The head of AJ Bell has said it is 'scary' that more than half of the assets in the UK platform market are about to migrate over to different IT systems.
Speaking during the Investival conference, hosted by AJ Bell today (17 November), Andy Bell pointed out that £200bn in assets are about to switch to different IT systems as various platforms overhaul their systems.
This is more than half of the £360bn assets under administration currently being held on UK platforms.
"That to me is quite scary," Mr Bell said, pointing to the costs of re-platforming.
He estimated the total cost of re-platforming for all the platforms combined is £823m, with Old Mutual expected to foot the biggest bill as its £34bn assets move over to technology provider International Financial Data Services, costing £450m.
FundsNetwork is expected to incur costs amounting to £250m as it moves its £60bn assets to Bravura, while the biggest platform in the UK Cofunds could sees costs of £80m when it moves its £77bn assets to GBST.
"For those who are thinking of moving platforms I would genuinely advise to do that before these IT transfers start taking place because it will be very difficult for some of these platforms to start moving money around."
The AJ Bell chief executive said the big trends in the industry over the next few years will be re-platforming and consolidation.
But as the vast part of the industry starts to switch IT systems, Mr Bell said he would be "amazed" if platforms are not faced with teething problems.
While he admitted the growth in the platform market makes it a "good place to be", he also pointed to the industry's flexible nature, adding: "If you don't like change you are in the wrong industry."
