Background
Adminis is a New Zealand-based custodian and fund administrator, providing investment administration services to fund managers, DIM’s managers, corporate trustees and retail clients via InvestNow & Kernel Wealth’s on-line investment portals. They are an innovative, technology-led business that is leading a step-change in the quality, efficiency and sophistication of New Zealand’s financial services industry.
Adminis was launched five years ago from Crema Capital, a boutique Wealth Management service for high net worth individuals.
The challenge
Across Australasia all too many financial organisations are still conducting their fund trades manually, whether that be via email or by fax. Adminis process thousands of these trades per week for a multitude of clients across the country. Like many others, Adminis were required to manually copy and paste each trade into the prescribed forms required by fund managers. This included account codes, many of which were similar to one another, introducing risk.
On an average day it could take anywhere between 10-15 minutes to process each manager’s orders, with over 100 aggregated orders being sent per day, significantly impacting overheads.
‘Email and fax are highly risky – occasionally the order didn’t turn up on the other end, and we didn’t know they hadn’t, causing delays. We were also subject to fax lines being available. Consequently, the main challenge was risk,’ said David Campbell, Head of Operations at Adminis.
‘If we made any input error the trade would be rejected and we’d have to rekey it meaning we could miss cut-off deadlines. Additionally, due to the manual transmission process, we received no confirmation the trade was received by the administrators. This proved challenging when many managers have cut-off times early in the day.’
Adminis sought to remove this timing-consuming complexity by moving towards automation and an electronic process.
Selecting Calastone and onboarding: Order Routing
In April 2018, Adminis’ operational work massively expanded after the InvestNow platform acquired Rabobank’s fund clients. This necessitated a much greater focus on increasing their operational efficiency to ensure service levels could be sustained with the additional flow.
Campbell added, ‘Calastone had recently entered the New Zealand market and we recognised what they were already achieving in other markets. Manual processing had been an area of concern for us for some time, so implementing automation as quickly as possible was a key priority for us.’
For onboarding, Adminis praised the simplicity of getting up and running. Once all of the relevant documents had been signed off, they were ready in just a few days. Describing the process, Campbell said ‘The onboarding was absolutely fantastic. All of the documentation was straight-forward and we made very few changes. Our account handler was very proactive and supportive, so we were very, very happy overall.’
The set up and testing was organised through the Calastone Operations Team and they supported any unique requirements and training for the Adminis team.
He added, ‘The online access was immediate and the system was very intuitive. The Operations team helped us and got us to learn the system very quickly. We were blown away by how fast it all was.’
Wide market coverage was a key consideration during the selection and onboarding process. Although Calastone were already connected to a number of managers, they continue to support Adminis since go-live by engaging with and onboarding other managers.
‘This enables us to continually improve our STP and processing rates’, added Campbell.
Key benefits
‘Error rates have now dropped to nil for trades sent via Calastone because we receive confirmation of orders from the third-party administrators immediately, and we have the confidence everything has been done on time,’ said Campbell.
Through Calastone Adminis have now generated an 80% time saving. This has enabled them to produce a faster and more efficient service for their clients, enabling them to become more scalable and enhance their service offering with their continued growth. With so much time saved, people in the business have now started to look at how these processes can be further improved and automated.
‘There’s definitely a sense amongst staff that we have a lot less to worry about. We’re safe in the knowledge that everything is working as it should, and that the plans for the business are future proofed.’
Adminis have now achieved STP rates of 65% across their whole business. This should rise to 85% in the coming months, when two key administrators also join the network.
Campbell added, ‘Our volumes are increasing significantly, but we haven’t had to make any further changes because Calastone has built-in volume sensitivity for us. Clients can keep adding funds and we can handle the scale.’
For Adminis, implementing Order Routing has worked as a catalyst for changes throughout their Operations, enabling them to further drive efficiency in other areas.
Ongoing support and going forward
Adminis have found the support provided by Calastone to be consistently responsive and effective since going live. In addition, they have found the network to be fully resilient, 24 hours a day.
Campbell said, ‘The UK Operations Team is awesome. We are constantly staggered by how fast they reply to our queries. It’s almost like they’re sitting there waiting just for us to send something so they can respond to it.’
There are a number of new areas that Adminis have started working with Calastone on. They are currently looking to automate asset transfers, which are currently conducted manually, introducing significant cost and risk. Commenting on their future relationship with Calastone, Campbell said ‘We’re looking forward to this as it will bring so much efficiency to the market for people moving between custodians, as well as people moving asset transfers into a custodial account. We’re also keen to work with Calastone on developing a more efficient reconciliation process, so that we can reconcile our holdings on the same day a transaction has been completed.’
Campbell concluded by saying, ‘From an administrative perspective it’s been a great experience, we’re well supported, both from in Australia and the UK. We just think it’s a great tool and we’re excited to see it evolving and bring more efficiency to our business as we grow our client base.’
