Calastone is the only venue where the global fund industry can meet to send and receive fund order messages, irrespective of their size, geographic location, preferred messaging protocol or technology. Whatever the preferred communication method of each participant, Calastone’s transaction network standardises all messages to the Calastone ISO 20022 format, enabling the industry to become fully automated throughout the trading lifecycle.

FIGARO is JHC’s market-leading product solution for the stockbroking, wealth management and platform provider communities. FIGARO provides a cost-effective, flexible and fully integrated core system solution providing operational efficiency through integration, and scalability for businesses as they grow.

By connecting with Calastone, JHC continues to develop FIGARO to provide new and improved functionality and performance for clients. FIGARO enables fully automated straight through processing (STP) to Cofunds, the leading funds custodian.

Joining the Calastone network is simple and does not require additional costly technology. Single point of entry to the market via Calastone is seamless and industry developments, such as the movement away from ISO 15022 messaging to the ISO 20022 standard, are easily accommodated by the network, regardless of incumbent infrastructures.

Peter Murphy, Head of FIGARO Product Development at JHC said: “FIGARO is a truly market-leading solution, which allows our clients to remain competitive in their market and protect their investment in technology. FIGARO is a fully integrated STP solution and is unrivalled in its depth and richness of functionality and process automation. Leading stock broking and wealth management firms deploy FIGARO as their core integrated front to back solution for equity and funds trading. By joining the Calastone network, we are enabling full automation which reduces risk and cost for our clients, as well as speeding up the transaction process.”

Commenting on the announcement, Dan Llewellyn, Managing Director of European Business Development at Calastone, said: “We are delighted to complete our project with JHC so easily and in such a short space of time. Calastone is a demand-driven organisation and we have been asked by numerous clients to connect to JHC. We look forward to welcoming all FIGARO users onto Calastone over the next few months. In particular, we anticipate significant demand for the daily reconciliations service which can provide group 1 and group 2 splits as well as daily transaction reporting.”

JHC is continually investing in the development and enhancement of FIGARO to provide new and improved functionality and performance.  FIGARO is a truly market-leading solution, which allows our clients to remain competitive in their market and protect their investment in technology.  The automated interface with Cofunds further enhances the FIGARO offering, and provides time and cost savings for clients in the handling of funds transactions within their client portfolios.  FIGARO is a fully integrated STP solution and is unrivalled in its depth and richness of functionality and process automation.  Leading stock broking and wealth management firms deploy FIGARO as their core integrated front to back solution for equity and funds trading.

Peter Murphy, Head of Figaro Product Development says: “The ability to be able to offer direct messaging links to Cofunds is great news to our clients as it gives them immediate access to an extensive range of funds available in the UK, as well as saving our clients time and money.  We are also pleased to support our clients who have introduced automated portfolio management, to create rebalancing with straight through processing for both equity and funds trading”

Matthew Ferman, Head of Institutional Product Development at Cofunds said: “A large number of our existing and prospective client base use the Figaro system, which is why we’ve identified this as a key strategic partnership to offer straight through processing. We’ve developed seamless data integration, providing Figaro users with an ‘out of the box’ solution to their fund administration problems.

The JHC Product Director and Managing Partner for Newcastle, Peter Murphy said, “JHC has had a presence in the North East since 1998 and we are pleased to be able to make Newcastle a key focus of our expansion plans. This move shows our commitment to the area and the quality of the available workforce.  This is a substantial number of positions being created by a well-respected international software company, whose solutions are used by over 30 clients.”

For more particulars of the challenge Andrew will be undertaking and full details of the cause he is doing it all for, please visit his page on the Charles Stanley website by clicking here.

JHC’s Figaro was nominated in several categories and was the winner of the “Best Retail Settlement System” award for a third consecutive year.

John Blackman, Managing Director of JHC said:

“To be nominated in so many categories and for Figaro to be so successful is testament to the comprehensive nature of our product and the high regard in which it is held.”

Commenting on the Awards, Stephen Pinner, Managing Director of Goodacre said:

“The importance of these Awards has increased significantly over the past few years. System providers to City firms only seem to attract attention when things go wrong. Without them however, business would grind to a halt. All investment companies now are absolutely dependent on technology. The role that system providers play should not be under estimated and these Awards highlight companies and individuals exceptional performance during the past year.

The nominated firms for the Awards have put in a great deal of work to meet the requirements of a very demanding customer base. All nominees are to be congratulated in reaching the GoodAccredited standard. The Award winners themselves have done exceptionally well for the judges to recognise the outstanding performance of their products and services.”

Stephen Pinner, Managing Director, Goodacre UK commented “We have received over 75 applications from companies keen to have their products considered for accreditation this year. We are delighted that this new standard is sought after as it will provide an easy way to identify those services valued by clients.”

John Blackman, Managing Director, JHC said “To be one of the first firms to receive this accreditation is further proof that FIGARO meets the high levels of expectancy required by our customers.  We believe that the GoodAccreditation standard is an integral standard that all suppliers in our area will want to attain and it’s pleasing to be amongst the first recipients

Having worked providing Figaro to the stockbroking and wealth management industry for 25 years, I am struck by the fact that platforms are nothing new.

When I first started working for stockbrokers they would typically be responsible for all of their clients’ wealth. The cash was invested in many different types of asset, all using different, mainly manual, methods. At the year end a junior in the front office (probably ex-army) would put together a report listing all the different holdings and plans and the client, Mrs Miggins, would receive a lovely letter bringing it all together.

Given that many of the assets contained within these products were equities, and that the broker would change his mind a few times during the year, there was a reasonable commission earned and the broker was happy to offer such a tailored service. There were other charges such as custody or management fees, but these would all be calculated before the year end and included on the annual statement.

Therefore a much smaller percentage of Mrs Miggins’ assets were held in products with hidden charges. The Retail Distribution Review (RDR) was not even so much as a glint in the regulator’s eye and wasn’t necessary anyway, as all the charges were on the statement.

Right from the beginning, JHC’s clients wanted to provide a complete service to their customers with a system that reduced the administration, by both consolidating all relevant assets in one place and linking to all the product providers.

This meant providing some key components:

1.     Consolidation of products either at the individual or family level. All of the reporting, performance calculation and exposure is calculated across groups rather than individually. This is simplest to visualise from a web point of view: A single login gives the customer an immediate and up-to-date view of all their positions, all grouped together in one place.

One of the principle benefits of product consolidation was clearly demonstrated when we began to produce single annual reports to each household, rather than weighing the postman down with a sackful of reports, each regarding a single stock. Oh, the joys of multiple ISAs!

2.     Crucially, all the accounts needed to be managed as a single relationship. This means that fees are levied across the group of accounts and posted to a designated account. Deposit interest is calculated on the consolidated balances, thereby giving the customer better rates. Client payments can provide regular sums to multiple beneficiaries, regardless of where the income is generated.

3.     Finally the firms need to agree wholesale rates with the product providers. This means either managing the cash and assets on a pooled basis or at least fooling the providers into thinking that you are doing so. An obvious example of this is pooling all the client money in to a single account that can then be split up to get the best rates, but equally important is to consolidate the fund holdings to negotiate better rates of trail – the heady days when the perils of RDR were way off.

For much of the 90s JHC worked at bringing all of these factors together.

There followed a period where customers began to “shop around”;  They were encouraged to use Independent Financial Advisors, as there was an underlying feeling that the traditional stockbroker was taking advantage. How naïve we were!

Some years ago an Australian software house came to visit JHC with an exciting new idea. The Australians, they said, were many years ahead of the British. (This was of course before we had beaten them in the Rugby World Cup and regained the Ashes.)

They wanted to explain to us the concept of a “platform”. After a couple of hours we realised that we were in danger of re-enacting the French Castle scene from Monty Python and the Holy Grail. They would ask me to offer our largest client this new platform solution and waiting to see the look on their faces when I said “Well, I’ll ask ‘im but I don’t think ‘e’ll be very keen… ‘E’s already got one.”

Even back then, JHC’s clients had already been offering consolidated cash, equity and unit trust accounts for many years. We just hadn’t realised that we had a platform until someone else called it that. JHC added automated unit trust trading and reconciliation to the Figaro system along with equities, gilts and overseas stocks and currency accounts early this century.

Initially, IFAs had direct relationships with the fund providers and used a stockbroker to buy only equities and gilts (although they would rarely recommend this course of action as they didn’t earn trail). The equities would sit in the broker’s nominee.

One of the things that has changed since then is that IFAs tend to want to hold their equities in an independent nominee rather than with a particular single broker. Additionally, they want to be able to use multiple providers for different products without facing the complication of many different relationships.

This is key because firms are typically valued based on the value of their assets under management (AUM) and this is far easier to calculate if all funds are all readily available in one place. As the market has got more competitive IFAs are also employing sales teams who are remunerated based on AUM targets – another reason to make it easily accessible.

This is where the IFA needs either a modern, sophisticated platform, or a broker using a system that will allow him to hold the stock in his own nominee.

It is perfectly reasonable for an IFA to use more than one firm for discretionary mandates but it does mean that there needs to be a consolidating system to bring it all together. This means that platform providers who can be product agnostic are attractive. This isn’t necessarily so good for Mrs Miggins as she will end up paying two levels of charges; one to the platform provider and one to the product provider, but at least under RDR she might become aware of this.

Another side effect of this is that the brokers end up having to connect to many different platforms to avoid the need to manually perform the updates each time they rebalance.

So we have come full circle, and platforms are once again back in fashion. When I started in stockbroking Mrs Miggins trusted her broker, gave him all her money and then hoped for the best. Then we were all told that IFAs were the way ahead as their independence meant that they would be fair and balanced – which they were, when they provided products which all paid the same rate of trail. Now we have RDR, and Mrs Miggins will once again be looking for a single place to house all of her assets.

The big question is this: Will she now be attracted to the fashionable new platforms? Or, with a nod to vintage chic, will she return to her broker who has been offering her platforms all along?

John Blackman is Managing Director of JHC LLP

From left to right: Neil Delmer, Lucy Campbell, Bill Johnson, David Duffy, Chris White, Steve Grindle, Tom Hutchinson and Andrew Sears. Donations can still be made at http://www.justgiving.com/JHC-Runs-Brum

FigaroWEB incorporates a content management system and site editor so that the appearance and branding can be easily managed.  This allows our clients to develop and deliver multiple websites from one application set, enabling considerable flexibility in how they provide web trading or enquiry services both internally and to end-clients.

Figaro’s web platform is aimed at all product types including discretionary, advisory and execution-only clients and may be tailored to present different users with the appropriate functionality.

FigaroWEB brings together all the core elements of on-line stockbroking to deliver a secure trading environment for clients.

FigaroWEB provides a consolidated client view, showing all assets including Stock, Shares, Pension, ISA, SIPP, Life Insurance and any other items. The system can be deployed quickly and easily and delivers the full range of functionality and information required, including:

Account Enquiry

• Real-time Valuations and Balances
• Statements and transaction history
• Access to contract notes, statements, valuation packs and reports

Customer Communication

• Secure Messaging
• Corporate Action information and response input for optional events

News and Research

• Stock search
• Integrated live (or 15 min delayed) price feed
• Link to on-line market data providers

Online Dealing Services

• Active Orders
• Buy / Sell / Raise / Invest functions
• Buy shares or invest money options
• Alerts – SMS and email
• Limit Order Processing
• Stock Baskets
• Fantasy Portfolios

Please contact JHC today to find out how we can help your organisation through our market-leading software solutions for stockbrokers.

At JHC we have invested a lot of time in examining and improving the Figaro development testing and release processes. New guidelines have been formulated on testing and test strategy. Training our developers on testing to the industry standard (ISTQB) has also been implemented, ensuring that quality is considered from the start of software production. To augment this, Project Methodology is being rolled out this year together with the associated training to all involved staff.

The involvement of our clients has been paramount. We have been able to improve the quality of our test environments by getting test data direct from the client base. Additionally by engaging our clients at an early stage of the development cycle by means of prototype testing, we believe that we have raised the confidence levels of our clients and this has led to a better perception of the requirements for our developers.

To confirm that we are on the right track, we have formal client feedback on software performance and JHC service levels. Using this feedback has enabled us to institute a process of measuring the quality of software releases, taken from the clients’ own views of the issues raised and comparing it to the size and amount of change in the software.

From this, we are seeing a marked trend of improving software quality for Figaro that enables us to provide a sound platform for future releases.