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Technology: Change from necessity, not invention

If you can remember 2014, you weren’t really there. Actually, that’s not true. If you remember 2014, and you work in financial services, you probably wish you hadn’t been there, and had instead been in a pleasantly hazy lysergic acid diethylamide-fuelled fug in 1967. Bad luck on that.

So my task in this column is to round up a few of the things from an industry technology standpoint that were interesting enough to make the grade, and do a bit of that future-gazing thing which makes people lots of money (albeit they normally gaze further than 31 days into the future).

Looking back at last year’s predictions, I whiffled on about auto-enrolment a bit, about the importance of doing the basics well and about helping advisers manage centralised investment propositions more effectively. All did prove to be important, but they weren’t the only games in town.

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Movers and shakers

Instead of a tick-tock of the year, let’s pull out a few of the big themes which technology had a hand in. First of all, the free movement of assets from one place to another remains a challenge, but one which technology and those who drink the energy drinks and put in the coding sessions are doing their best to manage. We had a few examples of why this is important in 2014.

On the direct platform side, providers broke cover in their dozens to declare their pricing. The fee sheets were long and lustrous, with plenty of chance for geeks like us to have fun with tables and comparisons.

One not so edifying aspect, however, was exit charges, which the Daily Telegraph took up as a cause, before selecting a platform of its own which had, er, exit charges. What mattered here particularly was those who wished to exit Hargreaves Lansdown once they had worked out it wasn’t free, but found that escape came at a price. Hargreaves blamed the lack of tech for re-registration across the industry; irrespective of the validity of that excuse it brought the issue front and centre.

Also important was the issue of discounted share classes, or SUPERCLEAN™. This little debacle saw a few providers try to flex their oh-so-impressive guns by negotiating a share class with a few points off compared to less buffed platforms.

We’ll leave aside the fact that most of the discounts were paltry, or on funds you wouldn’t wish on your worst enemy, and concentrate on the fact that if you hold different share classes on different platforms then you can’t transfer without selling down and repurchasing.

Standard Life deserves some credit here for agreeing to hold both the discounted and normal share class on its wrap, and taking care of the conversion itself whether on or off.

In both cases, it’s the tech framework and messaging standards connecting platforms that matter. This really couldn’t be any less glamorous, but it’s hugely important for the industry – and clients. Progress was made in 2014, with protocols agreed and the beginnings of automated re-registration starting to happen.