NZX Wealth Technologies (NWT) plans to migrate all existing funds under administration (FUA) to the newly-launched platform built to house Craigs Investment Partners.
After successfully debuting almost $1 billion of Craigs money on the new platform last week, NWT would double the FUA by consolidating all clients under the one roof.
The legacy NWT platform, which emerged out of Auckland-based alternative investment shop, NZAM, holds just over $1 billion on behalf of nine financial advisory groups.
Craigs shifted about $950 million – comprising the group’s KiwiSaver, superannuation and MyStart products – across from its in-house system to NWT last week after a prolonged transition period.
Stephen Jonas, Craigs head of client services, said in hindsight given the complexities of adding KiwiSaver and self-managed investment options the long lead-in time for the new platform “made sense”.
“There’s a lot of moving parts,” Jonas said. “But the implementation has gone very well and we’re all pleased.”
He said the new administration platform offered Craigs much greater ability to offer more flexible services to clients at scale. About 18,500 Craigs clients would see their funds administered on NWT with an average portfolio size of $50,000 or so.
If Craigs were to shift the rest of its $16 billion portfolio to NWT to administer, the NZX-owned business would leapfrog ahead as the country’s largest investment platform. The wealth management firm currently uses an in-house administration platform built on Chelmer technology for non-pooled product clients.
It is understood rivals Aegis and FNZ hold about $12 billion and $14 billion, respectively.
Regardless, other potential NWT clients would be watching the Craigs deal closely. For example, Hobson Wealth (formerly Macquarie NZ) could rejoin the NWT queue it abandoned earlier this year.
In July, Warren Couillault, Hobson executive director, said the group pulled out of the deal – with a reported $3 billion at stake – partly because the NWT plan “included a trading platform, which we decided to build ourselves”.
“In the meantime we have parked our custody arrangements with our existing provider [Aegis]. But we’ll have another look at that in the next three to six months,” Couillault said.
According to NWT chief, Lisa Brock, the successful launch of the new platform would shore up its claim to offer the “leading New Zealand financial markets infrastructure for retail custody”.
The addition of KiwiSaver and super scheme (including UK pension fund transfers) functionality created “a very comprehensive custody offering”, Brock said, with a broad range of opportunities.
“Interest from potential customers remains strong, and we look forward to reaching out to this pipeline as we move to grow our client base and refine our product offering,” she said.
Brock said all NWT assets would be held under custody with access to a “deep set of functionality, as would be required by complex financial services businesses”, including:
- the ability to use multiple custodians;
- integration with third-party CRM and documentation systems;
- a range of tools covering services such as order and trade management as well as task and workflow management;
- issuance of client contract notes;
- customised client reporting templates;
- end investor trading capabilities;
- client self-registration functionality; and,
- currency trading capability.
For the time-being NWT was unlikely to host the fellow NZX-owned SuperLife KiwiSaver and superannuation products, which operate under Smartshares. Graham Law, NZX chief financial officer, said the NWT platform was targeted at financial advisers.
“It would be up to the Smartshares board anyway,” Law said. “But if there were synergies [of shifting SuperLife to NWT admin] at some point I’m sure that would be considered.”
The NZX bought NWT, then known as Apteryx, for $1.5 million in 2015 from interests associated with NZAM. Apteryx itself had been through many different guises (including under the Amadeus title) after being created within NZAM in the 1990s.
Paul Baldwin, who helped build the ASB-owned Aegis platform, ran Apteryx from 2010 and remained in charge of NWT until last year when he stepped down due to health concerns. While Baldwin remains as an NZX director, Brock, also an ASB alumni, took over the lead NWT role in 2017.
Wendy Chandler, head of operations, and Jen White, who joined as head of risk and compliance last October, likewise came to NWT via Aegis.