Nicola Tait, MMC chief relationship officer, said the administrator had also noted a significant rise in KiwiSaver fund switches as the COVID-19 crisis deepened.
“All our systems are working well,” Tait said. “The only challenge when transaction volumes are so high is that it can take a little longer to process.”
Aside from the rise in switching volume, she said extreme market volatility added some complications for administrators such as ensuring spreads and underlying security prices remained accurate.
For example, in a portfolio of, say, 200 stocks, administrators might flag two or three daily trades as out of normal range, Tait said.
“But when you get all 200 stocks out of range you have to be more aware of the checking process,” she said. “We’re providing greater oversight at the moment – taking a little longer to check and liaising closely with the fund managers.”
MMC was also gearing up for its leg of the tax-reporting marathon even as regulators granted funds a two-month extension on filing audited financial reports.
Tait said MMC would start preparing data for fund tax reports next week, regardless, in addition to end-of-year member statements (which may not fall under the reporting relief).
Doug Cameron, BNP Paribas NZ country head, said the custodian and fund administrator had adapted well to off-site operations.
“Right now our key focus areas are staff well-being and the continuation of delivery to our clients,” Cameron said. “We are working hard to ensure consistent operations and I’m extremely proud of the team’s efforts in the current context.”
Last week MMC also shifted 100 per cent of staff to work-from-home ahead of the government’s Alert Level 4 announcement.
Tait said the transition – included in the firm’s business continuity plan (BCP) – had gone well with all MMC systems remaining fully operational.
She said many processes had already been automated while staff had secure remote access to systems as well as strong client and internal communications options.
“We’re using Microsoft Teams to stay in touch,” Tait said.
Bessmer said TE, likewise, had made a smooth switch to work-from-home mode under its BCP protocols: Microsoft Teams also plays a key role.
“All of our corporate trust and private wealth staff are working from home and 85 per cent of the fund administration staff,” he said. “We should have all staff working from home this week.”
But while the BCP and automated processes have set up TE well for the operational shift to work-from-home, Bessmer said employees might take some to time to adjust pychologically.
“There are other considerations,” he said. “Some people now have children home, others are alone. We’re working hard to keep everyone in contact and mentally well.”
Coincidentally, TE ran a full BCP test while shifting the fund operations office to new Willis St premises in Wellington just two weeks before the coronavirus-prompted shut-down.
“So we were well-prepared,” Bessemer said.
The shiny new TE office remains empty for now – although, not collecting dust as cleaners, like financial services, are classed as ‘essential services’ under the Level 4 lock-down rules.