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Can ATS’s new boss keep advisers happy?

Hourglass-Deadline-Time-Clock-700.jpgAlliance Trust Savings’ new boss must “instil common sense” across the business and start to engage with advisers if they are to salvage the platform’s reputation, IFAs have said.

Industry insiders have welcomed news of ATS chief executive Peter Mill’s departure, but say the platform needs to move quickly to fix its service issues.

Frustrated advisers are hoping that a new boss will help turn the business around quickly after months of delays and a drop in customer service standards. Advisers say ATS needs to start engaging with and listening to its clients if it wants to succeed.

Candid Financial director Justin Modray says: “We use platforms day in day out and, had ATS simply listened to some of our suggestions and feedback, it could have avoided a number of embarrassing cock-ups.”

This week Money Marketing broke the news that ATS chief executive Patrick Mill is to leave the platform amid complaints of service issues at the firm. His departure comes just months after he was forced into an apology about the firm’s performance, and follows that of chief operating officer Allison Fower, who stepped down in August after just eight months at the firm.

ATS was not created as a profit-making enterprise so has used a low, flat-fee charging model offering rebates from fund managers direct to customers.

It proved a particularly attractive proposition post-RDR and ATS was initially hailed for setting a precedent with its fee model.

The firm saw assets under administration grow from £4bn in 2013 to £15bn this year. It now serves more than 1,000 adviser firms and 110,000 investors, making it one of the few profitable platforms last year, reporting a £1.2m profit, compared with a £5.2m loss the year before.

The rapid expansion has brought problems, however, including delays in opening new accounts and missing applications. The platform has seen its satisfaction rating drop as advisers reported 30-minute wait times on customer service calls, valuations being shown in dollars and missed income payments. Alliance Trust has admitted its service standards “slipped” in 2017 and said improving this was its number one priority.

With such an array of issues and mounting complaints, many advisers say they have not been surprised by Mill’s departure.

Modray says: “It’s been clear for some time that change is required. It’s no secret that ATS has failed miserably in trying to upgrade its platform IT; service levels have fallen through the floor over the past couple of years, prompting a surge in complaints. A change of leadership will hopefully prove very positive.”

It is understood that ATS representatives called key adviser clients to personally inform them of Mill’s departure.

Richmond Wealth senior partner Chris Bryans says: “I think the writing was on the wall for Mill. ATS hasn’t been communicating with clients, it’s been hard trying to get issues resolved and clients have been unable to get their money or a response. I think someone’s head had to roll.”

But others think Mill, who took over the company in 2012, is being unfairly scapegoated for the firm’s problems.

FinalytiQ director Abraham Okusanya, says: “He tried to do the best he could but these problems pre-dated him. This isn’t a problem that a single person can fix.

“ATS’s problems started with the migration process to a new platform. That was always going to be a massive job – the industry has a track record of re-platforming being a painful process – and they underestimated how long and difficult it would be. Acquiring another platform just made the whole thing a big mess. Mill did what he could but it wasn’t enough to turn the train around.”

Will a new chief executive affect rapid change? Bryans says progress is already being made.

He says: “The fact someone picked up the phone to tell us what had happened, that is the first change and it is very positive. It gives me confidence that something has already changed at the top if they are actively getting in touch with clients.”

Modray says: “I implore the new chief executive to instil common sense across the business and engage with advisers. Both of these things have been woeful in supply by the company.”

He believes, if managed correctly, ATS could get on top of its service issues within “months rather than years”.

He says the priority should be improving service and focusing on tweaks to its existing ActiveBank system, which he says is “fundamentally pretty decent”.

But Okusanya is less confident that ATS can remedy its issues in the near future.

He says: “This isn’t a problem you can wave a magic wand and fix. If the solution was easy, then they would have done it already.”

He expects that many advisers have already stopped putting new business on to the platform due to the fall in service standards, as does Bryans.

Bryans says: “It is impossible to speak to anyone or get information on a query, we spend hours on hold and eventually give up. I know some advisers who just won’t use ATS anymore because the service has been so poor.”

Modray says ATS’s fixed fee model means it still has a “very bright future”.

He says: “Using ATS for our typical client saves them a small fortune compared to percentage fee platforms, so I’ve no doubt the demand will be there if it can crack its service issues.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. “ATS was not created as a profit-making enterprise so has used a low, flat-fee charging model offering rebates from fund managers direct to customers.” If there are no profits how can there be re-investment into the business. Not a very good business model. Unfortunately can only see ATS increasing fees to more appropriate level in order to provide for future development of the system.

  2. Modray says ATS’s fixed fee model means it still has a “very bright future”.

    Or you could instead say, ATS has no future if an existing provider with a really good service decides to offer a fixed fee option.

    • Phil, I’d love other platforms to go fixed fee – zero allegiance to ATS except cost. However, doubt very much that will happen as they won’t want to take the revenue hit – advisers on the whole don’t seem cost conscious, giving platforms little incentive to compete on price.

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