Under the new administrations services agreement, Mercer will utilise Praemium’s Virtual Managed Account (VMA) solution and administration services (VMAAS).
In a statement to the ASX, Praemium said that Mercer would receive end-to-end integrated portfolio administration and reporting services through Praemium as the firm grows its Australian wealth management capabilities.
This will initially include almost 400 client portfolios being administered by Praemium.
“The Praemium and Mercer teams have constructed a market-leading solution for their high-net-worth clients,” said Praemium chief executive Anthony Wamsteker.
“We are very grateful to have had the opportunity to collaborate with Mercer, a trusted expert in investments with significant global capabilities. Mercer has been an exemplary partner and we look forward to a strong relationship with them.”
Mr Wamsteker added that Praemium’s VMA solution manages over 60,000 separate portfolios, while VMAAS supports over $23 billion in funds under administration (FUA).
“We provide solutions to several of Australia’s premier advisory and wealth businesses including Mercer,” he said.
The announcement follows a strong full-year result for Praemium, which saw the company’s revenue increase 17 per cent to $74.3 million, bolstered by $1.4 billion in inflows and a 9 per cent increase in total FUA to $44.0 billion, alongside positive equity market valuations and improved cash administration fee contribution.
Meanwhile, the FUA of the firm’s VMAAS non-custodial portfolio administration and reporting service lifted by 4 per cent on the year prior to $21.8 billion.
At the time, Mr Wamsteker and Praemium chairman Barry Lewin indicated that Praemium’s control of the key modules of its technology architecture provided it with a “competitive advantage” that allows the firm to prioritise developments that it sees as being most beneficial for its preferred client segment.
“Given the breadth of asset types demanded by high-net-worth investors, we have consistently built data feeds, interfaces, and integrations with a wide range of market participants,” they said.
“Going forward, this particular expertise stands us in good stead as financial advisers seek better integration with other parts of their desktop architecture, especially advice planning tools and emerging artificial intelligence applications,” the pair added.