Chief exec Paul Feeney says project has been difficult but costs proved “unacceptable”
Old Mutual Wealth chief executive Paul Feeney has admitted the company’s replatforming project has been “a difficult journey” as he sets out why IFDS has been dropped as its technology provider.
Old Mutual Wealth announced this morning it had terminated its contract with IFDS in favour of a deal with FNZ.
Last week the company said it would update the market on its replatforming exercise no later than the company’s AGM on 25 May.
Speaking to Money Marketing today, Feeney said the timescales and costs of the project under IFDS, which had hit £330m as at the end of April, had become “unacceptable.”
He says: “We had concerns that remaining with existing suppliers would have extended timescales and led to additional costs. We told the market earlier this year we were in sensitive, commercial negotiations to try and address timescale and cost risks. Those talks have not borne fruit.
“This is the right decision for our customers, their advisers and our shareholders. It substantially derisks our UK platform transformation programme.
“It was going to take longer and cost more than the guidance we had given the market, and that was unacceptable after such a long time in this programme. We have made a definitive decision today, and one that will provide greater functionality within an earlier time and at a better cost than would have been the case had we stayed on the route we were on.”
Asked if Old Mutual Wealth had to pay to break the contract with IFDS, Feeney said the contract had been terminated in accordance with Old Mutual Wealth’s rights.
FNZ already has replatforming agreements in place with Standard Life Elevate, Aviva, Santander and Barclays. Feeney says FNZ has committed sufficient resources to the Old Mutual Wealth project.
He says as part of the transition to FNZ, advisers can expect greater functionality such as linking to advisers’ back office systems, exchange-traded funds, investment trusts and cash accounts.
He says: “Advisers and their customers have been at the forefront of our minds as to why we have made this decision in terms of timescales, and the functionality and service proposition we want to deliver to advisers, and the service support we want to continue to provide.
“We have made the decision to go with FNZ, and believe it is the best and most appropriate provider for us. We believe this will get us there quicker, and with a richer proposition.”
Feeney adds: “It has been a difficult journey for all of us so far. At the same time, a lot of the previous learnings have enabled us to come out of the traps very quickly with FNZ.
“As the chief executive of this business, I am responsible for the overall strategy of the firm and delivering on that strategy, and that includes the transformation of our UK platform. We are completely committed to delivering that strategy, and we will deliver.
“We have made a tough decision, but we’ve made the right one.”