Almost 80% of Australian-based superannuation funds and asset managers would consider using an outsourced trading solution to assist with end-to-end trade execution and middle office needs, a Northern Trust survey shows.
More than 80% of respondents also reported an increase in overall operating costs, with three-quarters identifying regulatory compliance or meeting technology and staff expenses as the key reasons.
The firm polled approximately 100 delegates from Australian superannuation funds and asset managers with more than US$1.5 trillion in assets under management.
Gary Paulin, global head of integrated trading solutions at Northern Trust Capital Markets, said: “Getting to grips with costs is a critical consideration for both asset managers and superannuation funds who are considering insourcing. The costs and risks associated with building and running a trading desk are significant. Regulators, clients and market participants are all demanding more information, greater detail, and stringent oversight and monitoring.”
Angelo Calvitto, country executive for Australia at Northern Trust, said: “Superannuation funds and asset managers must work around a growing raft of global, regional and local regulation. The increasing risk of non-compliance with new regulatory obligations and complexity in achieving best-execution calls for a robust compliance and regulatory framework.”
Calvitto added: “An outsourced partner for trading and execution can provide significant value by allowing funds to insource value and outsource complexity.”
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