UBS Australia (UBS) has no immediate plans to replace Praemium with a new third party portfolio administration service provider, rather it plans to enhance its existing offering.
“We can confirm that UBS has decided not to move forward with Praemium at this point in time,” a UBS spokesman said.
“Due to our service offering and the complexity of our nominee service, we feel the current enhancements to our existing platform offer the better longer-term solution.
“We will continue to invest and improve on our existing platform, and assess any third party alternatives as we deem necessary.”
Praemium announced to the Australian Securities Exchange yesterday that its service agreement with UBS had ended.
Under the terms of the UBS and Praemium agreement, Praemium was due to provide UBS’ Australian wealth management arm with an upgraded version of Praemium’s V-Wrap offering.
Praemium will now provide the enhanced V-Wrap offering to its existing clients and look at new opportunities, Praemium group chief executive Arthur Naoumidis said.
“Whilst it is disappointing, we are quite encouraged about our future,” Naoumidis said.
“We are now able to pitch to nominees and custodians, which we have not been able to do before, so that expands Praemium’s addressable market.”
As a result of the breakdown in negotiations, Praemium will refund the $250,000 advanced by UBS in anticipation of the commercial arrangement finalisation.
“As the group has no debt and its Australian business has continued to grow, this will not have any significant impact on Praemium’s financial position,” a company statement said.
UBS appointed Praemium as its preferred tenderer for portfolio administration service provider in November 2007.
