netwealth Investments Limited

The client

With a history in international trade and finance dating back to 1865, netwealth is well regarded by astute investors who rely on its solutions to invest and protect their current and future wealth.

The company offers a range of innovative investment and superannuation solutions to more than 30,000 members and investors. It’s also the custodian for the netwealth Superannuation Master Fund, the netwealth Wrap Service and the netwealth Global Specialist Series Funds.

netwealth has 200 employees across Australia who work in tandem with thousands of partners to achieve its stated aim to help clients achieve financial security.

The Opportunity

Previously, netwealth sent out all of our orders via fax. It was inefficient and there was no transparency as to whether an order had been received or any guarantee it would be processed. There was also the cost and risk associated with manual processing. Faxes might be incomplete or literally slip through the cracks meaning critical requests could be missed or significantly delayed.

Calastone offered an automated solution that would allow netwealth to communicate to all our counterparties in our chosen format. No additional infrastructure was required and implementation was fast and simple – it ended up taking three weeks from start to finish.

What solidified your decision to work with Calastone?

We are always looking for opportunities to provide a better service to our clients and increase efficiency. As soon as we met with Calastone and saw the potential to automate the managed funds process, we wanted to get on board.

We had come across other businesses that had tried to do the same thing, but it required all parties to have the same standard, which creates a barrier to entry. When we understood that there would be no cost to us to implement or transact, it was an obvious decision.

In fact, netwealth was one of the first platform providers to connect to the Calastone Transaction Network in Australia.

How has automation of the managed funds process changed your business?

Three years after implementation, more than 60 percent of our transactions go through the Calastone network.

It’s delivered incredible back-office efficiencies saving up to two hours per day in the transmission of instructions to fund managers alone. The receipt and processing of confirmations has also been dramatically accelerated. Rather than waiting for days for confirmations, they are now available immediately prices are struck. The fact that they are electronic also eliminates the potential for processing error via data entry. The need to chase fund managers has been negated as, effectively, Calastone do this on our behalf. This also ensures a time saving of many hours per week.

We also have complete transparency of all orders going through the network. An order goes out and we get a status message in 15 minutes or less confirming it’s been received and is being processed by the fund manager.

How is Calastone helping you manage reconciliations and distributions?

Reconciliation can be costly and time consuming with funds sending multiple statements in different formats. Working with Calastone has allowed us to consolidate these statements for easier and faster reconciliation. We no longer receive statements by fax, email or by going into different fund manager websites, we simply receive the file all in the one format. The receipt of the balances in this manner saves us approx 2-3 of work days per month. That is with only a small percentage of fund managers using the functionality so clearly the savings in man hours will be huge should all fund managers utilize the service.

We are currently testing Calastone’s tax statement service with the plan to go live before the end of financial year. This will allow us to electronically receive annual tax statements directly from fund managers, enabling us to provide them back to our end clients at the earliest opportunity. Currently, this information is mostly transmitted by fax, post and email with too much room for manual error and time delay.

What’s been your experience working with Calastone?

Implementation with Calastone was fast and easy, and it established a high benchmark for our relationship which they have continued to deliver on as part of the service. They are continually looking at ways to make the industry more efficient and pushing us towards best practice.

We have had fantastic support from the operations side as well. They keep watch over our orders 22 hours a day and are quick to contact us or our partners with any potential issues. In fact, if we don’t send our orders by the normal time each day, they pick up the phone to see if everything is alright.

All in all, Calastone helps our business run smoothly so we can focus on delivering results for our clients.

What’s next with Calastone? How do you plan to increase your straight through processing?

We recently had a situation where our fax machine broke down and we could not get our orders out for the day. This highlighted the importance of having more of our partners on the Calastone Transaction Network. Even having our smaller partners on the network removes some of the pain from our operations and increases efficiency.

Calastone has been very supportive of our goals to increase our straight through processing. We meet with them regularly and know they are working hard to bring more partners on board. Internally, we are looking at other options of encouraging our partners to go live on Calastone. Manual transacting brings unnecessary risk and cost and it’s time for the industry to move forward.

We are also talking to Calastone about automating asset transfers. We know this is being done in the UK and there are obvious benefits for us and our partners here in Australia.

With thanks to Alistair Densley, General Manager , Operations and Paul Hagger, Manager, Custody at netwealth Investments Limited

For information, contact: sales@calastone.com