US- JP Morgan Chase bank is boosting its management and monitoring of trading costs by acquiring US company Plexus Group and signing an alliance with Inalytics, the UK-based cost analysis provider.
Plexus provides transaction cost analysis, trade research and consulting services for investment managers, pension plan sponsors and brokerage firms, and will be the wholly owned subsidiary operating under JP Morgan Investor Services.
Integration is to begin immediately with the two parties working to a two-year plan to enhance Plexus’ benchmarking, data access and customised reporting capabilities.
In a separate alliance, Inalytics, which offers comprehensive transaction cost analysis to pension funds and asset managers in the UK, is to provide distribution and servicing support for the Plexus products across Europe.
Rick di Mascio, chief executive of Inalytics explains the benefits of the partnership: “transaction costs are an important cost to pension funds especially in a bear market and must be properly managed. They are very large, and, for the most part, are not transparent. This alliance will allow pension funds to measure costs accurately.”
In January Inalytics estimated that a typical pension fund incurs transaction costs of around one percent per annum, which translates to an annual £4bn (e6.27bn) for the UK industry.
For JP Morgan the fusion of the three companies will provide its UK and European fund manager and pension fund clients with one transaction cost analysis platform.
Last year the Myners report highlighted the issue of commissions and urged trustees to ensure transaction costs are properly managed. Inalytics has been one company pushing for such reforms.
In January Inalytics linked up with Euraplan, the provider of pension fund monitoring and accounting software, to supply a system capturing both the implicit and explicit elements of transaction costs, the former of which are often overlooked.