“This is your captain speaking. Your platform is about to undergo a major technology upgrade. There might be some unexpected turbulence. Please keep your seatbelt fastened, sit back and enjoy the ride.”

    The platform industry is changing. So far in 2016 we have seen the largest platform (in AUA terms) being sold by their parent to a competitor, with a decent medium sized platform taking a similar path. This is alongside the backdrop of a number of technology migrations and upgrades which, for a platform provider, is far and away the hardest thing you can do. We estimate that at some point over the next 18 months (albeit these projects never deliver on time) there will be at least £150bn of advised assets changing their technology base. With most major platforms involved, chances are almost every adviser will have some clients for whom these changes will impact. So, if you have, what should you do?

    When a merger is announced we often see advisers going through the five stages of grief, especially if the platform is being acquired by a ‘big bad’ life company. The first 24 hours will be peak comment board nutter time, with denial and anger at a move that is likely to have been rumoured to be on the cards for several months. With the requirements for platform due diligence and review in mind, denial and doing nothing is not an option for advisers. They need to assess what is going on, how it will impact them (and more importantly their clients) and move on towards acceptance.

    Nucleus users have learnt the hard way just how painful a large technology upgrade can be and, whilst it can be difficult to plan for every potential issue, there are a number of things you can be pretty sure will happen. Firstly, the project will be late and implementation will take several months. If you are lucky there will only be teething troubles, but the reality is the post-implementation issues are likely to be a lot worse. An adviser firm is going to have to spend time getting used to the new system, dealing with the issues and it’s likely some of your clients will be impacted. Finally, if you care about this (and you probably should from a platform DD perspective), the project will be over budget. Fun fun fun….

    If, as an adviser firm, you want to go into this with no real plan or measurements in place to monitor the outcomes then we wish you good luck. However, in our experience of working with advisers, the increasing professionalism being displayed by most firms means they are starting to take a more proactive approach. If a platform is going through these changes then in most cases there is no immediate need to press the panic button and start moving assets, especially as this will incur costs for the firm and/or the client. But firms should think about what needs to happen for the assets to remain with the existing provider. Or conversely, “how bad does it need to get before we trigger a move?”.

    So, we would encourage adviser firms who are impacted by mergers/replatformings to take a number of steps. Firstly, think about the service and support you and your clients need from the platform and the support you will need to move to the new system. Try to identify measures for service that, if not met, would result in the existing assets being placed under review. Then, document these finding and share them with the provider in question. This alone should be a pretty good indicator of their commitment to providing you and your clients with the service required. It’s common to speak of platform usage, especially for a primary platform, as a strategic partnership. If a merger/replatforming is the hardest thing a provider can do then, as a partnership, advisers need to take steps to help manage the transition. Yes, providers need to do more but, equally, adviser firms need to put the work in and give administrators in particular the skills to do the job. It’s no use hitting and hoping and then getting cross.

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