In an announcement on the ASX on Tuesday morning, Insignia Financial announced it has entered into an initial agreement with SS&C Technologies to provide administration and technology services for Insignia’s Master Trust business.
While Insignia noted that the agreement is not final and there is “no certainty” the negotiations will result in any transaction between the parties proceeding, it expects final binding agreement to be completed during the first quarter of 2025 ahead of transition of services in mid-2025.
The firm said the agreement comes after a “detailed review of Insignia Financial’s Master Trust strategy”, which saw the company consider a range of different options to simplify its existing multiple technology platforms and administration operating models into a single platform and operating model.
“This is an exciting announcement for our people, customers and shareholders, and the next step in our vision to become Australia’s leading and most efficient wealth management company by 2030,” Insignia Financial chief executive Scott Hartley said.
“As I’ve said before, in our Master Trust business, we have size but not scale. This arrangement will help us convert our size into meaningful scale benefits for our more than 1 million members over the next few years through lower cost-to-serve, competitive fees for members and industry-leading service outcomes. Members will benefit from an enhanced experience delivered by contemporary technology.”
The finalised deal, Insignia said, will see a range of administration and technology functions for Master Trust subcontracted to SS&C, including the transition of more than 1,000 people as well as technology from Insignia Financial to SS&C.
The firm said it would continue to provide servicing and administration functions, including claims and complaints.
“By transitioning Insignia Financial’s employees to SS&C, our members will have continuity of service, operations and product knowledge,” Hartley said.
“Following the successful separation from NAB last month, this is the next step in simplifying our Master Trust business and a critical step to achieve our targeted net $200 million reduction in base opex by FY30.
“It is anticipated that this model will deliver a simpler operating environment for our Master Trust business, allowing us to focus on areas such as product, retirement offer, investment performance and returns, advice and guidance, while keeping key service and administration functions such as claims and complaints.”
He added that working with SS&C will allow Insignia to take advantage of its “global expertise, technology and business processing capabilities”.
“Our members will also benefit from their continual investment in improved capability and the speed at which they’re able to deliver increased benefits for members,” Hartley said.
“For our people transitioning to SS&C, this also presents a great opportunity to be part of a large global enterprise with ambitions to be a leading super administrator in the Australian market, and the career growth and development opportunities that come with that.”
Bill Stone, SS&C chairman and CEO, said: “We are pleased to partner with Insignia Financial in this transformative collaboration. As a leading global fund administrator, our goal is to enable our customers to reach their business objectives at scale.
“We look forward to working with the team to deliver superior outcomes for Insignia Financial’s members and bring significant cost savings and efficiency to their Master Trust business. As a result of this partnership, we will also acquire significant capabilities and a talented team of operations, technology and delivery people who can help us achieve our ambition to become the leading super fund administrator in Australia.”
According to the ASX announcement, the two parties will now continue joint discovery, planning and approvals, with the aim to sign a binding Master services agreement in the first quarter of next calendar year.
