Your IndustryDec 23 2014

Technology: Change from necessity, not invention

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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.

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.

Our friends at Altus, the technical consultancy which offers one of the ‘gateways’ into the automated re-reg world, tell us that a successful platform-to-platform re-reg (albeit simple) was done in 15 minutes. Instead of weeks. That’s what tech can do when everyone stops mucking around and mucks in instead.

If altruism was one theme of 2014, introspection was another. We saw a big wave of platforms making fundamental changes to their underlying technology this year. In no particular order, and picking and choosing:

•Skandia – sorry – Old Mutual Wealth, signed a long deal with IFDS and Bluedoor to build the next generation of SIS (OMWIS?)

•Alliance Trust Savings plumped for GBST to upgrade its core systems

•Ascentric moved to Bravura Systems to replace its core BlueButton innards

•Nucleus upgraded to the latest iteration of Bravura’s platform tech – known as Sonata.

Of these, only Nucleus is live at the time of writing. Changing the core architecture of a platform is maybe the hardest thing you can do, and the most painful short of stepping on Lego with bare feet. Some battle-scarred faces at Nucleus bear testimony to that. It’s almost never the case that either the tech vendor or the platform operator are nasty people, or slapdash – but this stuff is really hard and even a smooth implementation can be rocky.

Delays on the line

We are hearing of some other projects being delayed at the moment. It’s incumbent on platforms doing this to make sure they are really open and honest with advisers; there’s no point being anything else.

So much for under-the-hood developments. This was really a year of finishing off RDR and PS13/1 changes for many providers in the platform space, so we saw relatively little in terms of new propositions. Respect, then, to Aegon, which launched a D2C service using its platform-enabled pension capabilities via GBST called Retiready. This was an interesting move and the execution was broadly good if a bit fussy (you’re not going to plan for retirement dressed like that, are you?).

Aegon also launched One Retirement off the same platform – a pensions-only platform (or ‘pension’), making it the king of thrift in terms of reusing tech. Expect to see more platforms and providers – from Prudential to lots of the Sipp providers – launching platform-style pensions which can enable the new retirement freedoms and also talk nicely to other technologies advisers may be using.

Round up...

And a couple of quickies to round us off. Client reporting was a big theme this year, and will be next year. From Sammedia’s MoneyInfo – now approaching ubiquity – through to Sprint Enterprise’s Fastrak (which enjoyed a 15 per cent investment from Transact), the idea that data aggregation from lots of places can lead to better, more engaging client reporting is a persuasive one. More please.

Also more please for deeper integrations. We’ve seen some good work between Iress and AXA, Zurich and DT and green shoots with Intelligent Office links. Others have been working away too. This might be the fairy on top of the Christmas tree for advisers – could we circle back round to altruism and work together to rid the world of the plague of rekeying? We can but hope.

So there it is. Next year – many, many new pensions products; lots of post-launch catch-up for all the tricky bits of regulation; re-platforming again; greater work on integration and reporting; and, hopefully, a bit of work on user experience. We’re collectively sick of online wizards – they are horrible and don’t even do any good magic tricks. And auto-enrolment systems will still suck.

Whatever comes, it’ll be fun, we’ll write about it here, and inch by inch the industry will slide into something resembling the 21st century.

Mark Polson is principal of platform specialist consultancy, the lang cat.