Sirius Funds Management managing director Kieran Kelly has branded BT Wrap Portfolio Administration as lacking in transparency and accused it of failing to divulge information that was “vital to effective management of client portfolios”.
Kelly has taken the extraordinary step of going to the media, issuing a press release outlining his concerns and problems with BT Wrap, stating he has struggled to receive adequate answers to his requests for information for more than six months.
Kelly claims that he has asked BT Wrap to substantiate individual client balances for audit purposes and to also confirm that client stocks aren’t loaned out to third parties.
He stated that BT Wrap responded that it was too difficult to fulfil the first request and the BT Wrap documentation does not prohibit the lending of stocks to third parties.
“I realised that not only did I not have any independent substantiation that the clients actually owned the stocks showing in their BT Portfolio reports, but also that these stocks had not been loaned to a third party,” Kelly said.
Kelly also stated that he was surprised to discover in his dealings with BT Wrap that it used a third party, Core Equity Services – owned by the Commonwealth Bank – to undertake share transactions for Sirius clients.
When he asked for a copy of BT Wrap’s agreement with Core to see if it prevented stock lending, Kelly stated that BT Wrap would not provide it and had yet to respond to a request for information on what would happen if there was a settlement failure by Core.
Kelly’s request for assurances that Core is part of the ASX Fidelity Fund has also met with no response, he stated.
“At this point, I have no idea what restrictions are in place in relation to Core’s dealing with our client securities held on BT Wrap. I have no idea, for example, what happens if there is a settlement failure by CORE Equity Services,” Kelly said.
“I have been trying to get basic information out of BT Portfolio Services for six months. My letters and emails have gone largely ignored and I am still waiting for a reply. I don’t know what they are trying to hide.”
