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Inalytics/Euraplan deal boosts trade cost analysis

UK- Pension funds will have easier access to trading cost analysis following a marketing link up between the transaction cost measurement company Inalytics and Euraplan, the provider of pension fund monitoring and accounting software. Under the deal, Inalytics’ TVA, a system that captures both the implicit and explicit element of transaction costs, will be marketed to Euraplan’s 100 clients.

Euraplan chief executive Roger Forder says customers have recently been asking for help with controlling performance and compliance. “This TVA service to analyse their transaction costs using validated data from within our software is our first response to this request,” he says.

At present, many pension funds concentrate on explicit costs- commission and tax- whose reporting on contract notes make them easy to monitor. Implicit costs like spreads, market impact and timing can be equally significant but are often overlooked. Inalytics estimates that a typical pension fund incurs transaction costs of around one percent per annum, a figure that translates into an annual £4bn for the UK industry alone.

Says Rick Di Mascio, founder and chief executive of Inalytics: “at a time when absolute returns for pension funds are low, the impact of transaction costs on the total performance of the fund is significant. It is a commercial imperative for trustees to be able to measure and monitor such costs by fund manager and by broker. We are delighted that this agreement with Euraplan will expedite the introduction of TVA to the industry.”

The deal comes at a time when commissions and trading costs are under close scrutiny following the publication last year of a report by Gartmore chairman Paul Myners. Myners highlighted the issue of commissions and urged trustees to ensure transaction costs are properly managed.

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