Firing line: Ian Taylor ahead of Transact's floatation

Firing line: Ian Taylor ahead of Transact's floatation

Ian Taylor does not believe Transact is about to be disrupted, despite market talks that the platform sector could soon be under siege from entrants. He also remains unconvinced the global tech behemoths can make a successful bid in the market.

The chief executive of Transact's parent IntegraFin said: “At the moment you have a market that is working on mid-20s to 30s basis points and people are saying someone like a Google or Amazon could come in and do it on five basis points, in theory, on a spreadsheet.

“But in terms of the real world, where you are trying to make money and help the customer move their pension plan from one place to another, I cannot imagine how it would work.”

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Banks have also been mooted as being a potential threat to the platform market, but Mr Taylor is sceptical.

“Banks are well positioned to start muscling their way into the vertically integrated market again because of their scale and coverage,” he said. 

“The irony is they have done it [in the past], then they stopped doing it. [They] forget all about [what made them pull out], then they start doing it all over again. I am not worried about these sorts of models because they will not be able to do what we do.”

Continuous worries

However, the usually unflappable platform boss does worry that anything that removes complexity – as platforms make their money by making complexity easier to manage – is a potential threat.

Mr Taylor said: “If the government was to get rid of all tax wrappers or have just one, then that would take away part of our raison d’être. Or, if the UK public stopped buying funds and shares and just held cash, then that would also add a simplicity we’d struggle to help with. To a degree both those things are already true for people who have very little by way of savings and that little is held only in cash accounts. I’m not convinced either is likely to become universal.”

But Mr Taylor is excited about the future as Transact gears up for an initial public offering (IPO) in March. The company has not disclosed how much will be raised, but the offer size is expected to be 25 per cent of IntegraFin’s share.

The platform boss said the main reason behind the move is to fulfil a promise he made 18 years ago to early investors in the business. But the timing does coincide with a period in which platforms are growing and advisers are more clued up on what they want out of the model.

He said that it also feels like the right time to do the IPO because of Transact’s recent performance in a record year of growth. The firm’s post-tax profits leapt by 43 per cent to £30m for the year to 30 September 2017. Gross inflows rose by 49 per cent to £5.3bn and net inflows increased by 66 per cent in the same 12-month period.