Perpetual to outsource administration platform
Perpetual has announced it will outsource third party provision of portfolio and fiduciary administration services for Private Wealth clients to Macquarie Investment Management, to be launched in late 2012.
Macquarie will add Perpetual-specific functionality to an existing third party systems and administration solution, with additional features and infrastructure, Perpetual stated.
Perpetual will decommission its older platform administration system (PACT) and transfer a significant level of IT development requirements to Macquarie, the group stated.
Perpetual's group executive private wealth and head of retail sales, Geoff Lloyd, said the group needed to improve on the functionality of its platform offering in line with an evolving business and client servicing model.
The new solution will allow Perpetual to widen the range of products and assets offered, support a multi-platform environment, and ensure Perpetual can target-specific customer segments in a more efficient way, Lloyd said.
Perpetual will be able to offer additional products, such as a Super Wrap (which Perpetual expects to be available by the third quarter of calendar 2012), and build a full spectrum of advisory, investment and fiduciary solutions, the group stated.
Perpetual managing director and chief executive, Chris Ryan, said the decision was in keeping with efforts to reduce the company's cost base and redirect resources towards growth opportunities.
The outsourcing deal avoids ongoing system spend, and more closely aligns operating costs to actual revenues, Ryan said.
"In the context of possible regulatory changes and rapidly evolving client needs, the cost of maintaining PACT's functionality at required levels would have been prohibitive," he said.
Perpetual expected the deal to incur one-off costs of $5.5 million before tax in the current 2012 financial year, and $11 million of costs before tax in the 2013 financial year, of which $6.6 million are expected to be non-recurring.
Perpetual anticipated a positive profit contribution from the 2014 financial year, with positive net present value over five years due to the combination of revenue and expense benefits.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
