According to Calastone managing director Shannon Sweeney, the reconciliation of managed fund holdings and transactions currently takes up to 15 business days.
The function is being performed by back-office staff who enter the data manually – whereas “virtually everything else to do with our finance is electronic”, she said.
“These processes have remained largely unchanged since the 1980s and involve unacceptable levels of risk,” she said.
Even worse, if an issue is detected in the process, investors can be out of the market for as long as a month. “In a volatile market that means that the historical unit price to correct the issue can be quite significantly different from the one they view their holdings at today,” Ms Sweeney said.
The lengthy delay in reconciliations can have a knock-on effect on income distributions, since distributions are applied to a reconciled holding.
The Calastone reconciliation system – which sits between fund registries and platforms, custodians, SMSFs, wealth platforms and brokers – allows managers to instantly produce statements of holdings and transactions in one format for all platform providers.
“Previously this information was only available on a monthly basis in multiple manually-produced formats,” a Calastone statement said.
Managers can now instantly produce statements of holdings and transactions in one format for all platform providers, the firm said.
netwealth is the first firm to go live in Australia with the new Calastone technology.
