Managed accounts provider ramps up tech strategy

An ASX-listed platform provider is overhauling the technology behind its managed accounts offering.

The clients and advisers using Managed Accounts Holdings' (MGP) managed discretionary account solution will be the first to benefit from the technology upgrade, due to be rolled out in late October.

MGP flagged the transformation following its merger with Linear Financial Holdings in November 2017. It purchased 100% of Linear shares for $42.5 million.

The combined entities administer more than $11 billion in funds - about $4 billion of which sits in managed accounts.

MGP chief executive David Heather said after the merger, the company sought options available to enable it to deliver competitive front-end technology.

"With the merged entity having a core technology development capability, it was apparent that an in-house approach to front end development is the preferred approach for the future," he said.

Using Application Programming Interfaces (APIs), existing databases and back-end software will remain in place to create a front-end across existing platforms. This is for the user interface and to capture client instructions, he explained.

"This will provide flexibility to be able to add or reduce databases and/or transaction back ends as circumstances change such as for future acquisitions. This will also have the benefit of enabling advisers and clients to see tangible benefits quickly," Heather added.

MGP's latest FY18 results show the acquisition of Linear dragged the group's earnings into the red.

While funds under administration and revenue shot up thanks to the merger, MGP reported a $2.5 million loss after making a profit of $700,000 in FY17.

The loss was driven by operating expenses mainly from employee remuneration ($6.8m), acquisition costs ($1.26m) and an asset write off ($1.93m) relating to discontinued software.

Read more: MGPDavid HeatherLinear Financial HoldingsManaged Accounts Holdings
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