Royal London group chief executive Phil Loney says Ascentric is “not for sale” as he emphasises the wrap platform is a core part of the business.
In Royal London’s 2016 annual results today, the mutual revealed it took a £44m hit on “uncovered business” on its platform due to “significant” costs relating to the development of Ascentric’s new back office software.
Speaking to Money Marketing, Loney says there will be further costs in 2017 as the replatforming project continues.
He says: “The stage we are at at the moment is the programme to replatform Ascentric is progressing in line with our internal plan and we are in an extensive period of testing which consists of system testing and user acceptance testing and later in the year we will announce to advisers, and the world in general, the schedule for rolling out the new technology.”
In February, Ascentric announced it will move to a single standard account charge from 1 May, seeing it scrap trading fees and additional charges.
Asked if Royal London is open to selling Ascentric given other consolidation activity in the market, Loney says: “No Ascentric is not for sale. It is a core business of the group and it is a long-term hold for us.”
He says the replatforming project is viewed as an investment by the board.
Loney says: “We started this process a couple of years ago and Ascentric is a key core business for us in the long term. We are getting good growth and we have got exciting plans for the business in the future.”
Money Marketing reported last November the FCA was meeting with a number of platforms over fears replatforming projects could cause customer detriment but Loney says he has not noticed a “laser focus” in that area.
He says: “I am sure [the FCA is] interested but there are a whole range of issues like CASS and the prudential side of running a platform and they have got to balance interest across all of those issues just as they have in the non-platform market.”
Loney says Royal London is still considering the launch of a guaranteed drawdown product, but a release is not “imminent”.
He says: “We have got a number of innovations we are planning in the drawdown space and that is one of the things that is on the cards.”