Old Mutual Wealth has ditched technology provider IFDS after it ran into problems with its platform upgrade.
The group announced today (2 May) that it would be terminating its contract with IFDS.
Old Mutual has instead signed a deal with FNZ, which powers a number of major platforms, including Standard Life and Elevate.
The upgrade with IFDS was expected to cost Old Mutual around £450m, whereas the move to FNZ is estimated to cost between £120m and £160m.
Paul Feeney, chief executive of Old Mutual Wealth, said: “Given the cost, effort and time already invested in the programme, we have not taken these decisions lightly.
“This has been a difficult journey for all stakeholders. We have made tough decisions today but we believe they are the right decisions for our customers, their advisers, our business and our shareholders.”
The move is expected to remove some of the risk as Old Mutual embarks on a radical transformation of its platform.
At the end of April, the transformation costs amounted to £330m, of which £110m related to the heritage business.
According to its 2016 results, published in March, Old Mutual revealed the total costs in developing its platform amounted to £102m last year, up from the £97m posted at the end of 2015.
The company expects the new proposition to be operational for new business by late 2018 with migration to follow swiftly thereafter.
Bruce Hemphill, chief executive of the Old Mutual Group, said the shows “decisive action”, adding: “We do not expect these decisions to affect the managed separation of Old Mutual plc."