The growing trend in platforms transferring their employees to tech providers will accelerate the growth of adviser white-labelling and ‘adviser as platform’ solutions, according to experts.
Recent deals mean tech provider FNZ will soon have absorbed nearly 900 staff previously employed by its platform clients, as more platform operators look to outsource both their administration and core technology.
So far, Abrdn and James Hay have ‘tuped’ - which means ‘transferred undertakings of’ - employees from themselves to FNZ.
Abrdn has transferred 427 of its colleagues to FNZ so far, while FTAdviser understands James Hay has tuped some 450 employees.
In the outsourcing market, tuping is a legal obligation which means staff have to follow the work if it moves. “They can then be made redundant on their previous employer's terms, but there isn’t a ‘choice’ as such when it comes to tupe,” Alpha FMC’s head of retail distribution and advice, Bradley Northrop, explained.
Industry experts have said they are not surprised by the direction of travel, with FNZ being “one of the first movers” in the platform market to deliver both the software and administration services to platforms.
They have also said platforms tuping employees to the likes of FNZ could bolster their white-label offerings. Embark, which uses FNZ's technology to run its platform, has branded white-labelling an "important" part of growing its retail arm.
"For the industry, [tuping] can strengthen the ‘platform as a service’ model that may attract more brands to white label a solution, or for advice firms to move to the ‘adviser as platform’ solutions," said investment platform director at Altus, Chris McCullam.
"Firms like FNZ will build the operational scale to service more and more customers – especially as they acquire other business to fill gaps in their capability or meet specific client/product demand."
FTAdviser approached Embark, as well as FNZ's other two clients Quilter and Aviva. The latter two said they have not tuped any employees.
Embark declined to comment, but FTAdviser understands no employees have been tuped.
Abrdn said it has been tuping employees to FNZ over the past couple of years. The platform has also handed over all its back-office processing to FNZ.
“Most advisers still deal with the same teams and will not have seen any difference in how they deal with us." the platform said.
FTAdviser understands as part of James Hay’s outsourcing arrangement it signed with FNZ in June 2021, the platform will tupe around 450 of its employees.
Currently, most platforms oversee their administration in-house. Despite this, one platform told FTAdviser they think “more might consider the [tuping] model”.
There has been a wave of platform providers moving into the white-labelled, or customised, adviser space in recent years including Fundment, Seccl, Platform One, Multrees and Third Financial, which all offer variations on the customised ‘white-label’ offering.
These providers, all of which operate their own in-house technology to varying degrees, have been bringing innovation to the platform space.