Jigsaw unfinished
National Mutual decides not to plug in its administration service.
Sunday, June 21st 1998, 12:00AM
National Mutual has decided to pull the plug on its backroom administration system, Jigsaw, because of poor fund flows into investment products.General manager Ross McEwan says the system has been already to go for some time, however the market conditions are not right.
"I could push the button today," he says, "but I don't believe it's a viable proposition in this market."
He says an administration system needs to have about $200 million under management in its first 18 months of operation and probably needs $500 million in three to five years to make it sustainable.
Currently money is just trickling into investment funds with the research houses calculating only $4 million of new money was invested in managed funds in the first quarter of this year.
The majority of this money has gone into income funds, such as mortgage trusts, and these have lower margins than growth funds.
Jigsaw is based on the Summit administration service which has been successfully operating in Australia for the past two years.
It consolidates and reports on an individual's direct investments, which may be held through a sharebroker, and the investor's holdings in selected managed funds. Advisers link to the service via the Internet.
Jigsaw was to be targeted at financial advisers who want to provide their clients with active management of their investment portfolio while reducing management hassles.
It was specifically geared to those advisers who have clients with more than $25,000 to invest and can contribute at least $500 a month.
McEwan says Jigsaw has been postponed rather than cancelled.
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