Century-old wealth management firm Equity Trustees (EQT) has announced it will join the Calastone transaction network, indicating growing demand for automation services from the Australian-managed fund industry.
EQT has signed on to the network's order routing service, allowing its 52 fund managers to electronically send and receive messages and perform cross-border transactions relating to its mutual fund services.
"We see significant risk management, cost and efficiency improvements from this approach, which greatly reduces the potential for error in back-office transactions," said Harvey Kalman, EQT's head of corporate fiduciary and financial services, in a statement issued on November 26.
"We will be rolling out Calastone's order routing network across our unlisted unit trusts over the next few months as part of an upgrade of our IT systems," he added.
According to Calastone, the risk minimisation benefits of the network include the ability to "see the status of all orders at all times via the Calastone Execution Management System" - a feature the company claims is unprecedented - and have "instant visibility of any issues or orders needing attention".
Calastone's co-founder Kevin Lee is encouraged by the take-up rate of Australian wealth management firms.
"Leaders of the industry have been quick to embrace the benefits of automation," he said, adding that "electronic transactions offer risk management and cost benefits that just can't be realised with old-fashioned fax and phone-based processes."
Lee said the adoption of automation services would further prepare the Australian managed fund industry to compete with "more developed counterparts in the US and Europe".
EQT's adoption of the Calastone network follows similar moves by other significant market players this month.
On 20 November, Calastone announced that US-based investment banking giant Goldman Sachs has signed up to Calastone's order routing service for its funds domiciled in Australia, while on November 13, Singaporean investment firm PhillipCapital also joined the network.
PhillipCapital managing director Loh Hoon Sun said the move indicated his company's encouragement of innovation and investment in information technology.
"We are delighted to adopt Calastone's transaction network to bring tremendous benefits to the business," he said.
