The UK investment industry is facing a proliferation of share classes as fund managers launch clean and super clean share classes across platforms, says Bravura’s Andy Chesterton
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What are some of Bravura’s key highlights from the past year?
Last year was particularly successful with several contracts signed by new and existing blue chip clients, whilst a significant number of client implementations and upgrade projects were also undertaken. We are extremely pleased to have renewed two significant transfer agency technology deals with our third-party administration partners.
In addition, on the wealth side of the business we were selected as a preferred vendor by Fidelity FundsNetwork and Ascentric in the UK. Both will be using our Sonata administration system to support their investment platform propositions.
We believe our success is testament to our expertise and strong solutions in the transfer agency and wealth management space. We’re proud to be working with some of the world’s largest financial services firms.
Our recent success affirms our strategy focusing on delivering best of breed systems for the asset servicing industry in Europe. With several new wins and continued growth we have significantly strengthened our consulting teams and offshore development centres.
We continue to offer a full suite of transfer agency solutions including core admin systems, web-front ends, STP connectivity and an operational data store. This complements the long-term research and development investment we have made in our Sonata system, which is starting to bear fruit with significant business wins across the EMEA and APAC regions.
Which regulations are most impacting your clients’ businesses?
As a consequence of the Retail Distribution Review (RDR) and the decision to ban cash rebates, the UK investment industry is facing a proliferation of share classes as fund managers launch clean and super clean share classes across platforms. The industry must find a working share class conversion and re-registration solution upon which all parties agree. Significant progress has been made but overall harmonisation of standards is essential. That’s why Bravura is actively involved with the Tax Incentivised Savings Association (TISA) working groups in this area. Another result of RDR is that retail-focused fund management companies are looking for greater efficiency gains. Our technology lends itself well to this.
The Foreign Account Tax Compliance Act (FATCA) is also having a significant impact on the investment management industry as it covers funds, distributors and asset managers. We are currently awaiting the reporting requirements that will enable clients to fulfil their obligations under the legislation. The official version is expected early this year, with reporting due to start in March 2015 for the year 2014.
In addition, the Markets in Financial Instruments Directive (MiFID II) in Europe will affect our clients moving forward. The Europe-wide ban on payments made from product providers to independent financial advisers will be similar to measures already in place in the UK. We are also keeping an eye on the Financial Transaction Tax (FTT). While it is possible this charge will not apply to mutual fund transactions it will impact the underlying investments and as a consequence may drag performance. It looks like redemptions settled in specie will be subject to the charge.
What other industry trends do you see impacting the transfer agency space?
Clients are under constant pressure to improve efficiency and reduce risk, whilst managing costs. Increased use of STP is one mechanism for eliminating manual and time-consuming administrative processes and fund management companies are increasingly opting for full automation to include settlement across the transaction processing cycle.
In the transfer agency industry, focus is on the increasing data-driven demands from regulators, clients and investors. This data theme will be reflected in a growing demand for surround technology solutions, such as web front-ends and data warehouses that break down isolated silos and consolidate data from multiple back-office systems. Web-delivered solutions that offer convenient, time-saving access to customised data and optimised reporting can provide fund managers and administrators with an enhanced service offering, operational efficiencies and a significant competitive advantage.
We are also seeing system consolidation, with third part administratos reducing the number of transfer agency systems they run. This reduces costs and of course boosts efficiency.
Where do you see growth opportunities and demand?
We have a strong and increasing pipeline of opportunities for our Sonata platform on the wealth management and life insurance side of our business.
Having signed our first APAC managed service agreement with a New Zealand based client in 2013, we expect to see further interest in our managed application services offering. This service includes hosting, comprehensive end-to-end support, delivery and service management of our client’s business critical systems.
In the last eighteen months we have also developed direct connectivity with NSCC in the US and FundSERV in Canada. We see further opportunities around the enhancement of our Babel STP financial messaging solution as businesses identify efficiency savings through increased automation.
What are your plans for Bravura in 2014?
This year we will continue to grow development capability around our Sonata platform solution as well as maintaining our proven transfer agency delivery record and high quality services. Our focus will be on implementation and ensuring our modern technology, managed services and flexible solutions provide the tools for clients to realise significant cost savings.
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