Case study: The mention of back-office systems might give most advisers glazed eyes, but those who w...
Case study: The mention of back-office systems might give most advisers glazed eyes, but those who wise up to the benefits of new technology could see pound signs instead.
EMX, the industry's electronic messaging platform for unit trust trading, already helps 70 intermediary clients cut costs and improve efficiency by moving trades from paper into electronic form. According to its chief executive Phil Wise, that number is expected to increase as more and more providers sign up and a critical mass of users is reached.
But, in fact, far more advisers are already unwitting beneficiaries. That is because EMX also drives the unit trust trading of various third-party administrators ' like our wrap service Transact.
Transact essentially allows advisers to mix and match unit trusts, investment trusts and other shares ' plus assets like cash and hedge funds ' into tailor-made portfolios. There are big advantages to this consolidation: besides instant online valuations, the adviser only has to deal with one provider and is freed from administration hassles.
Like any firm, Integrated Financial Arrangements also seeks new ways to cut costs and increase efficiency. For the past six months, we have used EMX to move our paper dealings in unit trusts and Oeics into electronic messages for Transact. All businesses have operational costs so any service that can save time also saves money and staff.
It's not just quicker than the telephone ' it produces better audit trails, makes reconciliation easier and, as the additional services are added, it will keep adding value.
Before using EMX, our staff would telephone fund managers to place their orders ' a standard process, but one that takes time.
According to Graham Beevers, our operations manager, this new technology cut the workload by three-quarters.
Those gains have been further improved by new EMX technology released last month. Previously, our system would tell us what we had to buy or sell, which we would the key into EMX. Now, the system talks directly to EMX so our people don't have to sit at a terminal and key it in.
Whereas contract notes from fund managers can take up to a week to arrive, EMX transaction records arrive within a day. As a result, client records can be updated much more quickly.
A new facility is also coming that will capture those messages in one electronic hit ' increasing our speed further. And there are more developments in the pipeline. EMX will soon offer transaction listings from fund managers, detailing which funds have been bought and sold in a particular timeframe.
With the new transaction listings, many labour-intensive tasks will all be in the past. Instead of individually reconciling our own client records, we will be able to get a complete record from a fund manager to compare with our own transaction trail.
Electronic processing will save time and money and help make the industry more profitable.
Electronic messaging has certainly helped us run business smoothly as user volumes have increased. But other firms could take a leaf out of our book.
For one thing, adopting new back office technologies can help the bottom-line in an environment of growing cost pressures. Second, if you put the work in early enough, the technology can be adjusted to suit you so that you are getting a service that truly integrates with your own back office.
And that is not all. With markets in such turmoil, clients are bound to be banging on advisers' doors for guidance. Shifting the focus from administration frees advisers to concentrate on what they do best ' giving advice.
Ian Taylor is managing director of
Integrated Financial Arrangements
Two global vehicles
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