Is it time for advisers to depart platforms?

  • Learn about the replatforming problems firms have been facing
  • Gain an understanding of the forthcoming regulatory changes
  • Learn about how the platform market has been performing
Is it time for advisers to depart platforms?

Replatforming is not a word that will have endeared itself to intermediaries over the past few years. 

Whether driven by consolidation or a need to upgrade technology, few that have undertaken the migration process have experienced a smooth ride. Indeed, for some the consequences have been severe. With advisers and their clients left pulling their hair out, the result has been hundreds of complaints landing on the desk of the ombudsman.

When Money Management previewed the upheaval ahead in January 2017, the Lang Cat’s Mike Barrett remarked there was “not one recorded instance of replatforming or tech migration going smoothly”. Almost three years on, it is still difficult to argue with that assertion.

In the same vein as those before them, the latest spate of firms undergoing a technology migration are also experiencing snags. But it is arguably the belated completion of one of the biggest replatformings that really serves to highlight the extent of the problems faced.

The final part of Aegon’s £8bn integration of Cofunds onto its own platform completed in August, some three years after its purchase from L&G. Aegon is now the biggest player in the advised platform market by some distance, as Chart 1 shows. 

A similar theme is currently playing out for two other big names - Royal London and Quilter. The former, while upgrading its Ascentric platform, struggled to make income payments in the middle of last year, and this spilled into the latter parts of 2018 with continued disruption and weeks of closures. Further to this, more than a year after the problems surfaced, in July 2019 the company announced the platform would close over a weekend to make “noticeable improvements” to users’ experience.  

Meanwhile in August, half-year financial results published by Quilter revealed the cost of its technology upgrade had increased by £25m, taking total costs upwards of £515m for the project. The company stated that it “is making good progress with final software testing in progress and validation of migration data integrity nearing completion”.

The initial rollout has now been delayed until early next year, with the programme set to complete next summer.

However, Quilter chief executive Paul Feeney remained optimistic about the progress being made. In a statement accompanying his company’s accounts, he said: “The lessons learned from our soft-launch phase have been valuable and we are delighted with the improved functionality that the new platform delivers. In addition, our plans to ensure our customers and advisers are prepared for the migration are progressing well. However, the final delivery of the platform is expected to take approximately three months longer than planned. This is driven by the complexity of the programme and our commitment to a high-quality outcome.”

Despite Mr Feeney’s words of confidence, some intermediaries have become so disillusioned by the various processes that they are investigating ways to circumvent the platform market entirely.