NZX Wealth Technologies has won two new clients set to be “onboarded” this year, according to head of the local bourse, Mark Peterson.
Peterson told the group’s AGM crowd in Tauranga last week that the NZX-owned investment platform had landed the two new clients via recent competitive tenders.
The latest Wealth Technologies wins follow the arrival of Hobson Wealth and Saturn Advice, more than doubling the platform’s fund under administration (FUA) to over $7.3 billion as at the end of March.
Last year, the platform also signed on JB Were while more recently incumbent client, Public Trust, agreed to shift across to the new technology from the NZX legacy service.
In the AGM presentation, the NZX still penciled in platform FUA to hit $20 billion this year, rising to between $35 billion and $50 billion by 2023.
“NZX Wealth Technologies is currently engaged with a number of new prospects for project activity, and expects to see continued growth in 2021,” Peterson said.
As well as the platform developments, the NZX chief said the group’s funds management arm, Smartshares (including the SuperLife), was performing above target after attracting “more than $800 million in net investor cash flows” during 2020.
“Key initiatives included the launch of the Smartshares Core Series, with New Zealand’s lowest cost fund tracking the S&P/NZX 50, and Select KiwiSaver our first third-party hosted scheme,” he said.
“As the market leader in Exchange Traded Funds (ETF), it has been encouraging to see some institutional investors starting to move into passive investment products through the Smartshares ETFs and its unlisted passive products – mirroring global trends.”
For example, it is understood Smartshares has recently won a large KiwiSaver mandate, yet to be transitioned.
Peterson also said financial advisers can now “access our unlisted passive funds for the first time” after inking deals with “leading” NZ wholesale and retail platforms.
According to the latest NZX monthly metrics, Smartshares total funds under management peaked above $5.4 billion at the end of March, comprising almost $4.8 billion in ETFs with the remainder in SuperLife and other unlisted products.
James Miller, NZX chair, told the AGM that over the last year the stock exchange had “seen the most significant re-engagement with equities as an investment class in the past 30 years”.
“Retail participation has been at levels never seen before in our
sharemarket, and I want to give some credit where it’s due.
We celebrated the arrival of Sharesies as an NZX Trading and Clearing Participant less than two years ago,” Miller said.
“And wow, what a supercharged start they’ve had – together with ASB Securities – helping boost retail participation to about 19% by value and 45% by volume of total trading at the end of 2020. The popularity of online retail trading platforms is burgeoning, and that’s about easier and low-cost access for DIY investors – which is positive for our market, and spurring interest and investment in our issuers.”
However, the NZX chair did note the surge in trading activity over 2020 “exposed some stresses within specific elements of the market infrastructure”.
Miller issued a formal apology for the NZX technology issue that disrupted trading for several days.
“I also want to express my appreciation again for the support and collaboration across the market – particularly in the back-office activities of participants – that meant all trading activity could be cleared and settled each day through this period,” he said.
“We have acknowledged – as has the Financial Markets Authority (FMA) – that we did not meet our own high standards in certain areas of our technology systems as a result of these volume-related issues, and also with regard to the unrelated cyberattacks in August.”
Following two separate external reviews performed by EY and InPhySec, the NZX had implemented recommendations to “ensure our IT and cybersecurity processes are stable and secure”, he said.
The NZX also appointed a new chief technology officer, Robert Douglas, and hired former Nasdaq stock exchange system specialist, Peter Jessup, in a consultancy role.