Finanzplan Broker-Network, the South African operation of Germany`s giant financial services broker network, has chosen the I-Trac Broker Network Administration System from Global Technology subsidiary Investment Technology Solutions as its core business system. The decision was made to underpin Finanzplan`s growth, which is expected to be exponential over the next three years.
The initial contract is worth R500 000, with an estimated R1.5 million annual renewal value.
Finanzplan is the largest organisation of its sort in Germany, with more than 3 500 individual financial advisors (IFAs) operating under its auspices. The South African operation has attracted 200 to date, but Vincent Patterson, head of Finanzplan Broker-Network, expects this number to rocket over the next two years as new regulations - specifically the Policy Holder Protection Rules and the upcoming Financial Advisory and Intermediary Service Bill - force strict compliance on IFAs.
"Government`s concern with the variable standard of the financial services sector has seen it implement strict conditions on IFAs, conditions which are difficult for many to address and fulfil," says Patterson. "Finanzplan takes care of these considerations, such as general client management, on behalf of the IFAs, allowing them to get on with the business of advising their clients. As the fastest growing broker network in SA, we`re expecting many more IFAs to contract with us to ensure they are compliant."
Regulatory best practice compliance is a natural, evolutionary development in a maturing, increasingly healthy market, says Richard Rattue, marketing director of Cape-headquartered Investment Technology Solutions.
"We`ve seen it happen in the UK, and now it`s happening here. It`s all about protecting investors` rights and ensuring a common standard of excellence and financial protection. We developed I-Trac with world-class best practice compliance standards in mind to enable the IFA to prosper and thrive within the regulatory framework."
On behalf of IFAs, Finanzplan Broker-Network - the first subsidiary outside Germany - acts as a collective, consolidation platform, centralising administration, product tracking and valuations on behalf of IFAs. "We looked at various options on the market, and chose I-Trac. Apart from its general excellence as a client portfolio management and administration system, its structure enforces compliance: there is simply no way to introduce a client or investment without adhering 100% to the system," says Patterson.
Compliance is the ability to go back in time to prove that certain events happened, and that the events were in the best interests of the client, notes Patterson. "In every sense, then, the new system is protecting the client and putting his interests first. That process also serves to protect the IFA."
Finanzplan had been running an in-house system, but it lacked integration, functionality in depth and the compliance regimen. "In addition, all other systems we looked at presented compliance as a separate add-on to the core, transactional system. In our experience, you can`t separate data from process. When you do, you hit risk, which we are trying to eradicate."
Functionality in I-Trac includes portfolio management, revenue management, business management, client management, business risk management, multi-currency support, full commission tracking and commission splits. The inherent scalability of I-Trac is key, Patterson adds. "We`re expecting dramatic growth, and our solution had to be able to cope with this. We`ve satisfied ourselves that I-Trac will grow with us."
I-Trac has been implemented on a Microsoft platform, running against SQL Server 7, which, Rattue says, is fully capable of handling the predicted transaction volumes Initial growth is expected to be in the region of 1 000%, with concomitant transaction flow.
The depth of bancassurance experience and critical mass of JSE Securities Exchange-listed Global Technology played a key part in Finanzplan`s decision to go with I-Trac, adds Patterson.
I-Trac has gone live internally, and will soon go live externally. "We took a greenfield approach, so this has been a relatively quick and easy implementation," adds Rattue.
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