Australian investors in managed funds must put up with record keeping that is stuck in the Dark Ages. While a couple of unit registrars are genuinely interested in being the ‘scale player’, much of the market stagnates on the internal systems of funds managers, which struggle to reinvest in the latest technology, or on the registries of custodians which in some cases are unwilling providers of the service. Studies have suggested that the real cost of unit registry for every investor in every Australian managed fund is as much as $90 a year, stratospherically high compared to our peers. Turnaround times of three weeks on statement requests are industry standard. In December 2009, Conexus Financial (publisher of this magazine) and Computershare convened a roundtable to discuss how the unit registry process could be made more efficient. Overseas, transfer agency is typically a discrete, outsourced process, while in Australia it tends to live alongside the fund accounting and unit pricing functions. Is there a sound operational reason why this should be the case? Is the fragmentation and under-investment that’s rife in unit registry best solved by the emergence of true ‘scale players’, or by key stakeholders – perhaps a group of custodians – co-operating to build an industry utility which performs the most commoditised registry tasks? What role can initiatives such as SwiftNet and the ASX’s AQUA Rules for the quotation of ETFs and structured products play in enhancing efficiency? This roundtable discussed all of these questions, with a forum of pivotal players from the custodian, funds management and admin consulting worlds. The discussion aimed to produce a list of actionable steps towards giving Australian investors a better deal on their unit registry.
Participants at the roundtable were: • Warwick Angus, Executive Director – Group Business Development & Fund Services, Computershare • Michael Bailey, Editor, Investment & Technology Magazine • Chris Bain, Business Development Manager, Computershare • Chris Brideson, Partner – Business Performance Services, KPMG • Greg Bright, Director, Conexus Financial • Jeremy Don, Chief Operating Officer, Deutsche Asset Management Australia • Bryan Gray, Head of Sales & Client Management, JPMorgan Worldwide Securities Services • Mark Pratt, Chief Operating Officer, Australian Unity Investments • James Savage, Head Of Sales & Marketing, Tribeca Partners • Kay Sprague, Asia Pacific Head of Client Solutioning, Citi Global Transaction Services • Sam Watkins, Head of Structured Product Sales Australia, Credit Suisse • Tim Worner, Principal, Morse Consulting Warwick Angus: If you go through the insurance markets, the banking markets, they’ve all had stages where there’ve been logical evolutionary paths that they should take, and there’s a tipping point that creates that.
That’s a comparison we make between where share registry was 10 to 15 years ago, where for companies it became a question of where can you deploy best your capital, and unit registry today. There was an efficiency dividend in share registry that was reaped with the development of players who had the economies of scale to invest in technology. With the economic environment we now find ourselves in, funds managers are starting to ask “where are the cost savings going to come from?”, because the end investor now has higher expectations and wants, and it’s going to be increasingly difficult to meet them, from a unit registry standpoint, as individual managers or even as third-party administrators. How do you get the client service which, frankly, grows the pie for everyone, not tries to cut up the existing pie into more areas, because ultimately that’s done through the commercial reality of someone taking a hair cut at someone else’s expense?
Greg Bright: Can I ask a question from an historical perspective, and it’s going to go to Chris Bain at the end of the table. What I’m wondering is what value-add there is from the funds managers’ point of view of investing in unit registry? Chris was one of the early partners of County, then County Natwest. When County was sold by the National Australia Bank, all they kept from it was the registry, which was called the CARS system. County was an interesting manager. It got itself up to $16 billion and had a lot of staff. It invested enormously in the infrastructure, but I think that it never made money so NAB kept the registry system, and then flipped the rest of the business over to Invesco. It’s interesting that they kept the registry, and they still have it. That’s their core system, I understand. It’s taken them ages to develop it. So my question is, from a funds manager’s point of view what’s the value of investing in that type of system?
Chris Bain: Let’s start by saying that you’ve got to keep complex records when you are managing investors’ funds. You don’t just need to know what the security was and when the person bought it. You need to know their date of birth; you need to know a whole series of data about it. And those complex record-keeping systems are made far more complex when you have to fit in capital gains tax details, et cetera, et cetera. So it’s a relatively complex set of data that needs to be kept. And the fund managers have to do this, and each of them typically came at it their own ways. Systems were either brought in from offshore for them or redeveloped, or they were built from scratch, or somebody built one and gave it to someone else.
At the time that you picked out, Greg, which is County NatWest’s, I guess, ‘glory’ days of the late ’80s and early ’90s – we’re talking about the period leading up to and immediately after the 1987 crash – I would say to you that the Australian market was absolutely manufacturer-dominated. I strongly dispute that County didn’t make money. I think it made a great deal of money. I would say to you that the margins were significant, but a Don Argus would say, ‘Yeah, but your cost to income ratio was way too high’. We used to say ‘we’re special, we don’t need to worry about costings’. That was the problem in a manufacturer- dominated business, that people who ran it really just looked at what they needed. And when you’re manufacturer-dominated you tend not to think about your customers, and certainly not your end customers, in quite the way that you needed to.
And so what was built was a hotch-potch of record-keeping systems. There was no thought that it might need to interface into a dozen other systems, and anyway, the technology didn’t exist. So even if they’d wanted to build it in, the sorts of integrations that they built were pretty ugly and pretty clumsy. And we still see that today in things like HiPortfolio, and indeed, in most of the unit registry systems that are in place. So what did fund managers need to do? They needed to insure that they had integrity and security and compliance in their back offices, although to a far less degree than they need to today. They didn’t worry too much about any access. There was no such thing as the internet. I don’t think that the fund managers ever really understood that efficiency would become critical to price. And I don’t think that fund managers have ever really seriously competed on cost efficiency grounds in this country.
They competed on product. That’s a really important point to understand, because then what the fund managers are concerned to do, competing on product, is make sure that you’re differentiated in your product capability, which means you want lots of different little things that you can offer. You make sure that nothing goes wrong in your record keeping and admin, but you don’t worry too much in the end about the end investor, provided you’re giving them a fairly expensively managed product service. We’re living with multiple sets of unit registry systems that are incredibly inefficient, not just because they’re pre-internet, and not just because they don’t communicate particularly well, but because they have very little capability of delivering data out to the multiple places they need to go, including most importantly, to the client on demand in real time. Tim Worner: Chris, didn’t the wraps change the dynamic as well? Because now it’s not that important. The primary record keeping function is with the wraps and master trusts. Chris Bain: Yes, that is true, Tim, and that was part of a shift where distribution really grew and the power of the platforms themselves changed.
The notion of the omni-register, where you knew a great deal about the client and fed data backwards and forwards to fund managers also changed it. Bryan Gray: Fund managers didn’t know where to go in those times. I remember having conversations with County NatWest back in the early ’90s and they were very keen to get rid of their back office, including the registry, and find someone who could take it off their hands. The problem is you end up with that system, and someone’s got to take it on board and someone’s got to try to leverage it and make something happen out of it. And I think the big problem was there was no-one around, there were no systems for a start that could run on a third-party sort of basis, and at the same time, no-one was prepared to offer it. The custodians were looking at it, but it wasn’t really something that they wanted to do.
They were only going to do it because, you know, the managers didn’t want to be doing it themselves. So I think that’s part of the problem, was that there was this whole industry grew up with people doing it themselves because there was no alternative. Chris Bain: I agree 100 per cent. Never put down to malice or incompetence what you can just put down to gradual history. This business is maturing still. Computershare would still say the fund managers aren’t especially run by accountants, and the accountants are still run by people who think that the magic of investing, the capacity to add value is really important. And sometimes I think those people have a different business mind-set to what hard-nosed managers did. Michael Bailey: Are we able to hear from the managers that are here today about your own unit registry, whether you’re happy with what you’ve got, and could it be done more efficiently?
Mark Pratt: For an investment manager, I guess if you’re not one of the big four domestics who have a different distribution model than many others, it’s a question of what is your delivery mechanism to the end client and what’s it cost you? To the point you made, Bryan, I agree the choices available to many managers in the market are very limited. You know, the systems that are probably at the higher end are quite tightly controlled by people who spend a lot of time and money on them. It doesn’t leave you a lot of choice when you’re not one of those. One of the things we have been looking at is, are there systems available offshore that really do have the capabilities that you really need, because of the size of the offshore markets? But it’s a balance for those people as much as it is for us in terms of the business case, because there’s a lot of work that has to be done around the tax regime, particularly for the Australian market.
And they themselves would do the numbers and work out, well, who am I going to sell this to at the end of the day? That is one of the biggest challenges for these guys, because I actually think there’s a clear demand from many managers in the market for something that’s a bit more upscale, more sophisticated. But who’s going to spend the dollars to actually develop it and then build it, and run the risk that no-one here’s going to buy it because there’s something else available? And that’s where it is a struggle for us. You know, you’re a bit caught between investing in it yourself, which as an accountant, I look at it and say, Well, that’s going to be hard to make stack, versus hoping that you can find alternative service providers available that are going to start delivering what you need.
At Australian Unity we went through this exercise about four years ago. We had a system that we just knew wouldn’t be able to support what we wanted to do, so we did a complete review and replacement of our unit registry in 2005. Are we happy with where we are? I think we are. We do all our administration in-house, but we certainly use outsource technology. At that time we – maybe contrary to the view of fund managers that Chris put forward – certainly sat back and had a look at what we felt what our customers wanted at that point, and where we wanted to compete going forward. We made a choice that we wanted our clients to buy from us on investment performance – in a registry sense it gave us great clarity and simplicity in what we needed to deliver. in a registry perspective.
Pretty much straight managed funds, managed unit trusts. We deviated from that in small respects along the way, but not very much. And I think that’s been very important for us in being able to continue to manage the efficiency side of our business – we’ve got about 40 per cent less admin staff now than we had four or five years ago, and we’re five times the size. We also have our customers having much greater ability to access stuff over the web, stuff that’s fully interfaced, all those sort of things. So, yeah, we’re happy with where we are. We did have a chat to a couple of the custodians at that point, to their credit they just said, ‘Look, it just isn’t worth the investment for us to get it to where you need it to be.’ So it made it a quite simple answer for us. Because I also there is a risk premium in outsourcing something which is core to your value proposition. We’re a largely intermediated business with advisors.
How they interact with us, how they talk to us, the messages they get from us, are crucial in a retail sense. We felt that there would always be a risk if we fragmented that service proposition, and we never really wanted to give away the people answering the phone. And I’m not certain that we, as a fund manager with a larger retail presence, ever will want to do that. To me that only introduces an additional operational client service risk, that we couldn’t find a value proposition in the market that made that worth our while. Michael Bailey: Any industry utility in unit registry would assume funds managers are always going to want to have that phone conversation with their investors, right? Jim Savage: I don’t think so. I come from a very boutique perspective. The important thing is your asset licencing requirements become more and more complex the more you do in-house. If you want to do unit pricing in-house, you’ve got to upgrade your ASIC licence.
You want to then become a responsible entity, you’ve got to upgrade your licence again, and you’ve got to keep a lot of money on the balance sheet. Bryan Gray: The big issue, and the reason that I’ve been an advocate over many years for a unit registry utility, is that there’s only a couple of ways you can get scale in this. One is you bundle it with all sorts of other things that you do as a custodian. I don’t think any custodians are sitting back there saying, ‘Hey, this is a real money-spinner, let’s get into the registry business because we can all make money out of it’. You can only offer it if you’re charging somewhere else – if you’re making money on custody or you’re making money on foreign exchange or other services that you can then bundle together to make the thing work. The other way you can do it is you can get scale out of doing it, like they’ve done in the US. You can get scale out of actually making it work as a stand-alone business, like the Boston Financial Data Services of this world, that have brought the scale to actually make it a viable business to operate on its own.
They’ve leveraged off their traditional share registry backgrounds, to say, ‘Well, hey, this makes a whole lot of sense; we’re doing it for companies, why don’t we now start doing it for unit trusts as well.’ Tim Worner: In Australia you’ve got four broad categories: you’ve got old retail, which is like the Perpetuals and BTs and that stuff; you’ve got institutional, which can be direct to institutional, to platforms, which is really B2B; you’ve got new retail, which is managers trying to connect up to the selfmanaged supermarket; and then you’ve got stuff like structured And you know what it’s like, people come through the door with ‘I got 2000 accounts, I’ve got a bit of that, a bit of that, a bit of this.’ And it’s very hard. Kay Sprague: We have a similar situation. Globally we’ve got very large systems, either in the US or in Europe. They support very large fund managers, they distribute products throughout Asia.
But in bringing the product to Australia or Asia – each country is quite small individually, and they all have either their own language or interests, here its capital gains tax. So how do you get that scale? Bryan Gray: You could lobby the government to try to simplify the tax environment we find ourselves in, because to me it would make a whole lot of sense if you could do something even on a regional basis, time zone-dependent, and support a huge customer base into Asia. You could actually make it work. But the problem is, we’re so different in the Australian market with the tax environment that we’re in, that no-one can make that work. Warwick Angus: It’s so different when you’re out there talking to clients who don’t have legacy issues. The path they take, versus the path taken by people who’ve got a legacy book. When you’re unencumbered, you take a path which is probably more reflective of the logical thing to do.
Bryan Gray: You’re absolutely right. There are those kind of industry issues that crop up. The last one was Y2K, where people said,’ We’ve got these systems; all of a sudden they’re going to be obsolete we believe, and we’re going to have to spend a whole lot of money to make them work’. Same thing at the moment we’re finding with introduction of TOFA and that sort of stuff, and that’s having an impact on people with accounting platforms, saying, ‘Do we really want to spend that money, or is this now the tech catalyst for us to find someone to do it for us?’ Warwick Angus: Is there an implied question there that there has to be an event to make this occur, or there’s sufficient pain and agony now that people will rally and finally get to an outcome? Mark Pratt: To be frank, if the consumer and government pressure that’s coming right at the moment isn’t enough, then I don’t really know what is.
I’m still not certain that straightthrough processing will come in my lifetime. Regardless of unit registry, the industry at the moment is struggling to find a consistent way to do the most basic function in the most efficient way – which is transfer funds instructions. We’ve had SwimEC, hub, we’ve got Swiftnet, you know, they’re the only three I know about and I’m sure there’s about four or five others. Yet if everybody was on one of those as a basic thing, then to be frank, I’m not certain whether your registry provider would be as much of an issue, because applications, redemptions, and moving money would be standardised. Greg Bright: I’m always concerned when people talk, as Bryan was earlier, about bundle pricing, because as the great John Bowers used to say, when he was running Russell, “The history of all of mankind is moving towards specialisation”. So when you look at bundling and you say you’ve got the low-margin business, maybe core custody, the no-margin business which is unit registry, and they’re being subsided by something else – I always think, well, that can’t be a permanent thing. You’ve got to make every component stand on its own. Bryan Gray: Yeah, I would agree with you.
We’ve had a couple of clients who’ve come back to us and said, ‘Look, we don’t want anything subsidising anything else, right; so come back and give us a price.’ And so you go back and say, ‘Here’s how much it’s going to cost you now if we’re doing your accounting, because we’ve got six people sitting in the office there doing it. So here’s what it’s going to cost you. And they flip out. They say, ‘Okay, thanks very much. Go back to the old way of doing it.’ Tim Worner: When we’re referring to unit trusts here, are we talking about superannuation member equity as well? Because it’s important with unit registry, people wax and wane between throwing super in and super out. And, you know, it’s a big difference. Because unit trusts, the scale’s diminishing, it’s going away and it’s going to continue to diminish in terms of volume of trades and number of investor accounts. But superannuation member record keeping, it’s outsourced now.
We have big industrial strength record keepers. Kay Sprague: Unit registry at its core is the same for each country. Australia unfortunately has the complexity of capital gains tax, which is probably the expensive bit to actually develop. But for most countries, what I see is a number of managers that are across the region, global managers, saying that in, say, 10 countries they want to have one offering, one system, the one set of statements for each country. And they think that that shouldn’t be too difficult to achieve, with perhaps some customisation of language in each of the countries. So that really should be a great offering. The extra complexity becomes Australia for capital gains tax. If that capital gains tax wasn’t there, then it wouldn’t be so difficult, I think, for Australia.
If we could make our products more regional, and start selling them offshore, and accepting off-shore product in, we can take that next step of scaling up unit registry. But at the moment, from a global perspective, we’re just seen as different. Jeremy Don: In some ways, Australia suffers from the fact that it’s quite sophisticated in the way it operates. The whole principle of having investor-directed investment, where they can plug into the internet, choose what they want to do, is something that’s a bit beyond most of our region. Kay Sprague: I think that Australia is, as you say, ahead or at least at that leading edge. It’s just that it’s doing it with separate systems in separate places, and we’re developing it multiple times.
It’s inefficient. Warwick Angus: Computershare would say it’s easier to move from a complex market into a simple market, and therefore don’t think of Australia as an end destination to bring things in, but think of it as somewhere that can export. I don’t think that Asian markets will follow exactly the same trajectory that Australia does. Indeed they’ve already jumped a couple of steps. But the interaction, let me say to all of you around the room, the interaction between the fund manager, the platform, and what’s going on in the advisor’s front office, the financial advisor – we call them advisor desktop systems here; I’m talking about the XPLANs and Coins of the world – is going to be a very, very important part of how managed funds are administered, and you’re going to need a very particular kind of capability to deal with that. And we’re probably better set in this market to build that and export it than we are to do it the other way around. Chris Bain: Funds managers are price takers in this market, and something’s going to have to give somewhere.
If you’ve got someone saying, ‘I’ll give you $200 million; you’ll manage it for me for 25 basis points’, and you then find that the administration of those funds is costing you half of the cost of running it, you’re going to have to do something about it. So let me put this question on the table. Is the record keeping and associated functionality – and I’m talking about the workflow and the client service, et cetera – is it done efficiently in this market? I challenge anybody to say it is. Can anyone say it is? Mark Pratt: I’m certainly not arguing that point, Chris. I think my point around that is, can we all do it? Absolutely. Should we? Sure. But in the end, though, to get it to a scale which works, where will the money come from in a market where people don’t have as much, there are tighter focuses on liquidity and capital ratios, and much tighter views on risk and what it means.
Chris Bain: Risk and compliance? Mark Pratt: Yeah, all of those types of things. Look, we’ve got the functionality to do SwiftNet. But it’s absolutely irrelevant to me to do it until Macquarie Wrap, BT, MLC and all of the big wraps do it, because to turn it on and test it, it’s just uneconomic. And that’s the thing that I really wonder about. And I’m happy if there’s a way around it, then all good, because we’ll be knocking at the door if there’s a cheaper, more effective way to do it. Chris Bain: Change isn’t going to happen on its own. We can start to speculate on what Warwick talks about, the capacity to borrow scale from your existing businesses, e.g., share registry, to invest further in a way that allows you to expand your market beyond the Australian shore, out of the more complex into a less complex set of markets. We all know and understand each one of them’s different, but some of them are very large indeed. At its peak, James Wong, who’s ex-HSBC and runs our Hong Kong office, told us that some of the Chinese funds were signing up 500,000 new investors a day.
Chris Brideson: This industry doesn’t face the fact it’s inefficient, it’s not been acknowledged, and then it doesn’t go beyond that to say how can we improve our efficiency in innovative ways. I contrast it with the way the banking industry has taken on this task. Banks had a cost to income ratio of around 60 per cent in the mid-90s, and they’re now targeting towards 40 per cent. And this is because this has become a strategic imperative, to actually drive operating efficiency in that industry sector. Chris Bain: Absolutely. But one of the key things that happened there was, the cross-subsidisation from the home mortgage to the business account or whatever it was, had to stop, and let’s ask again about the structure of pricing per unit registry. This is an activitybased business, and it’s investment in technology that creates the straightthrough processing or versions of smart forms, the much more efficient collection and processing of information.
Those things have to happen before you can start to offer efficiency. This is where this conversation has to go. Bryan Gray: That’s a good point. One of the things that we’ve said in the last 12 months is managers, particularly larger established managers, have got pretty high fixed costs in an environment where their revenues have taken a dive. They need to try and convert as much of those costs to variable as they possibly can. Registry might not be a big part of what they do, but it’s still 15 people sitting in the office there, getting salaries. Managers have been knocking on our doors for the last six months or so, saying, ‘Can we revisit that outsourcing conversation we had two or three years ago?’ Sam Watkins: I grew up in the BT school of seeing how they run business.
I was then at Macquarie for quite some time before starting over at Credit Suisse. I’ve always been in the structured products space, and prior to moving into expanding our product set to take over-the-counter style product offerings to clients, a very large part of what I did was listed investment products. I see that platforms are going to become an even dominant source in Australia from my perspective as a customer. My clients are private banks, financial planners, stock brokers predominantly, and we need to buy space on the platform, or alternately we are paying them a level of commissions for something which is off platform. With the reviews that are happening, and all the outcomes of that, which will of course be most likely a reduction in any of those commissions paid, I expect what the outcome will be is that if it’s not on platform, we’re not dealing with the stock. So we have two choices available to us.
One, we approach each individual platform of the customer who’s important to us, and we pay their various fees to get on the platform, and we send various information to them one by one. Or alternately we support the product that the Stock Exchange has underway, the AQUA Project, which some of you might not be aware of. AQUA is basically a bulletin board style of listing environment, so not a tradeable environment – a bulletin board style of listing that communicates most of, if not all of, that similar sort of information out to various platforms. Now, by virtue of being on the Exchange, you’re automatically registered onto more platforms, theoretically. This is not been switched on at this stage. My understanding is the Exchange is still working with different platforms to get commitment from them to be, I guess, picking up the signals that are being sent through.
But the important thing from our perspective is that we don’t want to go out and establish and pay fees to every single platform. We need a more efficient way of doing it. The most efficient way I’ve seen in my experience I take from my instalment warrants background, where we outsource the registry to Computershare, we managed our own inbound phone calls from advisors by having an advisor line and contact point; all of the individual retail clients went straight to Computershare for copies of statements, changes of addresses, and those sorts of questions. But by virtue of being on the Exchange, we got scale. It was efficient, we had CHESS settlement and all those sorts of things, that I think allowed us to reduce our costs and increase our distribution. And that’s the way I probably do see it going from our perspective. I might just make a point that some of the things that we would look to list, and some of the things that exist in an off-market sense, are not necessarily just unit trusts.
And one of the things that steers us away from unit trusts is actually the cost of administering the unit trusts. So we end up putting a lot of product into deferred purchase agreements or various other sort of derivative-type products, but our methodology is still the same in that we outsource the registry, we have a direct interface with the advisor, we approach the platforms to get those on platforms. So at the end of the day I see some similarity in that scenario for where unit trust administration will go. Chris Bain: Computershare’s big point about technology is that the economics needs to make sense. We’ve done some work on what the drivers for outsourcing are, and we’d say that the future is quite bright for [some], insofar as in the end, as fund managers really, truly start to better understand their economics, they’re just going to have to say, ‘I’ve got to do this better, I’ve got to do it more efficiently’.
The risk for this market is that there won’t be sufficient scale to get the kind of quality solutions that you’re getting in Europe, that you’ve been getting in the United States for a long time and that are not yet available in Asia. The Computershare argument would be, ‘you’ve got to be able to borrow this scale, and you’ve got to be able to expand beyond your own boundaries in order to make this a sensible proposition. But certainly our work says that it can be a sensible proposition’. Bryan Gray: People don’t know what they’re missing out on. Where I find it is when you get a foreign fund manager, US fund manager, comes down here that’s launching a product. They say ‘We’re going to have to have our distributions done on day one, we want a 14 hour turnaround to get applications back. Is that reasonable in the Australian market?’ And our response is,’ You know what? Three weeks is probably alright.’ And they can’t understand that, you know, but that’s it. In the US market, if you don’t get your statement back the same day, you’d be on the phone …
Here people go, ‘If I get it in a week and a half, that’s probably fine’. Warwick Angus: Greg, to your point on specialisation, if you think back to unit registry, it’s a bundling of a whole lot of disparate services, really. It’s transaction execution, it’s web development, it’s client reporting. We think that the DIY super boom might be indicating we’re going to see more unbundling, and that really investors, they don’t know what a platform is, let alone what unit registry is. They want efficient administration of direct assets, and managed funds. And they’ll be looking – we might see firms that are good at client reporting, firms that are good at web development, firms that are good at transaction execution. Bryan Gray: All of the [Australian Custodial Services Association] members need to view unit registry as an activity that’s not a competitive advantage, and I don’t think we’re quite there yet with that, and I think that’s part of the problem, because there isn’t anything else in the marketplace. And because of the bundled buy behaviours at the moment between custody and administration and registry, there’s obviously going to be custodians who say, ‘Well, hey, I’ve got a capability and I can bundle it up and sell it; if you don’t have one, then I’m going to win business that you don’t win’.
But at the end of the day, what it’s going to drive everyone to do is to build inefficient registry operations right across the market. There’s enough inefficient registry operations in fund manager shops without now having them in custodian shops. That’s what we’ve got to get around. If the members of ACSA can come to the view that, ‘Let’s all compete with each other on the things that we do well, and let’s try to buy services from someone on the things that we don’t do well’, that’s really very much a scale capability, like we do with sub-custody and other things around the world, then wouldn’t that be far more efficient? Chris Bain: It’s important to have on the table, that it is a common thing for unit registry to be a separately offered service in Europe and in the United States.
It is not in this country, and people still think, ‘I don’t really want to have a couple of relationships with different people when I’m doing my admin’. But I think the custodians, without putting any of them on the spot, are readily accepting that the unit registry pricing gets bundled up. And many of them, I would think, would have some trouble telling you precisely what those costs are. And one of the things that happens in a service company like Computershare, is we understand activity-based costing very well. And when we talk about offering a proposition we’ve got a very clear idea about what those costs ar. It costs X to do it manually; it costs you X divided by 15 to do it on a fully automated basis. But to automate you require standardisation. For standardisation, you have to have scale.