How Manulife Securities-Fidelity deal signals a larger trend

A technology deal between Manulife Securities and Fidelity Clearing Canada is part of a growing trend toward back-office systems that can support multiple dealer types, a wealth management software executive said.

Manulife Securities has agreed to adopt Fidelity Clearing Canada’s (FCC) uniFide digital and back-office tools, the firms announced last week.

“It’s big news for Manulife,” said Sam Webster, president of software vendor Portfolio Aid Inc., which is also a vendor to Manulife. UniFide “will help harmonize the systems or processes” that Manulife Securities independent advisors use, he said.

The deal is part of a trend in which large firms are “considering back-office providers” that can support both their mutual fund and securities business “just because it’s easier to manage it,” Webster said.

FCC was already providing Manulife with clearing and custody for derivatives and non-North American securities, said Scott MacKenzie, president of FCC. “This announcement is about extending the service across all asset classes and providing more direct technology capabilities to [Manulife’s] end advisors.”

Features of uniFide include integrated online account opening, workflow automation and live request tracking.

Soon, advisors will be able to “actually see what’s happening” with a service request “rather than seeing it go into a black box,” said Leo Zerilli, head of wealth and asset management, Canada, with Manulife Investment Management. “It will help our advisors become much more efficient in the way that they run their practices [and in] the way they deal with their clients.”

Other recently added FCC clients include Richardson Wealth Ltd., which converted to uniFide at the beginning of 2023. Kish Kapoor, CEO of parent company RF Capital Inc., said during the firm’s Q4 earnings call that the conversion came with “extraordinary challenges” and that the 8% of accounts affected “are causing us and our advisors, in particular, significant friction.”

Kapoor attributed the problems to technology issues overall, data transfer from the previous system to the new, and user training and experience. RF Capital’s Q4 earnings release, however, said such challenges “are normal with a conversion of this size” and that the deal with FCC gives Richardson Wealth “access to the scale, expertise and technology required” to serve advisors and clients.

“We’ve converted small, medium and pretty significantly large businesses and in every instance, we’ve converted data and ensured clients go live with the operating environment that meets the requirements,” MacKenzie said. “This change can be a challenge. Both Fidelity and our clients invest in learning from change management experiences: How do we do better training? How do we simplify the systems? How do we document better?

“With every single conversion, we go through a process of reflection and look for those areas to improve.”