Hargreave Hale provides stockbroking, investment management and fund management services to private investors, trusts, companies and charities across the UK. A crucial part of its business is executing trades on behalf of its clients. Hargreave Hale had been using an older version of Dion's front office system, plus its legacy middle office solution, Trader, to execute trades electronically, but only to a very limited extent: before the project , only 10 percent of the firm's trades were executed electronically.
The other 90 per cent were executed over the phone, with the responsible front-office trader manually recording trade details on a deal slip. These deal slips were then faxed to another location, where the trades were then entered (again, manually) into the firm's back office.
There were down sides to this approach. For a start, it created needless work via the duplicate keying of orders. It also created unnecessary risk as information was passed manually through multiple people in multiple locations. This increased the chance of errors being made, and thus reversal rates. It also put constraints on the productivity and scalability of Hargreave Hale's business (i.e. the number of clients a manager could service with the same time and effort). Before the start of the project, Hargreave Hale's best managers had reached full capacity. They were not able to manage any new clients.
In order to remove these risks and barriers to growth, Hargreave Hale set an objective of executing 80 percent of orders electronically by the end of January 2015. To achieve this, it implemented a more advanced, functionally richer version of Dion's Investment Management solution across the entire front office (as opposed to the limited previous use). As well as driving electronic execution Hargreave Hale also wanted the front-office to make greater use of Dion's Investment Management solutions wider benefits, such as its benchmarking, mobile functionality, authorising, modelling, vetting controls and risk reporting functions.
From 10% to 80%, Dion's award-winning wealth management platform leads to an 800% increase in electronic trading, and a subsequent AUM growth spurt, for UK investment manager Hargreave Hale!
Dion's Investment Management solution is a functionally-rich front-office application that allows users to execute trades electronically and can easily route orders to trading systems & fund platforms including Fidessa, Co-Funds and Calastone. It is also designed to improve investment decision-making and execution for wealth managers, family offices, stockbrokers and fund managers.
It enhances asset allocation and rebalancing, and allows firms to communicate more effectively with clients. Authorisation and vetting controls as well as audit trails and risk reporting allow firms to reduce the cost of compliance while achieving high levels of straight through processing.
The solution supports mobile and online wealth management services, allowing Investment Managers to be efficient outside the office and giving clients and IFAs access to their investment information at any time. It can integrate with proprietary and third party systems, including CRM applications, document warehouses, trading plat forms and investment reporting systems. Its tools and interface are fully customisable at both the firm and individual level, and can display information and data feeds in the user's chosen format.
Procedures & Controls
The solution was delivered over a five month time frame with a hard go-live deadline of 3rd November 2014. The deadline was tight and immovable as Hargreave Hale had planned to open a large amount of new branches across the country, and wanted the systems ready for the new teams to train on (rather than training them on the old system and then having to retrain). To begin with, requirements were agreed and documented. Implementation proceeded from there, led by Dion's team who were in daily contact with the client. Dion has an 'agile', iterative approach to the implementation and development process. As new functions were developed, they were demonstrated to the client, who provided real-time feedback. This allowed for changes to be made more efficiently, on a rolling basis.
Thanks in part to these procedures and controls, the implementation went live by the agreed deadline, and came in under budget. The project was initiated on the client side by Will Searle, Hargreave Hale's 'front office champion'. The implementation itself was largely overseen by Stuart Brookes and Lee Finlayson, Joint Managing Directors.
The Dion project & development team held daily meetings in its Leicester office to review progress and keep the project on track. There was regular interaction with the client through two channels: a regular project governance call, which was conducted at the senior level and covered the bigger picture, and continual daily interaction between Dion and Hargreave Hale's respective project managers regarding the day-to-day details.
In terms of controls, Dion uses Jira and a Kanban methodology. Jira is a globally used browser-based call logging system. Whenever the development team is working on a change or fix, everything is recorded within the system. The information includes a label, specifying a delivery date as well as relevant background information visible to all stakeholders. The client also has access to the system, allowing for mutual oversight and transparency right down to the smallest tasks.
Thanks to the successful implementation, Hargreave Hale has achieved against its target for switching over to electronic trading (80 per cent of trades by the end of January 2015).
Since the project's start, the firm has been able to increase its assets under management to over £5 billion. Over the past 18 months, the number of clients on its system has increased from around 16,400 to 20,500. This growth has been reflected in a series of new hires and office openings around the country.
Hargreave Hale's management have attested to the huge impact the implementation has made on their business and the value they have already received both from the product and the entire project. It has transformed processes from front office to back, and made a large difference to what they do, and most importantly what they can do in future.
Both the implementation and the results already achieved have exceeded our expectations. Inefficiencies in our front office were the company's number one roadblock as they prevented us from taking on new business. This blockage has now been removed and has aided our recent growth spurt, and we fully expect to hit the target of 80 per cent of trades being electronic by the end of January. "
Joint Managing Director | Hargreave Hale
This fundamental benefit aside, the system is easy and intuitive to use, particularly in that it can be wholly customised to suit the needs of the individual user. Whereas rival systems offer only one fixed view of the data, with little room for manoeuvre, Dion's Investment Management Solution allows our users to view and analyse information in anyway they want. We are also seeing the benefits of its straight-through processing and modelling capabilities, as well as the sheer level of compliance and audit controls that come built in. "
Joint Managing Director | Hargreave Hale