Pity the poor platform providers

And to top it all, when you get to work on a really exciting project, like re-platforming, you get pelters from users who refuse to understand just how complex your reinvention of this particular wheel is.

The temptation for providers is to do what Apple did with Antennagate on the iPhone 4, which is to say “You’re holding it wrong”. But you know that would lead to apoplexy, and involuntary and immediate opportunities to pursue your career goals elsewhere.

No, it is not easy. So I thought we should try to look at re-platforming from a provider’s point of view.

Now is certainly the time to focus on this. The table below shows you the (declared) replatformings on the go. There are a good few others, but we are not allowed to say who.

Source: the lang cat

Across those firms, £150bn-£200bn of client assets are moving from one place to another. And with these exercises increasing in cost and complexity, as evidenced by Old Mutual Wealth’s massive £450m project budget for its replatforming, they will be with us for some time yet.

So why should you care? If you listen to providers, re-platforming is all positive. It simply takes away the hassles advisers experienced in the past and makes things better. After all, what advisers really care about is outcomes for their clients, not the workings under the surface.

However, re-platforming is brutal – simply the hardest thing that a platform business can do. So, with that in mind, I thought I might set down some of the key challenges that providers face while going through these exercises.

1.Data migration

If anyone has tried moving back office systems, it is similar in concept. The issue is that every platform has a different ‘data architecture’ – the way it treats each piece of information within the system. When moving from one to another the system is dumb – it does not know what it does not know. So if, for example, the label for a data field which holds details of historic income distributions is called ‘dividends’ on System A, and ‘income’ on System B, then System B has no clue what System A is on about unless it is specifically told to recognise that field. That is something of an oversimplification, but if you can imagine that times 1,000, you get to the sort of logistical challenge involved. If any of you have seen data disappear after a re-platforming, this is almost certainly why.

2.Workflow and staff training

Every system is different and has its quirks. When you work in the back or middle office of a provider, you spend hours every day on the same system, and become used to how to move around it and make it do what you want. Moving from one to the other is a massive job; you have to forget everything you knew and learn all the new quirks and workarounds. Training can help, but I am yet to see a re-platforming where there is sufficient training for administrative staff.

The same is true of really gutsy functions like account opening, client money, trading, aggregation, disaggregation, income management and so on. These processes are obviously crucial to everyone concerned, and none are simple. Each can involve multiple interactions with other systems, and the whole thing is rather akin to chaos theory – a butterfly flaps its wings in the jungle, and suddenly your rebalance falls over.

Testing is crucial here – but again, testing can only ever simulate a live environment, and it is often compressed in a desire to get to market, just like training.

3.Communication

Everything technological can be solved with time, money and effort. But getting the balance of communication right is much harder. Relationships can be destroyed all too easily – we have seen clear evidence of advisers moving platform for both new business and existing clients where re-platforming has been clunky.

The issue here is really a tension between delivering quickly and making sure everything works. If you believe a new platform will solve all your problems, you cannot be blamed for wanting it as soon as possible.

The truth is that re-platforming exercises can and should take anything from eight to 18 months to complete, maybe longer. If you are an adviser, ignore any message from anyone provider-side that says it will be simple and quick. Pressuring the provider by threatening to take business away if they do not rush is asking for trouble. Keep this in mind: it is better to have a safe re-platforming than a quick replatforming.

4.Adviser issues

This is one you may not like. Providers often feel frustration that advisers fail to meet them half way. Specifically, staff training and taking time to measure the impact of platform process changes on the adviser’s own procedures are areas where firms could often do more. It is common to speak of platform usage – especially for a primary platform – as a strategic partnership. This is one area where both sides have to work together. Yes, providers need to do more, but equally adviser firms need to put the work in and give administrators in particular the skills to do the job. It is no use hitting and hoping, and then getting cross.

So there you have it, just a few of the things that providers worry about when re-platforming. The truth is that nearly everyone involved wants to make it as painless as possible, and to make sure outcomes for you and your clients are good. No one goes into this to do a bad job. But it is staggeringly complex, and the sooner everyone involved stops trying to smooth over the difficulties and engages in adult conversation, the better it will be.

Mark Polson is founder of the lang cat