HP JDV and Sanford vie for clients

CLIENTS are shaping up to be the key to HP JDV’s move onto the register of rival WA broking technology player Sanford.

But just whose clients remains a big question, as both players lay claim to having the answers in the increasingly hot com-petition in stock broking technology out-sourcing, where both companies operate.

Last week it emerged HP JDV, the parent of Hartley Poynton, had built a stake of more than 3 per cent in Sanford.

HP JDV managing director Tim Moore refused to confirm the move or comment on the strategy behind such a position.

However, insiders have denied the move is aimed at insuring against a threat and pointed to Sanford’s single biggest client and investor National Australia Bank as one of the key areas of value for HP JDV.

NAB’s online broking service is run by Sanford in a similar outsourcing arrangement to HP-JDV’s business, with major shareholder Westpac and a host of other big institutions like AMP, Suncorp, BT and Macquarie.

Sanford also has a strong retail online customer base of 45,000 investors, an area Hartley Poynton has shunned under its own brand, but which could easily fit into its business model.

Sanford chief and recent WA Business News 40under40 winner Steven Goh said he was amused by the sudden play that came at a time of consolidation in the industry.

Mr Goh said Sanford’s ownership of the technology it used was a big strength as the market rapidly moved to capture wholesale business particularly from accounting and financial planning groups that had access to around 60 per cent of share investors.

He said these investors represented those whose portfolio value was too small to be of interest to full service brokers but did not trade enough to attract the online brokers.

“There is a lot of rationalisation in the financial planning industry,” Mr Goh said.

“That is about simplifying relationships. We play in that space.

“In 12 months from now, Sanford will look more like a super-enabled version of Sealcorp, rather than an online broker.”

He said the HP JDV move came at a time of balance sheet weakness for Sanford.

But at least one senior HP JDV executive discounted the financial planning side as a key motivation.

“The key bits (in Sanford) are its own retail client base and relationship with NAB,” the source said.

There are other differences in opinion. HP JDV is happy to use other players’ technology in its systems, aiming to hold the middle ground in the technology field that will interact with other back-office systems.

In this way, the company claims it has more flexibility and can fit in with any of the big players’ needs in a bid to get the scale needed to make transaction-processing profitable.