Replatforming is making life difficult for everyone involved

In recent weeks, the most serious client complaints have started to reach the desk of the Ombudsman.

Cofunds has been one of the worst affected by replatforming issues since its merger with Aegon was announced in May 2018, and in the first two months of 2019 the Financial Ombudsman Service upheld four complaints against the firm.

Aviva has also had its fair share of issues since it moved its technology provider to FNZ in January 2018 that resulted in the platform being unavailable for six days, with additional functionality problems and payment issues for those in drawdown.

“I think we’ve all learned that large scale re-platforming issues are incredibly hard,” exclaims Steven Nelson, consultant director at The Lang Cat.

I think we’ve all learned that large scale re-platforming issues are incredibly hard Steve Nelson, the Lang Cat

“Ultimately there’s not a great deal advisers can do about some of the more critical failures in functionality that we’ve seen, however there are some low-level issues that the whole sector can work better to alleviate.

“We’ve seen issues such as misunderstandings around new log-in protocols not being fully understood that have then resulted in service desks being clogged. That sounds like something that could be alleviated via more effective communication lines and would release one of the many pressure valves.”

Ben Hammond, principal consultant at Altus, agrees that one of the most important conclusions that can be drawn from the saga is that advisers must keep in regular contact with their platform.

He says: “Platform providers need to be continually innovating and a major change in technology may be part of this process.

“In addition, many platforms aren’t profitable, so further consolidation is inevitable – this could lead to an enforced replatforming. Heed the warnings of what’s to come from your platform, speak to your BDM or platform support team directly if you need to.

“When speaking with customers, seek to understand any requirements around the planned time of the migration and how these may be affected or delayed by the planned changes. Finally, make sure you understand and adhere to any deadlines and black-out periods the platform may put in place when switching to a new system.”

Analysis carried out by The Lang Cat in 2018 suggested that the majority of adviser platform assets would be affected by “serious disruption” of the provider business, including things like listing on the stock exchange, merger and acquisition activity and changes to the technology supplier.

According to Verona Kenny, head of intermediary at 7IM, advisers can reduce the danger of replatforming issues by spreading the risk among a number of platforms.

She says: “This may reduce the efficiency of the business, but will ensure that less clients are affected should issues arise with a particular platform. We have seen instances of this recently where advisers with significant assets on only one platform with replatforming issues have begun to source alternative and additional providers.

“From a platform perspective, it is increasingly important to ensure that the platform technology is kept up to date and where possible, upgrades are implemented in bite size amounts, so as to cause the least disruption to users and clients.”

It is increasingly important to ensure that the platform technology is kept up to date Verona Kenny, 7IM

For Barry Neilson, chief customer officer at Nucleus, it makes sense that advisory firms have a clear back-up plan, should their primary platform face persistent technological issues.

“Advisers who have been caught up in replatforming woes, or equally those have looked on from the sidelines, may want to consider having a workable and detailed back-up plan in place in the event there are further issues in future,” he explains.

“Where there are key risks, be these changes to pricing, operational headaches or changes to culture, it’s worth having a clear, detailed policy for what platform you will switch clients to if and when these key risks occur.

“Advisers need to get comfortable with their both their due diligence and risk assessments of their current platforms, as well as their back-up plans.”

Replatforming is certainly not a problem that will be confined to 2018/19. As this market continues to grow in assets under administration, businesses will streamline – either through merging or acquiring others, or investing and building better technology.

Any or all of these instances will cause an element of disruption to advisers and their clients.

Mr Hammond concludes: “No matter where the blame lies, it is the adviser who is on the hook and so it is they who will need to rely on the findings from their due diligence if challenged.

“They should be able to show that they took steps to ensure the platform(s) they selected were the most appropriate for their customers, with stability and development roadmap as two of the most important items to investigate.”

Jenny Turton is a freelance journalist