A world where animal spirits are running wild is also one that has temporarily divorced from fundamentals. Experience tells us this often doesn’t end well.Â
The wealth transfer from Baby Boomers to their offspring, which is in full swing, has got the taxman’s full attention, especially as it pertains to capital gains payments, trust structures and potential breaches of the Tax Act’s Division 7A.
Xplore asset servicing contract goes beyond the norm
The ASX-listed Xplore investment platform business, formerly known as ‘managedaccounts.com’, has reconfigured its asset servicing arrangements after a review by MSI Group. J.P. Morgan is the big winner, but new FX and cash management efficiencies are likely to be replicated by other fiduciary investors.
Patrick Liddy, MSI Group principal, and a former asset servicing executive at State Street and NAB Asset Servicing, said last week that big investors, such as Xplore, needed to pay more attention to their investment administration. “Xplore is saving a significant amount through this new arrangement,” he said. “Those savings will be passed on to its clients and members.”
According to last week’s announcement to the ASX, J.P.Morgan will take over all of the Xplore custody contracts, which total about $16 billion under management and advice. The wholesale admin and funds management firm will also be involved in a new agreement aimed at saving a significant sum for Xplore’s investors, through improving foreign exchange and cash management handling.
Liddy believes that fund managers and big super funds are “notoriously lazy” with their handling of foreign exchange (FX) and cash management. “The world is changing and custodians need to change with it,” he says. “Every client needs to be a bespoke offering. And the ‘end-client’, the member, should be the key driver and most important person in the whole process.”
Xplore was established by the wealth management and financial services entrepreneur Don Sharp, who is a big shareholder and non-executive director. He is a strong believer in the managed accounts trajectory, to probably replace the unit trust system that the Australian wholesale industry sector has relied on for a long time.
– G.B.
