Global giant SS&C takes fight to MUFG after landing Insignia

Through its novel deal with Insignia, US software and admin giant SS&C Technologies has big plans to become a major player in the Australian superannuation market.

SS&C founder and global chair Bill Stone and Insignia Financial chief Scott Hartley in Sydney. Picture: John Feder

Wall Street funds administration giant SS&C Technologies is capitalising on its novel deal with takeover target Insignia Financial to sign up more Australian superannuation clients, which it claims are poorly serviced by their current providers.

SS&C founder and CEO Bill Stone, who was in Sydney last week, said the firm intended to invest heavily to become a major player, taking advantage of the horror run suffered by under-fire administrator MUFG, which used to be known as Link Group.

The Nasdaq-listed admin specialist, with a market capitalisation of $US21.5bn ($34bn), manages admin for Team Super (formerly Mine Super) and in December inked a deal with ASX-listed Insignia to provide admin services for the wealth giant’s Master Trust business.

Since announcing the deal, SS&C has received “many” inquiries from super funds interested in its admin services, Mr Stone said.

“The world-class super system that you have built in Australia now needs to have world-class support throughout,” he said. “You want to have things done the same way every day that are as bulletproof as possible and SS&C has built its business on being able to do that for large, sophisticated organisations that demand very tight accuracy and very tight member engagement.”

SS&C, founded by Mr Stone in 1986 and headquartered in Connecticut, has more than 22,000 clients and $US2 trillion in assets under administration. Clients include financial heavyweights Vanguard, JP Morgan and Goldman Sachs. The Asia-Pacific currently accounts for just 4 per cent of its client base.

“We have a pretty solid reputation. We’re not perfect, but if there’s a problem we bring the cavalry,” Mr Stone said.

“We’re the No.1 hedge fund administrator, No.1 one private equity administrator and the No.1 mutual fund transfer agent in the world. This is just another area of financial services where you’re dealing with transactions. It’s accounting, and we can do it fast and accurately.”

With $180bn in funds under management, Insignia will be a flagship client in Australia, he added.

Insignia in December announced plans to outsource admin services for its Master Trust business to SS&C but crucially will keep its complaints and claims handling in-house, as it looks to cut costs while avoiding the same fate as industry funds marred by reputational damage over woeful claims processing.

Since then, the wealth manager has had a trio of suitors approach it with takeover offers, with limited due diligence granted. On Friday, the 180-year-old wealth firm announced it had granted exclusivity deeds to two of the suitors – Bain Capital and CC Capital – after they lifted their competing bids to $5 a share. Regardless of the takeover outcome, the outsourcing of admin services is set to go ahead, with a binding agreement already signed between SS&C and Insignia.

As part of the deal, 1400 of Insignia’s customer service, technology and admin staff will move across to SS&C in a move designed to ease the transition.

“This is a lift-and-shift of all of our people and capability across to SS&C, for them to then transform that to contemporary technology that is fit for purpose for the industry going forward,” Mr Hartley said, as he pointed to government and regulatory interest in the deal. “The (super) industry is very poorly served today and there has been very high-level interest in what we decided to do with this arrangement with SS&C. There’s been interest from government and there’s obviously been a lot of interest from regulators.

“We feel like we’ve landed on a really good solution, and one that brings SS&C to the Australian market in a much bigger way, with the capabilities that we hand over to them to create a really strong platform in the Australian market for them to grow their business.

SS&C’s AI technology and “digital workers” – automated bots – will do the heavy lifting on repetitive mundane tasks, leaving the 1400-strong Australian workforce to do higher-level tasks.

SS&C is expanding its Australian focus right as the industry reels from member service scandals, including delays in death and disability claims processing, insurance blunders and technology outages. Admin provider MUFG has been at the centre of the scandals engulfing the $4 trillion super sector. It provides back-office functions for some of the biggest funds around the country, serving about 40 per cent of the market.

Originally published as Global giant SS&C takes fight to MUFG after landing Insignia