This month's question: Should advisers consider switching platform provider when technological upgrades go wrong?
Yes
Richard Ross, director at Chadwicks
My excuse for joining my grandchildren to watch Mary Poppins was that it gave me the opportunity to reflect on the importance of signals and trust in financial relationships. The Banks children’s inability to get their tuppence caused a run on the bank; their father lost everything for tuppence.
Platform providers piggy-back the adviser/client trust relationship – clients trust the platform because they trust their adviser. Too often the role of signals and cues in supporting this relationship is misunderstood and undervalued.
If an upgrade goes awry, the provider may argue that there have been few material losses and conclude it is not important in the bigger picture – it’s a minor inconvenience. Clients see it differently. They will be concerned their faith in the institution holding their money is misplaced, and with it their trust in their adviser. They may not want their tuppence, but they want to know it is safe.
In other industries, best practice is to run an existing system in parallel alongside an upgrade until it is tried and tested. This is costly, but would the chaos around some recent upgrades have been acceptable in, say, an air traffic control upgrade?
Strategic IT implementation should not rely on luck, it requires competent planning and execution. When it goes wrong, nothing will change if we simply shrug our collective shoulders and accept the line that they tried their best but were unlucky.
We have a duty to our clients to hold platforms to account for their failures.
No
Susan Hill, chartered financial planner at Susan Hill FP
Technology is vital to modern businesses. Providing immediate access to current financial plans that provide accurate data is vital in running a modern financial planning business.
In July 2017, we started an in-specie transfer from one platform to another based on a considerable cost saving to the client. The receiving platform then started to admit it was having technological upgrade issues. Six months later the in-specie transfer had transferred out of the ceding platform but was nowhere to be seen on the receiving platform for weeks, in fact nearly two months.
With the increasing awareness of potential scams, our client could be forgiven for believing this was what was occurring. Notwithstanding that, because the funds weren’t showing on either platform, we didn’t receive any ongoing fee for the time the funds were absent, which was more than eight weeks.
From a personal experience, I would not advocate moving platforms while a platform is undergoing any type of technological upgrade, and I would think carefully about using a platform that is upgrading or using old technology and is likely to be forced to upgrade in the future.
Over five years ago, the RDR brought in a massive change to the way advisers charged for advice and inevitably did business with providers. Platforms facilitated most of that change but have been caught napping. It should have been obvious to them that their technology would be at the heart of their service, so why only now are they doing something about it?
