Auckland-headquartered pioneer financial software firm, Chelmer, has established its first offshore beachhead to stage growth in Asia-Pacific (APAC) and Australia.
Chelmer opened an office in the Philippines capital of Manilla last week with two staff, which could expand to about six within the next year, according to the group’s chief innovation officer, Andy Robertson.
Robertson said the Manilla office would support regional growth rather than replace any of the firm’s 30-odd NZ staff.
“The Manilla team will do a type of work we don’t do in NZ,” he said.
In 2017 Chelmer partnered with Manilla-headquartered financial technology consultancy firm, Kris Finsoftware, to access Philippines banking clients.
But Robertson said Chelmer needed an on-the-ground presence to provide a “customised” service to Filipino clients.
“To be competitive in this market, customisation is key” he said in a release. “Trusted financial software specialists who can collaborate on solutions that are flexible, easy to integrate, address specific needs and add value are high in demand.”
However, Robertson said Manilla would also serve as a good base to spur growth in the APAC region with the financial hub of Singapore and Malaysia notable targets.
He said Chelmer was looking, too, to break into the Australian market, which was ripe for disruption as investors there shift more funds offshore and potentially “unbundle” investment platform operations.
“Australians generally invest more in local assets than New Zealanders traditionally have done,” Robertson said. “But as the Australian superannuation funds grow they will need to shift more into offshore assets.”
Given the NZ market was always “outward-facing”, Chelmer solutions were designed with global asset management capability, traversing currencies and jurisdictional rules.
Indeed, the by-necessity international attitude to wealth management administration was a key component in the offshore success of another Kiwi outfit, FNZ – which sold a two-third stake to a private equity consortium last year in a deal that valued the investment platform provider at almost $3.5 billion.
Unlike FNZ, though, Chelmer focuses purely on building the wealth management software nuts-and-bolts without the “custodial wrapper” that defines investment platforms.
The Australian platform market is changing rapidly, Robertson said, as advisers shift allegiances from bank-owned systems to independent providers like Hub24 and Netwealth. But he said the traditional bundled platform model itself could be ripe for disruption as wealth management firms look to separate out custody and distribution from the core technology.
Sofware-as-a-service firms like Chelmer could prove attractive if that scenario unfolds in Australia, Robertson said.
Nonetheless, he said financial businesses – especially the ‘high value’ firms Chelmer specialises in – don’t embark on technolgical overhauls lightly.
“Making big technology changes generally only happens when the pain of doing nothing exceeds the pain of doing something,” Robertson said.
Launched in 1988 Chelmer has been a quiet achiever in what is now known as the ‘fintech’ space, providing the core operational systems to a number of marquee NZ wealth management businesses including JB Were and Craigs Investment Partners (the latter is currently under review).
The business has “less than a dozen” NZ clients, which is a pretty full roster in local terms. And after 30 years building a domestic following, Chelmer is finally leaving home.
“We’ve been NZ-focused for a long time,” Roberston said. “But we have the complete functionality to be successful internationally.”