The replatforming race: how platforms stack up on technology

How the platforms are coping with technology changes.

Replatforming race

Five of the major platforms in the market are undergoing technology upgrade projects, which between them have been delayed a total of five years. The cost of these projects has brought into question platforms’ ability to withstand the financial strain.

New Model Adviser® spoke to 15 of the biggest platforms to gauge the state of play in the race to revamp platform technology. Is the end in sight, or is replatforming a race with no finish line?

While some are hoping replatforming will not go on forever, Moore’s law, that the processing power of computers doubles every two years, tells us technology will never stand still.

Replatforming race

Five of the major platforms in the market are undergoing technology upgrade projects, which between them have been delayed a total of five years. The cost of these projects has brought into question platforms’ ability to withstand the financial strain.

New Model Adviser® spoke to 15 of the biggest platforms to gauge the state of play in the race to revamp platform technology. Is the end in sight, or is replatforming a race with no finish line?

While some are hoping replatforming will not go on forever, Moore’s law, that the processing power of computers doubles every two years, tells us technology will never stand still.

Old Mutual Wealth

Old Mutual’s replatforming exercise has been hit by delays and spiralling costs. Its replatforming was started in 2013 and its intention was to migrate to International Financial Data Services (IFDS) by the end of 2016. It has pushed the deadline back to 2018, blaming big changes to the regulatory environment.

‘There have been momentous changes in the market and regulatory environment during the project, which meant we had to redirect project resources to meet these challenges and revise our specifications,’ said Steve Braudo, chief operating officer at Old Mutual Wealth.

Old Mutual said the majority of the core back-end administration system, called Bluedoor, was built and undergoing testing. Coding is under way on the front-end administration system, Opendoor, which includes the customer and adviser portals. ‘We have started work on the integration of the systems,’ Braudo said.

Figures for the company’s annual results to December 2015 estimated the total replatforming cost would be £450 million. Braudo said the spend to June 2016 was half way there.

Fidelity International

Fidelity’s FundsNetwork is the second biggest platform in the UK in terms of assets under administration in 2015, according to data from consultancy FinalytiQ. FundsNetwork had £60.2 billion in 2015, £15 billion behind Cofunds.

The company started its replatforming project in 2014, moving the technology over to Bravura Solutions’ administration software Sonata, and was scheduled to launch in the second quarter of 2016. Fidelity described the project, which FinalytiQ estimated would cost £250 million, as part of a ‘multi-year investment programme’.

‘Our replatforming project is a significant part of our multi-year investment programme, which is aimed at enhancing the platform to continue to meet the evolving needs of advisers and their clients,’ a Fidelity spokesman said.

Ascentric

Royal London-owned Ascentric has been undertaking the spiritedly named Project Accelerator for nearly four years. The project involves migrating assets from proprietary technology called Bluebutton to Bravura’s Sonata software, and is running around 18 months late going by the first timeframe set out in 2013.

Ascentric said the upgrade was proceeding well but would not comment on what had caused the delay. ‘We can confirm the technology upgrade is proceeding well and we are now in a rigorous testing phase,’ an Ascentric spokesperson said.

‘The upgrade will only be fully implemented once it has been exhaustively tested and we are satisfied it is fit for purpose for our advisers and their customers.’

The company has not released numbers on cost, but industry insiders said accounts on Companies House hinted at a figure of £14 million to the end of 2015.

Aviva

Aviva has been in the process of moving from using Bravura to FNZ technology since April 2016. FNZ already provides the technology for Aviva’s direct-to-consumer proposition. Aviva, like Ascentric, said it had reached the rigorous testing phase following the build phase.

Aviva remained ‘broadly confident’ it would stick to its original timeframe for project delivery, which was the first half of 2017. The company said it had been engaging the consultants to keep the project on track.

‘[We have] engaged with industry experts such as The Lang Cat and Fundscape throughout key stages of the process, ensuring our approach is fully tested and benchmarked against industry best practice,’ it said.

‘As reported, when we announced our plans to move to FNZ, we anticipated investing in the low tens of millions. However, we do not comment publicly on the specific levels of investment.’

Alliance Trust Savings

Flat-fee provider Alliance Trust Savings (ATS) is moving from proprietary technology to using GBST’s Composer software. The new platform was launched to advisers in the second quarter of 2016 and it is rounding off the migration of advised and direct client assets.

FinalytiQ said these accounted for ‘over 80% of ATS’ overall assets, and said the initial launch was over a year later than planned. Speaking to New Model Adviser®, chief executive Patrick Mill (pictured) said the final push to the new platform was imminent.

‘We piloted with 120 firms [before Christmas] and said we would not be taking new business on the new platform because we were doing the upgrade and the testing,’ he said. ‘Once we are ready to launch, advisers will be able to put business on the platform. We do not have a date but it is imminent.’

Standard Life

Standard Life acquired the Elevate platform from AXA in May 2016. Both Elevate and Standard Life’s own platform, Standard Life Wrap, use FNZ technology. As Standard Life prepares to celebrate the 45th technology release since the platform was launched in 2006, it said it planned to maintain Standard Life Wrap and Elevate as separate platforms and continually upgrade the technology underpinning them, rather than undergo a large one-off programme.

David Tiller (pictured), Standard Life head of adviser and wealth manager propositions said: ‘We are aware this process of continuous enhancement is in contrast with those providers in the midst of large one-off upgrades.

‘We believe our approach provides the stability and continuity advisers need to run their businesses effectively, while affording scope for us to continue to innovate and develop our proposition.’

Aegon

Aegon, a GBST user, announced a deal to buy Cofunds, which uses IFDS technology, in August 2016. Aegon will keep the two separate and has planned a series of service upgrades to both platforms. In the long term it will be move to one platform that uses GBST’s Composer. But it is keen the process should not be described as replatforming.

‘We intend to combine the best of both the Aegon and Cofunds platforms through a technology upgrade approach,’ said Mark Till (pictured), Aegon’s chief distribution and marketing officer.

‘This differs from a traditional replatforming exercise, which typically means the build of a platform and migration of customers to it.’

Cofunds’ assets will eventually be migrated to an ‘enhanced platform’ based on a new version of Composer (at an £80 million cost), using software from Aegon and other technology providers.

Transact

Transact said it spent £3 million to £4 million each year on development. Since launching in 2000, Transact has made over 200 monthly upgrades with varying sizes of change.

Transact chief development officer Jonathan Gunby (pictured) said: ‘We split our development projects into large (something like the introduction of a new wrapper, like the lifetime ISA), medium (for example, changes to the detail or order of setting up a model portfolio) and small. Every release contains several medium changes, many small changes and, perhaps, one large change.’

This approach avoids the need for anything near the scale of a replatforming project, said Gunby.

Seven Investment Management

Seven Investment Management, which uses Pershing technology, said it constantly added to platform functionality, which inevitably requires IT development but covers other areas.

Novia Financial

Novia Financial uses GBST technology and said it regularly updated it with Composer releases.

‘This is keeping Composer up to date with new technology and new regulation,’ said chief executive Bill Vasilieff (pictured). Novia said it spent £750,000 to £1 million on technology improvements and upgrades each year.

Parmenion

Parmenion works on proprietary technology and said it takes an ‘agile’ development approach, with technology updates released every two weeks.

James Hay Partnership

When owned by Santander in 2009, James Hay Partnership outsourced its technology to InfoComp, which was later bought by GBST. Santander decided it was better off sticking with proprietary technology and James Hay said its use of it meant it did not have to wait to do big technology releases.

Nucleus Financial

In 2014 Nucleus completed its move to Bravura’s Sonata technology for a cost it said was ‘not significant enough to warrant being listed as an exception item within our annual accounts’.

Nucleus believes it will not replatform in the near future. ‘We will continually invest in improving the platform over the coming years but we do not envisage making the structural change we did in 2014,’ a company spokesperson said.

AJ Bell

AJ Bell described its 2014 replatforming project as ‘huge’. It took four years and came ‘with a number of challenges’. It said it was future-proofing the platform with a series of enhancements.

‘We do not anticipate having to carry out additional work to upgrade technology for some time,’ said a company spokesman.

Zurich

Having launched its platform in 2012, Zurich said it was too new to replatform. ‘As a recent provider, our platform is built on top class, modern technology,’ said Alistair Wilson (pictured), Zurich’s head of retail platform strategy. ‘This means we have not needed to undertake any large scale technology upgrades.’

Due diligence

While some are grappling with spiralling costs, others are just delaying the pain. For due diligence, advisers should be up to speed with platform projects. This should be easier once the delays and hundreds of millions of pounds of the current shake-up have settled.

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